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A   TREATISE 


FRAUDULENT  CONVEYANCES 


CREDITORS    BILLS. 


BY 


FREDERICK    S.   WAIT, 

OP  THE  NEW  YORK  UAR, 

Author  of  "Insolvent  Corporations,1'1   "Trial  of  Title  to  Land,"  etc. 


THIRD      EDITION. 

Revised  and  Enlarged. 


NEW  YORK 

BAKER,  VOORHIS  &  COMPANY 

1897 


T 

Copyright,  1884, 
By  Frederick  S.  Wait. 


Copyright,  1889, 
By  Frederick  S.  Wait. 


Copyright,  1897, 
By  Frederick  S.  Wait. 


HPAMV, 

ALIIANY,    H.   V. 


£ 


ft 


Gfbso 


To  the  Memory 

of 

DANIEL    G.  ROLLINS. 


687513 


PREFACE  TO  THIRD  EDITION. 


In  this  edition  much  fresh  matter  has  been  embodied 
in  the  original  text,  a  number  of  new  sections  have  been 
written,  and  the  citations  of  authorities  increased  several 
thousand  cases  over  the  number  contained  in  the  former 
edition.  Over  one  hundred  and  eighty  pages  of  entirely 
new  matter  has  been  written  for  this  edition.  Special 
efforts  have  been  put  forth  to  utilize  the  latest  import- 
ant authorities  bearing  upon  the  topics  discussed.  Most 
of  the  old  questions  have  been  fought  over  in  the  courts 
since  our  last  edition.  The  multitude  of  recent  cases 
involving  fraudulent  alienations  and  covinous  schemes 
devised  to  defeat  the  claims  of  creditors,  demonstrates 
how  important  and  far-reaching  the  subject  under  con- 
sideration has  become.  Sometimes  a  creditor's  entire  for- 
tune is  dependent  upon  a  correct  exposition  of  the  statute 
of  Elizabeth.  The  writer  is  confirmed  in  his  early  convic- 
tion that  the  policy  resulting  in  a  relaxation  of  remedies 
against  the  person  which  an  enlightened  civilization  seemed 
to  demand,  has  created  a  numerous  and  very  obnoxious 
class  of  what  may  be  called  professional  fraudulent  debt- 
ors. The  spendthrift  trust  cases  now  so  numerous  reflect  no 
credit  upon  the  body  of  our  law.  The  policy  of  enlarging 
statutory  exemptions ;  of  depriving  creditors  of  the  right 
to  resort  to  powers  as  assets  ;  of  upholding  shifting  liens 


vi  PRE1  Ail:    TO    THIRD    EDITION. 

upon  personal  property  ;  of  shielding  debtors  with  an 
undeserved  mantle  of  presumptions;  and  of  exacting 
explicit  proof  of  notice  sufficient  to  charge  alienees  with 
bad  faith — is  certainly  working  injustice  to  the  creditor 
class. 

The  aim  of  this  treatise  is  to  furnish  suitors  with  a 
practical  guide  in  this  kind  of  litigation.  The  earlier 
statutes  and  decisions  concerning  fraudulent  alienations 
to  defeat  creditors  have  been  noticed ;  the  debtor's  rights 
and  interest  in  property  available  to  creditors  have  been 
considered  ;  and  the  different  forms  of  remedies  or  of  pro- 
cedure which  may  be  invoked  either  at  law  or  in  equity  ; 
the  status  essential  to  entitle  a  creditor  to  maintain  a  bill  ; 
questions  of  parties,  complainant  and  defendant ;  of  plead- 
ing ;  the  form  and  effect  of  the  judgment ;  and  the  rules 
regulating  provisional  relief,  reimbursement  and  subroga- 
tion have  been  treated,  the  discussion  embracing-  both 
chancery  practice  and  the  reformed  procedure. 

The  discussion,  however,  has  not  been  limited  to  the 
details  of  practice  or  procedure.  Chapters  have  been 
devoted  to  the  subjects  of  intention,  consideration,  and 
indicia  of  fraud  ;  to  the  important  questions  relating  to 
change  of  possession,  and  generally  to  evidence  and 
defenses  as  appertaining  to  these  suits.  The  rules  appli- 
cable to  frauds  upon  creditors  springing  out  of  the  rela- 
tionship of  husband  and  wife,  and  relative  to  covinous 
ral  assignments  and  fraudulent  chattel  mortgages, 
have  been  examined,  and  the  doctrine  of  spendthrift  trusts 
discussed.  Special  pains  have  been  taken  in  the  treatment 
of  the  law  of  notice,  actual  and  constructive,  as  applied 
1 1  -  our  subjei  t . 


PREFACE   TO   THIRD    EDITION.  Vll 

One  of  the  chief  aims  of  a  work  of  this  kind  is  to  bring 
side  by  side  the  decisions  in  different  States  upon  kindred 
questions  and  construing  similar  statutes.  Federal  authori- 
ties have  been  frequently  quoted,  cited,  and  relied  upon, 
because  more  universally  accredited,  and  in  pursuance  of  a 
belief  that  such  a  policy  tends  to  render  the  body  of  our 
law  more  symmetrical  and  harmonious.  Still,  the  great 
mass  of  the  decisions  collated  and  discussed  has  been  drawn 
from  the  courts  of  last  resort  in  the  various  States. 

The  writer  acknowledges  the  valuable  assistance  of 
Adolph  L.  Pincoffs,  Esq.,  and  Paul  M.  Goodrich,  Esq., 
both  of  the  New  York  Bar,  in  preparing  this  edition. 


No.  10  Wall  Street, 
New  York,  October^  1807. 


CONTENTS. 


FRAUDULENT   CONVEYANCES   AND 
CREDITORS'    BILLS. 


CHAPTER  I. 

PAGE 

Introductory  Observations.  —  Growth  of  the  Law  con- 
cerning Fraudulent  Conveyances- — Phases  of  the 
Subject,         .........         i 


CHAPTER  II. 

Property  Susceptible  of  Fraudulent  Alienation. —  Assets 

Available  to  Creditors,       ......       53 

CHAPTER  III. 

Creditors'  Remedies,  .......       96 

CHAPTER  IV. 
Status  of  Attacking  Creditors,        .....      139 

CHAPTER  V. 
Existing  Creditors,    ........      180 


CHAPTER  VI. 
Subsequent  Creditors,         .......      193 

CHAPTER  VII. 
Who  may  be  Complainants,         ....-•     213 


X  '"'iXTENTS. 

CHAPTER  VIII. 

rPAGE 

Par  i  ii  -  Defendant,   .         .         .         .         •         .         .         .     249 

CHAPTER  IX. 

[PLAINT,  .  .  ■  •  •  •  .  .  .       270 

CHAPTER  X. 

111    l'i  v.\  or  Answer,    .......     300 

CHAPTER  XL 
me  Judgment  or  Decree,     .         .         .         .         .         -311 

CHAPTER   XII. 
Provisional  Relief. —  Injunction. —  Receiver. — Arrest,     .     331 

CHAPTER  XIII. 
Reimbursement  and  Subrogation,      .....     340 

CHAPTER  XIV. 
Intention,  .  .  .  .  .  .  .  .351 

CHAPTER    XV. 
01  R  \tio\\     .........     373 

CHAPTER   XVI. 
Indicia  or   Badges  of  Fraud,  .         .         •         .         .     398 

CHAPTER    XVII. 
Change  01    Po    ession. —  Delivery,      .  442 


CHAPTER    XVIII. 

Evi  DENCE, 


473 


CONTENTS.  xi 

CHAPTER  XIX.' 


PACE 


Defenses,     ..........     505 

CHAPTER  XX. 

Husband  and  Wife. —  Fraudulent  Marriage  Settlements,     522 

CHAPTER  XXI. 
Fraudulent  General  Assignments,    .....     546 

CHAPTER  XXII. 
Fraudulent  Chattel  Mortgages,       .....     617 

CHAPTER  XXIII. 
Spendthrift  Trusts,  .......     636 

CHAPTER  XXIV. 

Bona  Fide   Purchasers.  —  Actual  and   Constructive    No- 
tice.—  Fraudulent  Grantees,      .....     665 

CHAPTER  XXV. 
Preferences,        .........     703 

CHAPTER  XXVI. 

Conveyances    Valid    between    the    Parties.  —  Relief    to 

Defrauded  Grantors,  .  .  •  •  •  .716 

CHAPTER  XXVII. 
Jurisdictional  Questions. —  Conclusion,     ....     738 


TABLE  OF  CASES 


{References  are  to  fages.~\ 


Aaronson  v.  Deutsch,  565. 
Abbey  v.  Dewey,  15. 

v.  Deyo,  94,  531,  532. 
Abbot    v.  Johnson,  288. 
Abbott  v.  Goodwin,  630. 

v.  Tenney,  40,  67,  106,  107. 

v.  Wood,  47. 
Abegg  v.    Bishop,    221,   233,   597,   602, 

603,  706. 
Aber  v.  Brant,  187. 
Abercrombie  v.  Bradford,  558. 
Abney  v.  Kingsland,  469,  497. 
Abraham  v.  Ordway,  511. 
Acer  v.  Westcott,  673,  675. 
Acker  v.  Leland,  299. 

v.  White,  349. 
Ackerman  v.  Gorton,  79. 
v.  Hunsicker,  391. 
Ackworth  v.  Kempe,  520. 
Acme  Lumber  Co.  v.  Hoyt,  581. 
Adams  v.  Davidson,  217,  242,  428,  492, 

493.  495, 

v.  Edgerton,  538. 

v.  Fassett,  297. 

v.  Franklin,  475,  476. 

v.  Hull,  396. 

v.  Way,  154. 
Addington  v.  Etheridge,  619. 
Addison  v.  Bowie,  242. 
Adee  v.  Bigler,  149,  171,  332. 

v.  Cornell,    563. 
Adler  v.  Apt,  406. 

v.  Cloud,  613. 

v.  Ecker,  137,  550,  558. 

v.  Fenton,  ior,  117,  143. 

v.    Milwaukee   P.    B.    Mfg.   Co., 

253- 
Adsit  v.  Butler,  140,  148,  157,  161,  176, 
177,  178,   271. 
v.  Sanford,  165,  271. 
/Etna  Ins.  Co.  v.  Johnson,  15. 
^tna  Nat.  Bank  v.  Fourth  Nat.  Bank, 
81. 
v.  Manhattan  Life   Ins.   Co.,  51, 

67,  68. 
v.  U.  S.  Life  Ins.  Co.,  51,  57,  541. 


Ager    ?'.  Duncan,  722. 

v.  Murray,  71,  73 
Akersz/.  Rowan,  4S1. 
Albany  City    Bank  v.    Schermerhorn, 

709. 
Albany  &   R.   I.  &  S.  Co.   v.  Southern 

Agr.  Works,  615. 
Alberger    v.    National   Bank   of   Com- 
merce, 703. 
v.  White,  357. 
Albert  v.  Back,  298. 
Albertoli  v.  Branham,  278. 
Alden  v.  Gregory,  282. 
Aldrich  v.  Blake,  348. 

v.  Earle,  490. 
Aldridge  v.  Muirhead,  94,  508,  531. 
Alexander,  In  re,  410. 
v.  Alexander,  95. 
v.  Caldwell,  489. 
v.  Crittenden,  524. 
v.  Gould,  151,  184. 
v.  Pendleton,  509. 
v.  Quigley,  264. 
v.  Todd,  430,  468. 
Alkire  v.  Alkire,  544. 
Allan  v.  McTavish,  19. 
Allen  v.  Berry,  109,  133,  340,  344. 
Center  Valley  Co..  102. 
Cole,  304. 
Cowan,  459,  463. 
Craft,  640. 
Fortier,  497. 
1  [alliday,  697,  702. 
v.  Kenned}',  704. 
v.  Kinyon,  353. 
7'.  Kirk,  436. 
t.  Massey,  47,  136. 
7'.  Montgomery,  230. 
v.  Mower,  302. 
7'.  Rundle,  4(1,  372. 
7'.  Smith,  465,  4(16,  506. 

.  Steiger,  214,  454. 
7'.  Stingel,  675. 
7\  Thomas,  8  1 . 
7'.  Vestal,  26  |. 
v.  White,  640. 


XIV 


:.'.;:.      I  IF    CASES.       [are  towages. 


Vllenspach  v.  Wagner,  214. 
Ulentown  Bank  v.  Beck,  4,|S- 
■ 
1 .    .   in,  I   17,  717,  724. 
.  \\  eller,  251,  : 
Allvn  .-.  Thurston,  155,  177,  270. 
Ahum  1 .  Leper,  14". 
Rowley,  1 

222,  438. 
Alton  .- .  Harrison,  411.  41  -•. 
Altrii  '    tpeheart,  396. 

Amblei  v.  Choteau,  : 
Amer.    Brewing     Co.  McGruder, 

Amer.  Exch.  Hank  v.  Inloes    5S1. 
Amer.    0.1k    Leather    Co.    r.    i 
619. 
v.  Wyeth  H.  &  M.  Co.,  620. 
Amer.  Sugar  Ref.  Co.  v.  Fanch< 
Amer.    Union  Tel.  Co.  v.    Middle  ton, 

73S. 
Ames,  Ex  parte \  391,  411,  714. 
; .   Hlunt,  560,  592,  717. 
v.  Gilmore,  10,  415. 

ir,  29,  317,  339,  518. 
Amherst's  Trusts,  hi  r*,  647. 
Amnion's  Appeal.  210,  437. 
Amsden  v.  Manchester,  486,  487,  501. 
Amy  v.  Manning,  337. 
Anderson  v.  Bli  682. 

v.  Bradford,  168,  169. 
v.  Briscoe,  315. 
•  ioks,  470. 
iry,  643. 
'.inn,  379. 
.  Etter,  47,  669. 
mith,  56. 
714. 
Pilgrim,  115. 
v.  Radcliffe,  247. 
v.  Reed,  338. 
.  .  Roberts,  7.  47-.  70.,. 

Wheeler,   517. 

Andrew  v.  1  linderman,  226. 

Ami  re.. 

Marshall,  45. 

V.  V. 
\ndruss  v.  Doolittli  ,  228, 

Vsh,  133. 
Annih  -■.  Annin  261,  294. 

'  '.'.       ',.  Ward, 

( 1   Wall.  Jr.  10; 

'  Lamp 

Chii 


Anthracite  Ins.  Co.  v.  Sears,  5S. 
Antrim   v.  Kelly 
Apperson  .  .  Burgett,  318,  415,   , 
Appolos  v.  Brady,  « 
Arbuckle   Bros.    Coffee  Co.  v.  Canity, 
140. 

V.  Werner,    [64,   1 70. 
Archer  v.  Lapp,  414,  500,  501. 

■■■  Long,  435. 

co  Oil   Co.  v.  North  Amer.  Oil  & 
M.  Co.,  615. 
Ardis  v.  Theus,  523. 
Arglasse  r,  Muschamp,  738. 
Ai  [edge  In  ;-<-,  231. 
Armtield  v.  Arm  field,  383. 
Armington  v.  Ran,  246,  717. 
Armitage  v.  Mace,  530. 
Armory  v.  Delamirie,  500. 
Armstrong  v.  Carr,  390. 

v.  Dunn,  217. 

v.  Holland,  595. 

v.  Lachman,  498. 

v.  Sanford,  338. 

v.  Scott,  310. 
Arnetl  v.  Coffey,  284. 
Arnholt  v.  Hartwig,  66S  671. 
Arnold  v.  Arnold,  290. 

7'.  Hagerman,  379. 

v.  Second  Nat.  Bank,  388. 
Arnot  v.  Erie  Ry.  Co.,  396. 
Arn wine  v.  Carroll.  65. 
Arthur  v.  Commercial  &  R.  R.  Bank, 
33,  480,  556,  576. 

v.  Griswold,  502. 
Artman  v.  Giles,  101,  113,  141,  260. 
Arundell  v.  Phipps,  446. 
Arzbacher  v.  Mayer,  639. 
Ashcroft  v.  Simmons,  449. 

v.  Walworth,  73,  74. 
Ashfield  v.  Ashfield,  59,  76. 
Ashhurst  v.  Given,  650,  662. 
Ashhurst's  Appeal,  694. 
Ashmead  v.  1  lean,  363. 
Aspden  -■.  Nixon,  1 54. 
Aspinall  v.  Jones,  117. 
Astor  v.  Wells,  357. 
Athey  v.  Knotts,  60. 
Atlantic   Nat.    Bank   v.   Tavener,   524, 

525.  704- 
Atty-(  ren'l  v.  Brown,  305. 

v.  Corporation  of  Poole,  260. 
7'.  <  j38. 

■     Day,  337. 

i   Windsor,  500. 
Atwood  .".  Impson,  [90,  I 

1  Exch.  I  tank  v.  Fitch,  704,  706. 
Augusta  Sav.  Bank  v.  Stelling,  740. 
Aulman  v.  A  ulman,  593. 
Aultman  &  T.  Co.  v.  Pikop,  54. 
Aurand 

ows,  c  18. 

1  lank,  4S3. 
v.  Morris,  107. 
?'.  Winston,  720. 


References']        TABLE    OF    CASES.        [are  to  pages. 


XV 


Averill  v.  Loucks,  611. 
Avery  v.  Hackley,  267. 

v.  Johan  1,  322,  688. 

v.  Judcl,  247. 

v.  Street,  403,  468. 
Ayres  v.  Hasted,  409. 

v.  Scribner,  9. 

Babb  v.  Clemson,  416,  463. 
Babcock  v.  Eckler,  16,  22,  30,  187,  188, 
192,  205,  208,  351,  369,  377,  524,  534. 

v.  Middlesex  Sav.  Bank,  483. 
Bachman  v.  Lawson,  552. 

v.  Sepulveda,  264,  318,  329. 
Bachrack  v.  Norton,  594. 
Backhouse  v.  Harrison,  687. 

v.  Jett,  17. 
Bacon  v.  Home,  614. 

v.  P.  Brockman  Com.  Co.,  632. 

v.  Scannell,  461. 
Badger  v.  Badger,  282,  2S3,  284,  512. 

v.  Story,   229. 
Baer  v.  Rooks,  11,  549,  558,  566. 

v.  Wilkinson,  563,  709. 
Bagley  v.  Bovve,  590,  605,  606. 
Bailey  v.  Bailey,  183,  198,  222. 

v.  Burton,  149,  150. 

v.  Glover,  284,  513. 

v.  Lane,  117. 

v.  Mills,   564. 

v.  Ryder,  294,  329,  739. 
Bailie  v.  McWhorter,  654,  660. 
Bainton  v.  Ward,  76,  77. 
Baird  v.  Baird,  396. 

v.  Mayor,  etc.,  of  N.  Y.,  10,  566. 
Baker  v.  Bartol,  218. 

v.  Bliss,  674,  680,  686,  688. 

v.  Connell,  396. 

v.  Gilman,  184,  211,  212,  727. 

v.  Humphrey,  37. 

v.  Keiser,  659. 

v.  Kelly,  372. 

v.  Lyman,  128. 

v.  Palmer,  518. 

v.  Pottle,  420. 

v.  Union  Mut.  Life  Ins.  Co.,  396. 
Baldwin  v.  Buckland,  593. 

v.  Cawthorne.  720. 

v.  Flash,  633,  634. 

v.  Freydendall,  436. 

v.  Hale,  517, 

v.  June,  343,  345, 

v.  Martin,  285. 

v.  Peet,  no,  553,  577,  600. 

v.  Rogers,  34,  92. 

v.  Ryan,  176. 

v.  Short,  340,  342,  347,  373,  375. 
Ball  v.  Campbell,  394. 

v.  Hancock,  640. 

v.  Loomis,  450,  551. 

v.  Slaften,  232,  233,  553. 

v.  Slafter,  229 
Ballentine  v.  Beall,  149,   150,  215,  220. 
Ballin  v.  Loch,  154. 


Ballou  v.  Jones,  l6l,  [68, 

Balto.  &  (").  R.  R.  Co.,  A.,  parte,  741. 

v.  Hoge,  430,  499. 
Bamberger    v.    Schoolfield,    S,    10,    12, 

365,  398>  45S,  47»,  7'J5- 
Bancroft  v.  Hlizzard,  357. 

v.  Curtis,  533. 
Bane  v.  Detrick,  618. 
Banfield  v.  Whipple,  354,  705. 
Bank  v.  Brier,  347,  620. 

v.  Cooper,  229. 

v.  Forney,  64. 

v.  Gilmer,   402,  414. 

v.  Harris,  170,  171,  259. 

v.  Kennedy,  262. 

v.  Martin,  584,  (107. 
Bank  of  Commerce  v.  Fowler,  669. 

v.  Payne,  553. 

v.  Schlotfeldt,  7. 
Bank  cf  Georgia  v.  Higginbottom,  411. 
Bank  of    Leavenworth    v.    Hunt,    619, 

7U- 
Bank  of  Middlebury  7'.  Rutland,  4^4. 
Bank  of  Rome  v.  Haselton,  216. 
Bank  of  Silver  Creek  v.  Talcott,  8,  607. 
Bank  of  the  Metropolis  v.  Guttschlick, 

81. 
Bank  of  the   U.   S.  v.   Housman,    188, 

191,  419,  468. 
Bank  of  Utica  v.  City  of  Utica,  328. 
Banner  v.  May,  431. 
Banning  v.  Sibley,  549. 
Bannister  v.  Phelps,  358. 
Baptist  Church  v.  Brooklyn   Fire  Ins. 

Co.,  496. 
Barbarin  v.  Saucier,  132. 
Barbour  v.  Conn.  Mut.  L.  I,  Co.,  57. 

v.  Priest,  694. 
Barhydt  v.  Perry,  208. 
Barker  v.  Barker,  165. 

v.  Bradley,  81. 

v.  Davis,  643. 

v.  Dayton,  115,  336. 

v.  French,  424. 

v.  Smith,  232. 
Barker's  Estate,  663. 
Barkow  v.  Sanger,  407,  478. 
Barling  v.  Bishopp,  183,  206,  244.  245. 
Barlow  v.  Arnold,  285. 

v.  Myers,  82. 
Barnard  v.  Moore,  391. 
Bauies,  Matter  of,  561. 

v.  Brown,  729. 

v.  Dow,  658,  660. 

v.  Gill,  243. 

v.  Morgan,  58,  73,  74,  75,  115. 

v.  Sammons,  182. 
Barnet  v.  Fergus,  619. 
Barnett  v.  Blake,  647. 

v.  Kinney,  124,  551,  615. 
Barney  v.  Griffin,  556,  560,  577,  5S4.  631. 
Barnitz  v.  Rice.  20. 
Barnum  ?>.  Hempstead.  431.  607 
Barr  v.  Church.  434,  435,  706. 


XVI 


■  <jj        TABLE    OF    CASES.        [are  to fiages. 


Barr  :■.  Cubbag' 

i  .  Reitz,  443.  4;>.  4"-.  466. 
Barrack  1 .  McCulloch,  <><>. 
Barrett  v.   Hart.  404. 

: .  Nealon,  194, 

.  :■.  Morris 

■■    :.    Bailey,    10,    140,   30^,   41;, 
426. 

.- .  Barrow,  277.  383,  717. 

: .  Paxton,  44". 
Barry  :  .  Abbot,   1  20,  -'-'••. 

1 .  Equitable  I..  A.  Soc,  56. 

r .  Kennedy,  I 
.•.  v.  Kilvington,  40. 
Bartb  v.  Backus.  614,  615.  739. 
Bank-  7 .  Nutt.  724. 
Bartles  v.  Gibson,  414,  688. 
Bartlett  v.  Blake.  7,  449. 

v.  Cheesbrough,  435. 

v.  Cheesebrough,  520. 

!eavenger.  405.  407.  44.8. 

7'.  Drew,  237.  240,  241,  26S. 

v.  McNeil,  1 16. 
Barto's  Appeal,  100. 
Barton  v.  Briscoe,  646. 

:•.    Hosner,    151,    156,    16S,    224, 
225,  229,  234. 

v.  Sitlington,  622. 

7 .  \'anheythuysen,  37. 

v.  White,  73,  74. 
Basset  v.  Xosworthy,  700. 
Bassett  v.  Budlong,  640. 

7.  McKenna,  209,  224. 

v.  St.  Albans  Hotel  Co.,  140. 
Batchelder  v.  White,  8. 

.ham,  225,  262,  318. 
Bates  v.  Ableman,  598. 

v.  Bradley,  229,  230, 

v.  Callender,  93. 

v.  Campbell,  469. 

;■.  Cobb,  203. 

v.    Lidgerwood,     Mfg.    Co.,    164, 
242. 
.  Lyons,  142. 

v.  Plonsky,  159,  161,  217. 
Batten  :■.  Smith,  233. 
Battenhausen  v.  Bullock,  675. 
Battles  t\  Laudenslager,  9,  499. 
Baughman  v.  IV. m,  S,  9. 
Bauknigbl  v.  Sloan,  215,  218,  259. 
Baum  v.  P 

Baumann  ?■.  Jefferson,  552. 

Bauserman  v.  Blunt.  123. 

Baxter  Moses,    140,    142,    14:      I'  7. 

172. 
Bay  v.  Cook 

V.   Hoffman,  40,  51,  58,  67.   107, 
127. 
Baym 
Bayspoole  v.  Collins,  374. 

Iron  Co       1  loodall,  202,  309. 
1  per,  133. 
I;   '     Evans  Co        Reeves,  689. 
r,  172. 


Beach  v.  Viles,  135. 

v.  White,  210. 
Beadle,  In  re,  574. 
Beal  v.  Lehman-Uurr  Co.,  278. 
Beals  -'.  Guernsey,  448. 
Beamish  v.  Hoyt,  06. 
Bean  v.  Edge,  -  1 . 

v.  Patterson,  593. 

v.    Smith,    48,    S8,    III,  343,  416, 
700. 
Beans  v.  Bullitt,  549. 
Beard  v.  Dedolph,  529. 
1  leards  v.  Wheeler,  365. 
Beardsley  v.  Frame,  566. 
Beardsley   Scythe   Co.    v.   Foster,  251, 

252,  270,  271. 
Beasley  v.  Bray,  427. 
Beatty  v.  Fishel,  12. 
Beaubien  v.  Beaubien,  274,  2S4,  516. 
Beaumont  v.  Herrick,  III,  266. 
Beaupre  v.  Noyes,  184. 
Beck  z1.  Burdett,  6,  97,  129,  14S. 

v.  Parker,  564. 
Beck's  Estate,  663. 
Becker  v.  Torrance,  82,  115,  235,  298. 
Beckwith  v.  Burrough,  51,  450,  465. 

v.  Union  Bank,  553. 
Bedell  v.  Chase,  370,  494. 

v.  Scruton,  517. 
Bedford  v.  Penny,  688. 
Beebe  v.  Saulter,  224. 
Beecher  v.  Clark,  360,  376,  419. 

v.  Wilson,  534. 
Beeckman  v.  Montgomery,  203,  206. 
Beels  v.  Flynn,  32,  411. 
Beene  v.  Randall,  302. 
Beer  v.  Hooper,  517. 
Beidler  v.  Crane,  342,  423,  425. 
Belden  v.  Younger,  94. 
Belford  v.  Crane,  29. 
Belgard  v.  McLaughlin,  316. 
Belknap  v.  Bender,  81. 
Bell  v.  Fleming's  Exrs.,  391. 

v.  Johnson,  214. 

v.  Lamprey,  517. 

v.  Leggett,  712. 

v.  McCloskey,  462,  466. 

v.  Merrifield,  293,294,  311,  324. 

v.  Watkins,  659. 
Bellamy  v.  Bellamy,  717,  726. 
Bellows  v.  Wells   470. 
I   Belmont  Branch  Bank  v.  Hoge,  687. 
Belt  v.  Ferguson,  544. 

v.  Rauget,  437. 
Belton  v.  Hatch,  71. 
Benedict  v.  Huntington,  606,  607. 
Benevolent  Order,  etc.  v.  Sanders,  614. 
Benfield  v.  Solomons,  592. 
Benford  v.  Schell,  45S,  466. 
Benjamin  v.  McElwaine-Richards  Co., 

495- 

Benne  v.  Schnecko,  406,  407,  410,  536. 
Bennet,  Ex  parte,  647. 
Bennett  v.  Buchan,  674. 


References']       TABLE    OF    CASES.        [are  to    ..■ 


Bennett  v.  Chapin,  640. 

v.  Ellison,  557,  577.  584. 

v.  McGuire,  115,  116. 

v.  Minott,  167. 

v.  Stout,  140. 

v.   Wright,  334. 
Benson  v.  Benson,  1S2. 

v.  Flower,  68. 
Bentlev  v.  Whittemore,  614. 
Benton  v.  Allen,  255. 

v.  Snyder,  451. 

v.  Thornhill,  408. 
Bentz  v.  Rockey,  19,  34. 
Bergen  z'.  Carman,  no,  121,  315. 

v.  Snedeker,  315. 
Bergen   v.  Varrelmann,    54S,   597,  603, 

708. 
Bernard  v.  Barney  Myroleum  Co.,  126. 
Berney  Nat.  Bank  v.  Guyon,  616. 
Bernheim  v.  Beer,  38. 

v.  Dibrell,  502. 
Bernheimer  v.  Rindskopf,  9,  10,  389. 
Berry  v.  Riley,  556. 
Berryman  v.  Sullivan,  153. 
Bery  v.  Hall,  414. 
Besson  v.  Eveland,  533,  534. 
Best  v.  Staple,  246. 
Beste  v.  Burger,  563,  579. 
Bethel  Steam  Mill  Co.  v.  Brown,  465. 
Betts  v.  Carroll,  703. 

v.  Union  Bank,  395. 
Betz  v.  Snyder,  554. 
Beuerlein  v.  O'Leary,  351,  501. 
Beus  v.  Shaughnessy.  5S4,  586. 
Beyer  v.  Thoeming,  8S. 
Bholen  v.  Cleveland,  614. 
Bibb  v.  Baker,  411,  426. 

v.  Freeman,  18,  181. 
Bice  v.  Rogers,  370. 
Bickham  v.  Lake,  610,  611. 
Bickler  v.  Kendall,  415. 
Bicknell  v.  Mellett,  480,  685. 
Biddinger  v.  Wiland,  692. 
Bidlack  v.  Mason,  239. 
Bierne  v.  Ray,  275,  413,  434,  435,  504. 
Bigelow  v.  Andress,  159,  172. 

v.  Ayrault,  51,  58,  276. 

v.  Doolittle,  410,  411. 

v.  Stringer,  428,  568,  573,  609. 
Billhofer  v.  Heubach,  150. 
Billings  v.  Billings,  352. 

v.  Marsh,  87,  660. 

v.    Russell,    351,    352,    36S,    373, 
374.  375,  381. 

v.  Stewart,  115. 
Billingsley  v.  Bunce,  609. 

v.  White,  458. 
Billington  v.  Sweeting,  526. 
Billson  v.  Crofts,  647. 
Billups  v.  Sears,  113. 
Bingham  v.  Weiderwax,  396. 
Binks  v.  Rokeby,  219. 
Binnie  v.  Walker,  176. 
Bird  v.  Andrews,  431. 
B 


Bird  -■.  Bolduc,  437. 

Birdsall  v.  Russell,  672,  673,  074. 

Birdsall  W.  ,V  1'.  Mfg.  Co.  v.  S<  hwarz, 

613. 
Birely's  Ex'rs  v.  Staley,  114. 
Birkbeck  v.  Ackroyd,  392. 
Birmingham    D.  (1.  Co.  v.    Kelso,   480, 
621,  622. 
v.  Roden,  480,  621,  622. 
Birmingham  Nat.  Bank  v.  Steele,  302. 
Bisbing  v.  Third  Nat.  Bank,  469. 
Bishop  v.  American  Preserver's  Co., 

724- 

v.  O'Connell,  454,  461. 

v.  Schneider,  668. 

v.  Stebbins,  410,  666,  703. 

t.  Warner,  619. 
Bissell  v.  Hopkins,  443,  448. 
Black  v.  Kuhlman,  374. 

v.  Nease,  194,  203. 
Blackman  v.  Preston,  406,  419. 

v.  Wheaton,  37,  3S,  451. 
Blackstone    Bank   v.    Davis,    639,  640, 

642,  654. 
Blaechinska  v.  Howard  Mission,  etc., 

.392. 
Blair  v.  Finlay,  273. 

v.  Illinois  Steel  Co.,  149. 

v.  Smith,  88,  69S. 
Blaisdell  v.  Cowell,  12. 
Blake  v.  Blake,  223,  724. 

v.  Boisjoli,  34,  54,  188. 

v.  Freeman,  738. 

v.  Savvin,  231. 

v.  White,  501. 
Blakeslee  v.   Rossman,  406,  452,   619, 

630,  632,  633. 
Blanc  v.  Paymaster  Min.  Co.,  167,  254, 

255- 
Blanchard  v.  Mann,  485. 
Bland  v.  Fleeman,  690. 
Blandin,  /;/  re,  524. 
Blankenship  &  B.  Co.  v.  Willis,  494. 
Blant  v.  Gabler,  370,  450,  459. 
Bleecker  v.  Johnston,  432. 
Bleiler  v.  Moore,  436. 
Blenkinsopp  v.  Blenkinsopp,  100. 
Blennerhassett    v.    Sherman,    52,    374, 

375,  406,  412,  418,  419,  420,  422. 
Blight  v.  Schenck,  592. 
Blish  v.  Collins,  498. 
Bliss  v.  Matteson,  535,  597,  711. 

v.  West,  379. 
Block  v.  Darling,  727,  730,  731. 
Blodgett  v.  Chaplin,  426. 
Bloedorn  v.  Jewell,  88. 
Blondheim  v.  Moore,  333. 
Bloodgood  v.  Clark,  116,  331. 
Bloom  v.  Moy,  180. 
Blount  v.  Costen,  215. 
Bloxam  v.  Elsee,  73. 
Blue  v.  Penniston,  498. 
Blum  v.  McBride,  26. 

v.  Simpson,  674,  690. 


XV111 


i  «]      TABLE   I  >F   CASES.      [  •"■  ' 


Blumer  v.  Bennett,  357,  4.78. 
Bluthenthal  :.  Magnus,  [93,  576. 

man  1 .  Halliday,  579,  606,  611. 
1  h  erall,  201. 

ibb,  -51.  - 

■  ell,  r7r- 

245     ;lr- 
v.  King 

land,  S9. 

Richards,  94,  532. 
264. 
: .  Thompson,  90. 
Bohannpn  v.  Combs,  545. 
Bohn  v.  Weeks 

■.■  r.  670. 
.  .  Dean,  183,  244. 
-44- 

Trust  Co.,  641. 
Bomar  1 .  Means,  215,  254. 
Bomberger  v.  Turner,  164. 
Bonesteel  V.  Sullivan,  717,  734. 
Bongard  v.  Block,  183,  244. 
Bonsall  v.  Comly,  93. 
Bun  wit  v.  Heyman,  579. 
1    v.  Boog,  [83 

:  v.  Worrill,  412,  416,  426. 
Boone  v.  Chiles,  512,  669. 

Hall,  229. 
Boone  County  v.  Burlington  &  M.  R. 
R.  Co.,  509. 
! .  Keck,  259. 
Boone  County  Nat.  Bank  v.  Latimer,  84. 
Booss  v,  Marion,  389,  562,  563,  609. 
Booth  v.  Barnum,  674. 

Punce,  36,  109,  133,  498. 
v.  Carstarphen,  16,  352,  355. 

iark,  238. 
v.   Patrick,  228. 
V.    1'owcrs,  4S5. 
V.  Warrington,  2S6,  513. 
Boothliy  v.  Brown,  454. 
Boothroyd,  In  1 
Borden  v.  Doughty,  341. 

Borland  v.   Mayo,  415. 
V.    Walker,  340. 
Born  v.  Shaw,  122,  437,  453. 
Borst  7.  Cony,  541. 
Boston  Music  Hall  Assoc,  v.  Cory,  405. 
twick  v,  Blake,  4.19,  4S0,  4S1. 
v.  Burnett,  304. 

v.  Menck,  1 16,  234,  235,  236,  316. 
I  win.  391, 
Beers,  [67. 
Bott  V.  Smith.  ' 
Boud  v.  Bronson,  402. 
Bouquet  v.  I  leyman,  [94. 
Bourn  1 

Bouslough  v.  Bouslough,  183,224,  244. 
Bowden  ■■.  Johnson,  234,  2S1,  303,  432. 
Spellman,  4<;i,  492. 
. 

I  v.  A  r it-  lid 

7 .  ( lampbell,  120. 

I  ■)  7  .   Plan- 


Powen  7'.  Clark,  623. 

v.  Evans,  670. 

v.  Gent,  215. 

v.  lioskins,  103. 
Bowerman  v.  Bowerman,  487. 
Powers  v.  Keesecher,  288. 
Bowery  Bank  Case,  615. 
Bowes  v.  Foster,  717. 
Bowlsby  7'.  Tompkins,  245. 
Bowman  v.  Houdlette,  434. 
Bownes  v.  Weld,  142. 
Bowser  v.  Cole,  618. 
Box  v.  Goodbar,  548. 
Boyce  v.  Grundy,  99. 
Boyd,  Ex  parte,  116,  140,  281. 

v.  Beck,  671, 

v.  Boyd,  283,  285 

v.   De  La   Montagnie,   728,   729, 
730. 

v.  Dunlap,  341,  343. 

t\  Ellis,  414,  415. 

v.  Hoyt,  251,  260,  289,  291. 

7'.  Jones,  496. 

v.  Olvey,  230. 

7'.  Turpin,  374. 
Boyer  v.  Berryman,  475. 
Boyle  r.  Zacharie,  517. 
Boynton  7'.  Rawson,  298,  708. 

v.  Rees,  698. 

v.  \'eazie,  465. 
Bozman  v.  Dtaughan,  375. 
Brace  v.  Berdan.  391, 
Brackett  v.  Griswold,  119,  502. 

v.    Harvey,    229,    584,   619,    621, 
623,  630,  631. 

7     Waite,  437. 

V.  Watkins,   93. 
Bradbury  v.  Falmouth,  673. 
Bradford  v.  Bradford,  670. 

7'.  Rice,  518. 

v.  Tappan,  717. 
Bradford's  Appeal,  539. 
Bradley  v.  Bischel,  564,  612. 

v.  Buford,  303,  410,  454. 

v.  Converse,  237. 

v.  Fuller,  118. 

v.  Obear,  45. 

v.  Peixoto,  641. 

7'.  Ragsdale,  363,  374. 
Bradner  v.  Holland,  252,  291. 
Bradshaw  :■.  Yates,  730. 
Bradwell  v.  Weeks,  81. 
Brady,  Matter  of,  518. 

v.  Briscoe,  375. 
Braem  v.  Merchants'  Nat.  Bank,  120. 
Bragg  v.  Gaynor,  58,  67,  106. 
Brainerdz/.  Dunning,  567,607,610,616. 
B  ram  an  v.  Johnson,  55. 

7'.   Stiles,  656. 
Bramhall    v.    Ferris,   65,   86,   640,  647, 

654,  660,  '>''! . 
Branch  Bank  of  Decatur  v.  Kinsey,  394. 
Branch      Bank      of     Montgomery     v. 
Hodges,  312. 


References']       TABLE    OF    CASES.        [are  to  fages. 


XIX 


Brandies  v.  Cochrane,  75,  77,  78. 
Brandon  v.  Aston,  647. 

v.    Robinson,    64,    65,    641,   646, 
651,  654,  657,  663. 
Brantom  v.  Griffith,  471. 
Brashear  v.  West,  549,  571,  704. 
Brasher  v.  Jamison,  347. 
Brawn  v.  Keller,  445,  463. 
Breathwit  v.  Bank  of  Fordyce,  488. 
Breckenridge  v.  Taylor,  483. 
Bree  v.  Holbech,  514. 
Breeding  v.  Davis,  95. 
Brenan  v.  Burke,  68. 
Brennan  v.  Willson,  554,  562. 

v.  Wilson,  433. 
Brett  v.  Carter,  625,  626,  627,  628. 
Brewer  v.  Connell,  543. 
Brewster  v.  Power,  108,  242. 
Brice  v.  Lide,  483. 

v.  Myers,  37,  45,  437. 
Brick  v.  Campbell,  56. 
Brickett  v.  Downs,  387. 
Bridge  v.  Eggleston,  489,  490. 

v.  Ward,  661. 
Briggs  v.  Beach,  381. 

v.  Merrill,  322,  342,  722. 

v.  Mitchell,  355,  535-. 

v.  Oliver,  139,  219. 

v.  Parkman,  626. 

v.  Spaulding,  262. 
Brigham  v.  Luddington,  239. 

v.  Tillinghast,  585. 
Brinckerhoff  v.  Bostwick,  144,  263. 
Brine  v.  Insurance  Co.,  650. 
Brinkerhoff   v.    Brown,    14S,    172,    176, 

178,  217,  260,  2S8,  521. 
Brinks  v.  Heise,  363,  431. 
Brinley  v.  Spring,  428. 
Brisco  v.  Norris,  354,  534. 
Briscoe  v.  Bronaugh,  20. 
Bristol  Co.  Sav.  Bank  v.  Keavy,  485,  503. 
Brittain  v.  Crowther,  474,  497,  688. 
Britton  v  Lorenz,  592. 
Broadway  Nat.  Bank  v.  Adams,  65,  87, 

614,  655,  658,  660,  742. 
Brockenbrough  v.  Brockenbrough,  635. 
Broderick's  Will,  694. 
Bronson    v.    Wilmington    N.    C.    Life 

Ins.  Co.,  253. 
Brooks  v.  Caughran,  244. 

v.  Hanford,  553. 

v.  Peck,  220. 

v.   Powers,  449. 

v.  Schwerin,  392. 

v.  Stone,  100,  148,  159. 

v.  Wilson,  147,  151,  311. 

v.  Wimer,  609. 
Brookville  Nat.  Bank  v.  Kimble,  524. 
Broughton  v.  Broughton,  734. 
Brouwer  v.  Harbeck,  481,  482. 
Brower  v.  Peabody,  669. 
Brown,  Matter  of,  199. 

v.  Armstrong,  591. 

v.  Ashbough,  123. 


Brown  v.  Bank  of  Miss.,  172,  17S. 

.  .  Hates,  154,  218. 

v.  Bronson,  135,  543. 

v.  Brown,  155,  225. 

v.  Campbell,  153,  515. 

v.  Chase,  336. 

v.  Chubb,  10S,  164,  313,  343. 

v.  County  of  Buena  Vista,  511. 

v.   Dean,  9. 

v.  Farmers'  &   M.  Banking  Co., 
232. 

v.  Fitz,  31. 

v.  Gilmore,  235. 

v.  Guthrie,  54S,  631. 

v.  Haven,  2S8. 

v.  Heathcote,  230. 

v.  Herr,  47^. 

v.  John  V.  Farwell  Co.,  297. 

v.  J.  Wayland  Kimball  Co.,  141. 

v.  Knox,  577. 

v.  Long,   141. 

v.  Nichols,  115,  129,  130,  708. 

v.  O'Neal,  454. 

v.  Piatt,  634. 

v.  Rawlings,  387. 

v.  Reilly,  737- 

v.  Ricketts,  215. 

v.  Smart,  517. 

v.  Snell,  109,  133. 

v.  Spivey,  540. 

v.  Texas  C.  H.  Co.,  414. 

v.  Volkening,  442. 

v.  Williamson,  65,  650,  662. 

v.  Work,  618. 
Brown  Chemical  Co.  v.  Meyer,  72. 
Browne  v.  Hernsheim,  141,  214. 
Brownell  v.  Curtis,  231,  304. 

v.  Stoddard,  526. 
Browning  v.  Bettis,  6S,  116. 

v.  Hart,  231. 

v.  Morris,  729. 
Brownsword  v.  Edwards,  29. 
Bruen  v.  Dunn,  669. 
Bruggerman  v.  Hoerr,  1S4. 
Brummel  v.  Stockton,  454. 
Brundred   v.    Patterson    Machine  Co., 

484. 
Bruner  v.  Brown,  22,  312. 
Bruns  v.  Stewart  Mfg.  Co.,  339. 
Brunswick  ;-.  McClay,  463. 
Bryan  v.  Knickerbacker,  660,  661. 

v.  Spruill,  275. 
Bryans  v.  Taylor,  67. 
Bryant  v.  Bryant,  225. 

v.  Kelton,  20. 

v.  Simoneau,  S,  15. 

v.  Young,  424. 
Bryce  v.  Foot,  589. 
Buchanan  t.  Marsh,  100,  152. 

r'.  Smith,  481. 
Buck  v.  Ross,  237. 

T'.  Sherman,  S. 

v.  Voreis,  113,  114,  375,  473,  506, 
698. 


XX 


.  •     •   n...  TABLE    OF    CASES.       [are  to  pages. 


Buckingham  :.  Walker,  215,  21S. 
Buckiand  v.  Gallup,  561. 
Buckley  1 .  Duff,  [93. 

: .  I  >unn 

r.  Wells,  532,  533. 

.- .  \\  beeli 
Buckner  1  2S4,  2S5. 

Stine,  4S2. 
Budd  v.  Atkinson,  701. 
Buell  v.  Rope,  24.  413,  557.  mi. 
Buffingion  v.  Harvey,  253,  254. 
BufTum  r.  Jones,  434. 
Buford   v.  Keokuk   N.   L.   Packet  Co., 
214. 

.- .  Shannon,  396. 
gent,  2SS. 
Buhl  Iron  Works  v.  Teuton,  451,  4(13. 
Bulger  v.  !<•  sa,  369,  389,  390,  460. 
Bulkley  v.  Buffington 
Bull  v.  Bray,  377. 

t  rriswold,  470. 
Bullenc  v.  Smith,  27. 
Bullis  v.  Montgomery,  491. 
Bullitt  v.  Taylor,  153,  154.  717. 
Bullock  v.  Narrott,  1?. 

:  .  Williams.  444,  618. 
Bulmer  r.  Hunter,  536,  537. 
Bumpas  v.  Dotson,  434,  435. 
Bunn  v.  Ahl,  28,  352,  375. 

v.  Bunn,  309, 
Bunnell  v.  Gardner,  85,  S7,  639,  650. 
Burbank  v.  Wiley,  493. 
Burchinell  v.  Weinberger,  4=;S. 
Burdell  v.  Burdell, 
Burdick  v.  Gill,  2nd,  366,  372,  413. 

t.  Jackson,  714. 

V.    Post.    26. 

Burdsall  r .  Waggoner,  27S. 

Burford  v.  Steele.  272. 

Burgert  v.  Borchert,  7.25,  26,354,  454. 

Burgett  v.  Burgett,  214. 

Burke  1 .  Adams,  214. 

v.  Burke,  432. 

v.  Smith,  507. 
Burkey  v.  Self,  437. 
Burlen  v.  Shannon,  367. 
Burley  v.  Hartson,  I 
Burti-  .-  .  ( lade,  I  - 
Burnett  v.  Gould,  140,  155.  T7i- 
Burnham  v.  Brennan,  24,450.490,674. 

-■.  Mi  Mil  hael, 
Burns  v.  Morse,  i4'>. 
Burr  v.  Beers,  Si,  -2. 

v.  Clement,  23,  -<>}.  704. 
Burras  v.  Looker,  310. 
Bun  •  pie,  183.  222. 

Burt    :  7.  220,  272. 

v.  Panjaud,  v 

v.  Timmons,  60,  198. 
Burtis  7 .  I)i'  kinson, 
Burtoi 

1.  58,  223. 
■    »son,  536. 


Burton  v.  Platter,  193,  199.  477. 
Burtus  v.  Tisdall,  3,  2S1, 
Burwell  v.  Fauber,  680. 
Busey  v.  Smith,  741'. 
Hush  v.  Collins,  375. 

v.    Roberts,   48S,   489,   6S1,    683, 
686,  691. 

v.  Rogan,  717. 
Bushnell  2.  Bushnell.  224. 

r.  Eastman,  121. 
Buswell  r.  Lincks,  176,  178,  293,  329. 
Butcher  v.  Harrison,  229. 

v.  Stultz,  423. 
Butler  v.  Butler,  544. 

7.  Hildreth,  232,  723. 

v.  Howell,  459. 

7 .   Moore,  44. 

v.  Spann,  215,  288. 

v.  Watkins,  498. 

v.  Wendell,  551. 
Butterfield  v.  Stanton,  528. 
Butteruorth,  In  re,  203. 
Button  v.  Rathbone,  141,  143,  619. 
Butts  v.  Peacock,  406. 
Byrne  v.  Becker,  357,  558. 
Byrnes  v.  Clarke,  392. 

v.  Lewis,  306,  307. 

z\  Stilwell,  643. 
Byrod's  Appeal,  214. 

Cadbury  7\  Xolen,  466. 

Cadogan  v.  Kennett,  34,  37,  38,  42,  46, 

52,  363.  456. 
Cadu  allader  v.  West,  730. 
Cady  v.  Leonard,  275. 

7'.  Whaling,  168. 
Cahill  v.  Bigelow,  387. 
Cahn  v.  Person,  109. 
Cahoon  v.  Marshall,  492. 
Cake  v.  Pottsville  Bank,  370. 
Caldwell  v.  Montgomery,  68. 
Callan  v.  Statham,  416,  417. 
Callanan  v.  Shaw,  336. 
Callis  v.  Waddy,  514, 
Cambridge    Valley     Bank    v.     Delano, 

672,  675,  694. 
Camden  v.  Stuart,  238. 
Camp  v.  Thompson,  451. 
Campau  7'.  Chene,  640. 
Campbell  v.  City  of  Haverhill,  73,  74. 

v.  Colorado  Coal  &   I.  Co.,  714, 
7"=. 

7'.   Dearborn,    736. 

7'.  First  Nat.   Bank,  725. 

7'.  Fish,  66. 

v.  Foster,  36,  638,  650. 

7'.  Genet,  <>2,  1 1 5. 

7\  I  [amilton,  463, 

7 .  James,  74. 

v.  Jones,  254,  255. 

7'.  Mackay,  287. 

7'.  Smith,  8i . 

v.  Woodworth,  567,  589,  607. 
Campion  v.  Cotton,  383. 


References']       TABLE    OF    CASES.       \  are  i 


Canal  &  C.  Sts.  R.  R.  Co.  v.  Hart,  116. 
Candee  v.  Lord,  14(1,  194,  475. 
Cannon  v.  Norton,  304. 

v.  Young,  485. 
Cansler  v.  Sallis,  181. 
Canton  v.  Dorchester,  720. 
Cantrell,  /;/  re,  619,  623. 
Capital  City  Bank  v.  Parent,  151 

v.  Wakefield,  255. 
Capron  v.  Porter,  444,  452. 
Carbiener  v.  Montgomery,  196. 
Card  v.  Walbridge,  229. 
Carey  v.  Giles,  46. 
Carey-Halliday   Lumber  Co.   v.   Cain, 

423. 
Cargill  v.  Kountze,  281. 
Carhart  v.  Harshaw,  92. 
Caring  v.  Richmond,  631. 
Carl  v.  Smith,  93,  437. 
Carleton  v.  Banks,  315. 
Carlisle  v.  Tindall,  107,  176. 
Carll  v.  Emery,  719,  723. 
Carnahan  v.  McCord,  666. 

v.  Wood,  492. 
Carney  v.  Carney,  492. 
Carpenter  v.  Buller,  608. 

v.  Carpenter,  206. 

v.  McClure,  196. 

v.  Muren,  407,  489. 

v.  Osborn,  270. 

v.   Roe,    191,    192,    199,   208,  361, 

534- 

v.  Tatro,  529. 

v.  Underwood,  573. 
Carr  v.  Breese,   191,  196,  199,  200,  207, 
208. 

v.  Briggs,  354. 

v.  Carr,  423,  736. 

v.  Effinger,  640. 

v.  Gale,  231. 

v.  Hilton,  236,  284,  514. 

v.  Van  Hoesen,  158,  159,  241. 
Carroll  v.  Aldrich,  216. 

v.  Else,  575. 

v.  Hayward,  681,  685. 
Carson  v.  Stevens,  523. 
Carter  v.  Bennett,  146,  476. 

v.  Carter,  647. 

v.  Castleberry,  109. 

v.  Grimshaw,   206,  358,  361,  376. 

v.  Gunnels,  15. 

v.  Kerr,  2S8. 

v.  Willard,  449,  464. 
Cartwright  v  Phcenix,  466. 
Cartwright's  Case,  353. 
Carver  v.  Barker,  204,  421. 

v.  Peck,  73. 
Carver  Gin  &  M.  Co.  v.  Bannon,  388. 
Cary  v,  Hotailing,  501. 
Casanova  v.  Aregno,  520. 
Case    v.    Beauregard,     roo,     102,     139, 
140,  141,   142,  145,  166,  178, 
388,  389. 

v.  Gerrish,  712, 


Case  v.  Phelps,  135,  199,  203. 
Case  Mfg.  Co.  v.  Perkina,  525. 
Casey  v.  Janes,  588. 
Casey's  Trust,  In  re,  047. 
Cason  v.  Murray,  556. 
Cassaday  7r.  Anderson,  170. 
Cassell  v.  Williams,  93. 
Cassidy  v.  Meacham,  271. 
Castle  v.  Bader,  172. 

v.    Bullard,   400,   431,    486,    497, 
498. 

v.  Lewis,  160,  175, 

v.  Palmer,  31. 
Caswall,  Ex  parte,  76. 
Caswell  7'.  Hunch,  740. 

v.  Hill,  60. 
Catchings  v.  Manlove,  150. 
Cates  v.  Allen,  100,  ioi,  136,  137,  139. 
Cathcart  v.  Robinson,  47. 
Catlin  v.  Currier,  C20,  623. 

v.  Doughty,  115. 

v.  Eagle  Bank,  615. 

v.  Wilcox  S.  P.  Co.,  615. 
Caton  v.  Mosely,  590. 
Catt  v.  Wm.    Knabe  &  Co.  Mfg.  Co., 

533. 
Caulfield  r.  Maguire,  647. 
Cavanagh  v.  Morrow,  547. 
Cavender  v,  Smith,  414. 
Cecil  Bank  v.  Snively,  108. 
Cedar  Rapids  Ins.  Co.  v.  Butler,  507. 
Central  Bank  of  Washington  -•.  Hume, 

56-  57,  54L  542. 
Central   Nat.    Bank  v.   Seligman,   597, 

601,  602,  603,  704. 
Central    R.  R.  &   B.  Co.    z\    Brunswick 

&  W.  R.  R.  Co.,  553. 
Central  Trust  Co.  v.  Continental   Iron 

Works,  391. 
Cerf  v.  Wallace,  233. 
Chadbourn  v.  Williams,  530,  534. 
Chadbourne  v.  Coe,  139. 
Chad  wick  t.  Fonner.  4<i"- 
Chafee  v.  Blatchford,  583. 

v.    Fourth    Nat.    Bank,    123.  551, 
614. 
Chaffee  v.  Fort,  561. 
Chalfont  v.  Grain.  ~}. 
Chamberlain  v.  O'Brien,  233,  698. 

v.  Stern,  459. 

v.  Twyne.  412. 
Chamberiin  ?>.  Jones,  323. 
Chambers  v.  Sallie,  93,  540. 

v.  Smith,  610. 

v.  Spencer,  80,  437. 
Chandler  r1.  Hollingsworth,  544. 

?'.  Parsons,  381. 

v.  Powers,  506. 

v.  Von  Roeder.  1  to. 
Chapin  v.  Jenkins,  232. 

v.  Pease,  717,  720,  724. 

v.  Thompson,  500,  551. 
Chapman  v.  Banker  &  T.  Pub.  Co.,  54, 
215. 


XX11 


K«]        TABLE     OF    CASES.        [are  to  pages. 


Chapman  v.  Emery.  I  J 

Chark 

Charier  : .  Ste>  ens,  - 

Charter  Oak    Life    Ins 

541- 

Cha-v  .   I-.:.  -44 

517. 
v.  11  11  ti  n,  4' i". 

.     41;'-. 

: .  Redding,  291. 

.    .  ■ 
■'. 
Chautauqi.'  nk   v.   Risley,   66, 

[61,  268,  313,  315,  316,  317, 

: .  \\  nite,  317. 
Cheatham    v.    Hawkins,    22.    460,   609, 

Cheever  v.  Rutland  &  B.  R.  R.  Co.,  336. 

Chenery  v.  Palmer,  424,  I 

Chester  v.  Bower.  464. 

Chesterfield  v.  Janssen,  2S,  98. 

Chew  v.  Ellingwood.  615. 

Chewett  v.  Moran,  220.  264 

Chicago    Bridge    Co.    v.   Anglo-Amir. 

Pack.  Co.,  153,   [67. 
Chicago  &   A.  Oil  &   M.  Co.   v.  U.  S. 

Petroleum  Co.,  336. 
Chickering  v.  Hatch,  424. 

v.  White.  45-. 
Child  v.  Brace,  14-.  179. 
Childs  v.  Connor 

v.   Hurd.  394. 

v.  Kendal 
Chillingwortb  v.  Pastern  Tinware  Co., 

474- 
Chipman  v.  McClellan,  4S1. 

r .  Peabi  "lv.  124. 
Chittenden  v.  Brewster.   1  =  5. 
Chophard  v.  Bayard,  619. 
Choteau  v.  [ones,  22 
Christian    r:.    Atlantic    &    \.    C.    R.  R. 
Co.,  215.  249. 
1 1         wood,  323. 
Christie  v.  Bridgman.  416, 
Christy  v.  Scott 
Chubb  v.  Upton 
Church  v.  Chapin,  437,  476. 
<  Ihurch,  '  97. 

V.  Muir.  720,  726. 
Churchill  v.  Hill,  610. 

Wells,  2<m,,  210. 

1  ly  ,  .  Rhodes,  'it . 
1  in'  Bank  v.  Bholen,  308. 

William-.  -.,_), 

Citizens'  Nat.  Bank  1  272,426. 

City  Bank  v.  Blackmore 

-.-.  Westbury,  I 
City  Nat.  Bank  v.  Bridgers,  434,  436. 
i ,     dricl 

I  l.imilton.     187,   204,  2' 
49>i  533, 


City  of  Pexinc;ton  v.  Butler,  263. 
City  of  Newark  r.  Punk,  58,67. 
Clarlin  7.  Ambrose,  529. 

v.  Ballance,  492. 

v.  Claflin, 

7'.  Frenkel,  123. 

v.  Gordon,  298,  709. 

7'.  Lenheim,  672. 

v.   Lisso,  317. 

7'.  McDermott,  122,  140,  153,  154. 

V,  Mess.  197. 

v.  ( tstrom,  82. 

7'.  Rosenberg,  454. 

V.  Smith.  307. 
Clagett  v.  Gibson,  244. 
Clan  Ranald   v.  Wyckoff,  75. 
Clapp  v.  Uittman,  594. 

7'.  Ely,  408. 

7'.  Ingraham,  75. 

v.   Leatherbee,  244. 

v.  Smith,  67. 
Clark  7'.  Andrews,  710,  713. 

v.  Anthony,  146,  476. 

v.  Beecher,  326,  543. 

7.  Bever,   131,  237. 

v.  Chamberlain,  358,  361. 

v.  Clark,  521. 

7'.  Clough,  224. 

r.  Depew,  188,  42G. 

v.  Dickinson,  560. 

v.  Douglass,  37,  146,  40S,  476. 

7'.  Finlon,  423. 

v.  Foxcroft,  146,  242. 

7p.  French,   [96. 

v.  Gibson,  3S6. 

7.  Hougham,  514. 

7'.  Howard,  81. 

7.  Hyman,  625,  62S. 

7'.  Killian,  7,  206,  208. 

v.  Krause,  294,  329,  346,  414, 
432.  435,  46S.  474,  475,  502, 
542.  704- 

v.  Lee,  461. 

v.  Morrell,  365. 

v.  Robbins,  574. 

v.  Stanton,  591. 

v.  Van  Riemsdyk,  432. 

v.  Wilson,  491. 

v.  Wise,  410,  411. 
Clarke  v.  Boorman's  Ex'rs,  511. 

:•.  I.aird,  139. 

7.  Rist,  298. 

7.  White,  308,  501. 
Clarkson  v.  De    Pevstcr,  149,  157,  176, 

17S,  218. 
Clary  7-.  Frayer,  453. 
Clason  7'.  Morris,  304. 
Clay  v.  McCally,  379. 

-■.  Smith,  1S5. 

v.  Walter,  383. 

7'.  Williams,  726. 
Clayton  v.   Brown,  437. 

7'.  Johnson,  577. 
Cleghorn  v.  Say  re,  595. 


References]        TABLE     OK    CASKS.        [ar 


XXI 11 


Clemens  v.  Brillhart,  II. 

Clement  v.  Cozart,  1S1,  1S7,  190,  tg6. 

Clements  v.  .Moore,  32,  37,  38,  44,  52, 
84,  30S,  310,  320,  321,  341,  345,  346, 
357,  432,  479,  490,  681,  689,  692. 

Cleveland  v.  Chambliss,  166. 

Clews  v.  Kehr,  489. 

Clift  v.  Moses,  345,  346. 

Clinton   Hill    L.  &   M.   Co.   v.   Strieby, 

425- 
Clough  v.  Thompson,  231. 
Clow  v.  Woods,  453,  463,  466. 
Clute  7'.  Kitch,  467. 

v.  Newkirk,  46S. 
Coates  v.  Day,  264. 

v.  Gerlach,  406,  419. 
Coats  v.  Donnell,  615. 
Cobb  v.  Day,  11. 
Coburn  z:  Pickering,  24,  446,  449,  619. 

v.  Proctor,  685,  686. 
Cochran  v.  Wiechers,  268. 
Cockell  v.  Taylor,  247. 
Cocks  v.  Varney,  160. 
Cockshott  v.  Bennett,  711, 
Coe  v.  Whitbeck,  150. 
Coffey  v.  Norwood,  264. 
Coffin  v.  Day,  390. 

v.  Douglass,  564,  607. 
Cofiin  v.  Kelling,  551. 
Cogburn  v.  Pollock,  332. 
Coghlan  v.  South  Carolina   R.  R.  Co., 

123. 
Cohen  v.  Knox,  382,  530. 

v.  Meyers,  103,  332. 

v.  N.  Y.  Mutual   Life  Ins.   Co., 
166. 

v.  Wolff,  217. 
Cohn,  Matter  of,  233,  591,  593. 
Cohn  v.  Goldman,  273. 

v.  Ward,  394,  592,  612. 
Coiron  v.  Millaudon,  343,  346. 
Colbern  v.  Robinson,  425. 
Colby  v.  Peabody,  69. 
Cole  v.  Malcolm,  349. 

v.  McGlathry,  285. 

v.  Millerton   Iron  Co.,   237,  268, 
359,  416,  616. 

v.   Tyler,    18,    161,  192,   313,  314, 

317,  335- 

v.  Varner,  194. 

v.  White,  445,  456,  457. 

?•.  Yancey,  407. 
Coleman,  In  re,  646. 

v.   Burr,    13,    16,    18,  19,   23,  355, 
369.  377,  392,  568,  584,  695. 
Coley  v.  Coley,  392,  407,  434. 
Colgan  v.  Jones,  341. 
Colie  v.  Jamison,  230. 
Collier  v.  Davis,  570. 

v.  Hanna,  363,  389. 
Collingridge  v.  Paxton,  60. 
Collingsworth  v.  Bell,  618'. 
Collins,  In  re,  143.  229. 

v.  Carlile,  391. 


Collins  v.  Myers,  451,  619, 

v.  Nel 

r.  Shaffer,  132. 

v.  Taggart,  468. 

v.  Thompson,  303. 
Collinson    v.    Jackson,    146,    254,    295, 

316,  387,  476. 
Collumb  v.  Read,  62,  321,  666. 
Colman  ~\  Dixon 
Colombine  v.  Penhall,  536,  537. 
Columbia  Bank  71.   facobs,  424. 
Columbus     Watch    Co.    v.    Hodenpyl, 

147.   '5".  47"- 
Combs  r.  Watson,  164. 
Comegys  v.  X'asse,  230. 
Comer  v.  Allen,  382. 
Comey  v.  Pickering,  666. 
Comly  7'.  Kisher,  465. 
Commercial  Bank  v.  Meach,  150. 
Commercial    Nat.    Bank    v.    Nebraska 

State  Bank,  54S. 
Commonwealth  v.  Duffield,  76,  6O4. 

v.  Evans,  367. 
Commonwealth     Ins.     &     T.     Co.    v. 

Brown,  525. 
Comstock  v.  Rayford,  42S,  433. 
Comyns  ?\  Riker,  719. 
Conard  v.  Adriatic  Ins.  Co.,  391. 
Conde  v.  Hall,  340. 
Cone  v.  Cross,  340. 

7'.  Hamilton,  126. 
Confer  v.  McNeal,  497. 
Conger  v.  Lowe,  644. 
Conkling  v.  Shelley,  630. 
Conly  v.  Priedman,  458. 
Connah  v.  Sedgwick,  593. 
Conn.    Mut.    L.    I.   Co.   t.   Smith.   414, 

432,  515,  692. 
Conover  v.  Beckett,  4S1. 
Conro   v.    Port    Henry    Iron   Co.,   130, 

217,  220. 
Conrou'  7'.  Little,  547. 
Consolidated  T.  L.  Co.  v.  Kansas  City 

Varnish  Co.,  167. 
Constable  v.  Hardenbergh,  307,  610. 
Constant   t\    University   of    Rochester, 

12,  357- 
Continental  Trust  Co.  v.  Wetmore,  86. 
Converse  7'.  Hartley,  210. 

v.  Sickles    S4,  561. 
Conway,  Ex  parte,  7,  9,  615. 

v.  Edwards,  452,  466. 
Cook  v.  Bennett,  619. 

7'.  Holbrook,  538. 

v.  Hopper,  474. 

v.  Johnson,  in,  181,  187. 

v.  Ligon,  185. 

7'.   Lindsey.  284. 

7'.  Lowry,  85. 

7'.  Mason,  4S7. 

v.  Moffat,   516. 

v.  Scott,  93. 

7'.  Swan,   133. 

7'.  Tibbals,  271,  279. 


XXIV 


] 'ABLE    I  '1      CASES.        [are  towages. 


: .  Tullis,  S  "• 

221,  357,  47". 

I  lenek) . 

\  in.  361,  4'".  ' 
: 
I  >avison,  413, 
( ialbraith,  12. 
i  .urn.  73. 
t .  Lee,  513. 
.  Reynolds,  475. 
.  Wyatt 

Coope 

.  Middle  ton,  11.  too,  258,  3S0. 
C <  > r !  > i  1 1  : .  Cutcheon, 
Bean,  1  13. 
I  et  1  .  Williams.  244. 

er,  41 16. 
C    rev  [( 18. 

Curl-.-;;  :.  Radcliffe,  42.  417,  419. 
Cornell,    Matter  yj,   553,  561, 

588. 
v.   R.ulway.    6,    97,  176,    255,  264, 

Corning  v.  Fowler,  60. 

- .  McCullough,  269. 
v.  White,  1  j  1.  [48,  709. 
Cornish  v.  I  >ew  - 
Cornwell  v.  Lee, 

Cortland  Co.  v.  Herkimer  Co.,  496. 
Cosby  v.  Ferguson,  6 

•   v.  Mayor,  etc.,  Si, 
Cottingham,  Succession  of,  31. 

n  v.  Hart, 
Cottrell  v.  Moody,  103. 
rell's  Appeal.  348. 
Coulter  v.  Lumpkin. 

nty  of  Morgan  v.  Allen.  131. 
iv  of  Warren  v.  Man  y,  H)-. 
Coursey  v.  Morton,    1  |2,   553 

=  74-   ''"■)■  6l  1. 
Courienay  v.  Wright,  542. 

I    ilumbia   Powder  M  fg.  (  o., 

Coutts  v.  Acworth,  77. 
nhovan  v.  1  Ian.  27. 
:  wick,  72. 
ell,  7. 
Cowell  v.  Spring 

Cowling  7 .  689. 

'  401. 

Einspahr,  499. 

1  ley.  426, 
Gruv<  1 .  96,  07. 
7.  Miller, 
P 

~  h  ropshire,  94. 
Wilder,  31 .  92,  545. 

v.  W 

.-     Wile  nx,   10^,  289. 
I  Kadli 

I  mil  hael,  168. 


Craig  v.  Fowler,  402. 

7.  Hone,  661. 
( Iraig's  Appeal,  469. 

("ram   :.   .Mitchell,   551,  592,  593. 
Cramer  v.  Bloi  id,  320. 

v.  Reford,  203,  530. 
Crandall  v.  Brown,  457,  632. 

7.  Lincoln,  131,  237. 
Crane  7'.  Bunnell,  113. 

7  .  Stickles,  381. 
Cranson  v.  Smith,  125. 
Cranstown  7'.  Johnston,  304. 
Crapo  v.  Kelly.  615. 
Crapster  v.  Williams,  433. 
Crary  v.  Goodman,  31. 
Craven  v.  Brady,  647. 
Craver  v.  Miller,  415. 
Crawford  v.  Andrews,  483. 

v.  Beard,  340. 

7.  Berry,  484. 

v.  Davis,  446. 

v.   Kirksey,    7,    9,    187,    293,   304, 
367,  416,  426,   430,  448,  451, 

703. 

7'.  Lehr,  224,  717. 

v.  Logan,  20S,  537. 

-•.  Lundy,  640. 

7 .  N'eal,  462,  480. 

7'.  Ross,  338. 
Credland  v.  Potter,  31. 
Cresswel!  ?\  McCaig,  387. 
Cribb  7'.  Morse,  3S9. 
Crim  7'.  Kessing,  476. 

v.  Walker,  140,  153,  154. 
Crippen  v.  Hudson,  14S,  149,  150,  157, 

171,  177.  271. 
Crocker  v.  Bellangee,  736. 

v.  Craig,  22S. 
Crockett  7'.  Phinney,  341. 
Croft  v.  Arthur,  536. 

v.  Townsend,  4. 
Crompion  v.  Anthony,  141.  166. 
Crook  <'.  Jadis,  6S7. 

7'.    Rindskopf,    8,    47,    3S9,    500, 
562,  605,  606,  609. 
Crooke  ?:  County  of  Kings,  77,  7S,  663. 
Crooks  7.  Stuart,  445. 
Cropsey  v.  McKinney,  140. 
Crosby  7'.  Baker,  94. 

v.  Hillyer,  554. 

v.  Taylor,  350. 
Cross  7'.  Brown,  224,  227. 

:•.  Truesdale,  81. 
Crouse    ~-.    Frothingham,   66,   67,   225 

229,  232,  318,  4S0. 
Crow   .     Andrew  s,  9, 

7'.  Beardsley,  24,  26. 

7'.  Coons,  517. 

v.  Red  River  Co.  Bank.  630. 
Crowinshield  t.  Kittridge,  707,  722. 
Crumbaugh  v,  Kugler,  437. 
Crummen  v.  Bennet,  31,  90. 
Cubbedge  v.  Adams,  100. 
Cumming  7\  Fryer,  46. 


References']        TABLE    OF    CASES.        [are  i 


Cumming  v.  Mayor  of  Brooklyn,  328. 
Cummings  v.  McCullough,  374. 
Cummins  v.  Griggs,  454. 

-',  Hurlbutt,  13. 
Cunningham  v.  Dwyer,  7,  395. 

v.    Freeborn,    23,    30S,   369,    568 
584,  616. 

v.  Norton,  19,  348,  485. 
Curd  v.  Lackland,  105. 
Curran  v.  Olmstead,  273. 
Currie  v.  Hart,  592. 

v.  Misa,  373. 
Currier  v.  Sutherland,  31,  93. 
Curry  v.  Lloyd,  114, 

v.  McCauley,  421. 
Curtain  v.  Talley,  577. 
Curtin  v.  Isaacsen,  448,  451. 
Curtis  v.  Fox,  192,  328, 

v.  Leavitt,  37,  205,  278,  359,  4S2, 
576. 

v.  Moore,  497. 

v.  Valiton,  357. 

v.  Wortsman,  526. 
Cushwa  v.  Cushwa,  726    734. 
Cutcheon  v.  Corbitt,  321. 
Cutler  v.  Tuttle,  720. 
Cutter  v.  Copeland,  457,  459. 

v.  Griswold,  108. 

v.  Hume,  601,  612,  704. 

v.  Pollock,  703. 
Cutting,  Ex  parte,  476. 

v.   Cutting,    76,   77,  85,   650,  663, 
742. 

v.  Jackson,  449. 
Cuyler  v.  Ensworth,  223. 

v.  McCartney,  490,  495,  496,  557, 
564,  591- 

Daggett  B.  &  H.  Co.  v.  Bulfer,  392. 
Dahlman  v.  Jacobs,  140. 
Dale  v.  Roosevelt,  738. 
Dalglish  v.  McCarthy,  365. 
Dalpay,  Matter  of,  123. 
Dalton  v.  Currier,  600. 

v.  Stiles,  708. 
Damon  v.  Bryant,  520. 
Dana  v.  Haskell,  177. 
Danbury  v.  Robinson,  667. 
Danby  v.  Sharp,  431,  439,  486. 
Dance  v.  Seaman,  25. 
Danforth  v.  Beattie,  31, 

v.  Dart,  674,  687. 
Daniel  v.  Vaccaro,  8. 
Daniels  v.  Eldredge,  655. 

v.  McGinnis,  495. 
Danjean  v.  Blacketer,  428. 
Dannmeyer  v.  Coleman,  694. 
Danzey  v.  Smith,  227. 
Darby  v.  Gilligan,  389. 
Dargan  v  Waring,  in,  176. 
Darling  v.  Rogers,  19,  610. 
Darvill  v.  Terry,  365. 
Daugherty  v.  Daugherty,  410. 
Davenport  v.  Cummings,  26. 


Davenport  r\  Foulke,  619. 

v.  Kelly,  11?.  . 

v.  Wright,  4'>; 
David  7'.  Birchard,  688,  692,  706. 
Davidson  r.  Burke,  129,  381. 

v.  Graves,  384,  536. 

?'.  Jones,  395. 

7'.  Little,  415. 
Davis  v.  Bigler,  444,  453,  462. 

v.  Bonney,  708. 

7'.  Briggs,  391. 

v.  Bruns,  153. 

v.  Clayton,  304. 

v.  Cornue,  475. 

v.  Davis,  543. 

v.  Dean,  153. 

v.  Fredericks,  532. 

v.  Garrison,  357. 

v.  Getchell,  414. 

v.  Graves,  320    725. 

v.  Howard,  3S7,  604. 

v.  Leopold,  321,  340,  342,  707. 

v.  McKinney,  107,  187. 

v.  Ransom,  619. 

v.  Schwartz.  49,  52,  375,  402, 
406,  417,  425,  435,  443,  593, 
740. 

7'.  Sharron,  67. 

v.  Stern,  489. 

v.  Swanson,  223,  717,  724. 

v.  Turner,  37,  443,  445,  440,  449, 

451,  455,  456,  459- 
Davis  S.  M.  Co.  v.  Dunbar,  405. 
Davy  v.  Garrett,  275. 
Dawes  v.  Cope,  453. 
Dawley  v.  Brown,  32,  138,  317. 
Dawson  v.  Coffey,  140. 

v.  Xiver,  414. 
Day  v.  Cole,  416. 

v.  Cooley,  51,  194,  196,  198,  209, 
229,  231. 

v.  Goodbar,  418,  421. 

v.  Washburn,  710. 
Dayton  v.  Borst,  237,  240. 
Dean,  Matter  of,  561,  588. 

v.  Negley,  29,  3S6. 

v.  Skinner,  4S0. 
De  Armond  v.  De  Armond,  543. 
De  Berry  v.  Wheeler,  523. 
De  Camp  v.  Alward,  615. 

v.  Dempsey,  661. 
Decker  v.  Decker,  107,  146,  147. 
Deering  v.  Tucker,  640. 

v.  Washburn,  454. 
Deerfield  v.  Nims,  253. 
De  Farges  v.  Ryland,  394.  504,  537,  538. 
De  Forest  v.  Bacon, 
Degnan  7p.  Farr,  524. 
Degraw  z.  Clason,  87. 
Dehorty  v.  Jones,  640. 
Deitrich  7\  Hutchinson,  704. 
Delany  v.  Mansfield,  336. 
Delashmut  v.  Trau,  92. 
Delaware  v.  Ensign,  415,  417,  632. 


XXVI 


TABLE     Ol      CASES.        [are  to  fiages. 


v.  Hyland,      - 
De  M  '90. 

Demarest  v.  H 

rerhune,  434.  4; 
1 1  meritt  v.  Mi 
Dempscy  r.  Gardner,  440.   . 
Denike  v    N.   V.   R.   Lime  Ov:  C.  Co., 

.. 
Denman  v.  Campbell,  4^3. 
Dennick  v.  Railroad  Co.,  269. 
Deni    si    Arnold,  1 27. 
Denn 
Denny  r .  Bennett,  ig    -  - 

more  v.  Tomer,  13,  452. 
Dent  .  k>,    7 i<>.  -17. 

-4- 
Denton  : .  Ontario  Co,  Nat.  Hank.  557. 
Department  of  Parks.  .Matter  of,  32. 
De  P  641. 

Nat,  Hank  v.  Wickham,  70S. 
v.  Weyrich,  90,  02,  574. 
De  Ruyter  1 .  St.  Peter's  Church,  615. 
Des  I  Irisaj  v.  1  logan,  145. 

:  .   Wood     :4'- 

Des  Moines  ec  M.  R.  Co.  v.  Alley.  279. 
Detroit,     etc..     Rolling    Mills    v,    Led- 

widge,  140. 
Deutsch  v.  Reilly,  160. 
Devoe  v.  Brand: 
Devol  v.  Mcintosh,  Bi,  82. 
1 1       11  v.  Brownell,  309. 
Devonshire  v.  Gauthreaux,  451. 
De  Votie  v.  McGerr,  301,  534. 
De  Walt  v.  Doran,  495. 
Dewey  v.  K  el  ton,  B3. 

v.  Long,  107. 

V.  Mover.  140,  195,  215,21s,  229, 

495- 
ng  v.  Durant,  127. 

De  Witt  v.  Van  Sickle,  6S0,  689,  692. 
De    Wolf  v.   Sprague    Mfg.    Co.,    2SS, 

291.  z':l-  58l,  ;-7- 
Dexter  v.  McAfee,  7.  to,  274. 

v.  Smith. 
Dick  v.  Hamilton,  61,  200,  301. 

:■.   Lindsay.  47' », 

v.  Piti  hford,  64,  657,  659. 
Dicki •: 51  m    .  Benham,  '104. 

.    I  illinghast,  671 . 
Dickinson  r.  Hankers'  Loan,  etc.,  Co., 

273.  =74- 
v.  Burrell,  247. 
cson  v.  McLarney,  419. 
Diefei   .■  >rf  v.  Spraker,  214. 
1,  60. 

r,  93. 

7i  534- 
Dillman  v.  Nadelhoffer,  172,  176,  527. 
I  >      in  v.  Anderson,  370. 
Dilworth  v.  Curts,  323. 
Dimmoi  k  v.  Bixby.  i"i.  . 
Dimoi  1  '      .  ?i8. 

Dimon       1 1 

v.  Hazard  .    589. 


Ditman  v.  Raule,  193,  197,  453. 
Divver  v.  McLaughlin,  407. 
Dix  v.  Briggs,  150. 

.- .  Van  Wyck,  247. 
Dixon  7:  Hill,  61  : 
Doak  v.  Brubaker,  4f2,  464,  465. 
Dobson  v.  Pearcc,  471 

V.   Snider.  406,  418,  420,  421. 
Dockray  v.  Mason,  in,  255,  264. 
Dodd  v.  Adams,  63. 

v.  Gaines,  6SS. 

v.  Levy,  140,  143,  16S. 

v.  McCraw,  36s.  437. 
Dodge    v.    Freedman's    Saw    &    Trust 
Co.,  490,  733. 

v.  Goodell,  495. 

v.  Griswold,  160. 

v.    Pyrolusite    Manganese    Co., 
332. 

V.  Wellman,  423. 
Doe  (if.  Grimsby)  v.  Ball,  229. 

(</.  Abbott)  v.  Hurd,  717. 

(d.  Mclntyre)  v.  Mclniyre,  640. 

\d.  Davis)  v.  McKinney,  107,  187. 

v.  Routledge,  380. 

(</.  Bland)  v.  Smith,  520. 

v.  West,  469. 
Doebler's  Appeal,  640. 
Doerfler  v.  Schmidt,  272. 
Doherty  v.  Holliday,  217,  709. 
Dolin  r'.  Gardner,  394. 
Dollard  v.  Taylor,  116,  331. 
Dominguez  v.  Dominguez,  507. 
Donalds  v.  Plumb,  659. 
Donaldson  v.  Farwell,  104,  230. 
Donley  v.  McKiernan,  270,  474. 
Donnebaum  v.  Tinsley,  376. 
Donnelly  v.  West,  236. 
Donovan   t.  Dunning,  25,  33,  104,  259, 

634. 
v.  Finn,  41,  68. 
Doran  v.  Simpson,  156. 
Dorr  v.  Beck,  416,  666. 
Dorsett  ?•.  Dorsett,  647. 
Dorsey  :■.  Smithson,  232. 
Dorsev  Machine  Co.  v.  McCaffrey,  285, 

286. 
Dortic  z'.  Dugas,  100. 
1  (osi  In-  v.  Nette,  199. 
Doucet  v.  Richardson,  449. 
Dougherty  v.  Cooper,  482,  667. 
Doughten  v.  Gray,  415. 
Doughty  v.  Miller,  717. 
Douglass,  In  >-,-.  390. 

v.  Huston,   709. 
Douglass    Merch.   Co.  v.    Laird,    402, 

612. 
I kmthitt  v.  Appelgate,  415. 
Douw  v.  Shelden,  55. 
Dow   v.   Berry,  (14. 

-.-.  Platner,  62,  573,  574. 
Dowel!  v.  Appelgate,  393. 
I  (owner  v.  Rowell,  311. 
Downs  v.  Kissam,  425. 


References]       TABLE    OF    CASKS.       [are  to  pages. 


XXV11 


Dows  v.  McMichael,  227. 
Doyle  v..  Peckham,  231. 
Dozier  v.  Matson.  519. 
Drake  v.  Paulhamus,  704. 

7'.    Rice   40,   43,   51,    58,   67,  106, 
122. 
Dresher  v.  Corson,  412. 
Dreutzer  v.  Bell,  31,  88. 
Drexel  v.  Berney,  24S. 
Drexler  v.  Tyrrell,  712. 
Dreyfuss  v.  Seale,  475. 
Dringer  v.  Receiver  of  Erie  Ry.,  9. 
Drinkwater  v.  Drinkwater,  722. 
Drucker  v.  Wellhouse,  5S9. 
Drummond  v.  Commissioners,  132. 

v.  Couse,  357. 
Drury  v.  Cross,  346. 

v.  Roberts,  338. 

v.  Wilson,  703. 
Drysdale  v.  Piggott,  542. 
Dubois  v.  Cassidy,  115. 
Dudley     v.    Congregation,     etc.,     St. 
Francis,  293. 

v.  Danforth,  359,  365,  557. 

v.  Dudley,  544. 
Duffin  v.  Furness,  40. 
Dugan  v.  Massey,  545. 

v.  Trisler,  183. 

v.  Vattier,  232. 
Dull  v.  Merrill,  88. 

Dummer   v.   Corporation   of  Chippen- 
ham, 305. 
Duncan  v.  Custard,  316. 

v.  Roselle,  539. 
Duncan's  Appeal,  544. 
Dundas  v.  Bowler,  135. 

v.  Dutens,  67. 
Dunham  v.  Byrnes,  234. 

v.  Cox,  271. 

v.  Griswold,  354. 

v.  Waterman,  21,    319,    548,    568, 
580,  583,  584,  631. 
Dunlap  v.  Bournonville,  434. 

v.   Hawkins,    189,    191,    208,  376, 

377- 
Dunlevy   v.   Tallmadge,    III,    141,  142, 

148,  149,  159,  172. 
Dunn  7\  Chambers,  310 
v.  Dunn,  190. 
v.  Whalen,  725. 
Dunning  v.  Mead,  619. 
Dunphy    v.   Kleinsmith,  99,    326,    328, 

405. 
Dupuy  v.  Gibson,  219. 
Durand  v.  Hankerson,  262. 
Durant  r.  Pierson,  563. 
Duress  v.  Horneffer,  529. 
Durian  v.  Central  Verein,  56,  542. 
Dutcher  v.  Swartwood,  632,  633. 
Dutchess    Co.    Mut.    Ins.    Co.    v.    Van 

Wagonen,  554,  602,  613. 
Duttera  v.  Babylon,  526. 
Dutton  t.  Jackson,  242. 
Duvall  v.  Rollins,  92. 


Dwight   v.   Germania   Life    Ins.   Co., 

306. 
Dyer  v.  1  lomer,  717,  722. 

v.  Tayloi . 
Dygert    v.     Remerschnider,    186,    192, 

194,  377,  37'J.  383,  537,  54i. 

Eadie  v.  Slimmon,  56. 
Fads  v.  Mason,  324. 

v.  Thompson,  542, 
Eagle  Fire  Co.  v.  Lent,  642. 
Eames  v.  Dorsett,  193. 
Earl  of  Chesterfield  r.  Janssen,  28,  98. 
Early  v.  Owens,  1S7. 
Earnshaw  t\  Stewart,  426. 
Easterly  r.  Keney,  653,  654,  659. 
Eastlake  v.  Jordan,  660. 
Easton    Xat.    Bank    v.    Buffalo  Chem. 

Works,  271. 
Eastwood  ?'.  Brown,  446. 
Kasum  7'.  Pirtle,  415. 
Eaton  ?'.  Perry,  736. 
Ecker  v.  Lafferty,  211. 

7r.  McCallister,  371. 
Eckman  7:.  Munnerl)-n,  620. 
Eddy  7'.  Baldwin,  482. 
Ede  v.  Knowles,  59,  195. 
Edelsten  v.  Yick.  73. 
Edgell  v.  Hart,  369,  472,  619,  621,  622, 
623. 
7'.  Haywood,  129. 
Edgerly  v.  First  Xat.  Bank,  419. 
Edgington's  Trusts,  .AV,  647. 
Edmeston  v.  Lyde,  51,  58,  67,  130,  148, 

217,  251. 
Edmonson  7'.  Meacham,  31. 
Edmonston  v.  McLoud,  115,  708. 
Edmunds  v.  Mister,  i2>,  474. 
Edson  7'.  Cumings,  146. 

v.  Hayden,  539. 
Edwards  v.  Currier,  368,  371. 

7'.  Dickson,  452. 

v.  Entwisle,  61,  209,  539,  540. 

v.  Harben,  446,  619. 

v.  McGee,  184,  213. 

v.  Mitchell,  555. 

7'.  Reid,  94,  367. 

7'.  Stinson,  34. 
Egbert  v.  Baker,  551. 
Egerv    v.   Johnson,    6,   637,    665,   667. 

6m. 
Ehrisman  ?•.  Roberts.  20,  574. 
Eicks  v.  Copeland,  50 r. 
Eigleberger  7r.  Kibler,  1S8,  507. 
Eilers  v.  Conradt,  <;4. 
Eisner  v.  Heilman,  719. 
Eldria^e  7'.  Phillipson,  7"4. 
Elias  7\  Farley,  66,  574. 
Eliot  7'.  Merchants'  Exchange,  70,  71. 
Elizabethtown     Saw     Inst.    ■<■.    Gcrber, 

142. 
Ellett  ?'.  Newman,  331. 
Ellington  7\  Currie,  720. 
Elliott  7'.  Bently.  529,  539. 


X  X  V 1 1 1 


<*]        TABLE     OF    CASES.        [are  to  pages. 


tt  :•.  Pontius.  21?. 
Stoddard,  . 
Elliott's  Ex'rs'  Appeal,  541. 
Ellis  :•.  1  [iggins,  717. 

: .  1  [orrman,  674. 

. .  McHenry,  51  8. 
Valentine,  [9. 
Whitlock,  46. 
Ellison    i     Most  - 
Ellsworth   -.  Cook,  66. 

:     Phelps,  630. 
Elme       Da  <  247. 

Elmendorf  v.  Taylor,  512,  516. 
Elmer  v.  Welch.  4:.; 
Elmon        -      ir,  216. 
El  well  v.  Johnson.  270. 
Ely       '  609. 

Emans  - .  Emans,  219. 
Embry  :.   Palmer,  154,  511. 
Embury  v.  Klemm,  436. 
Emerson  v.  Badger,  71. 

v.  Bemis,  24.  1-7,  540. 

v.  Opp,  t88,  5 19. 

v.  Senter,  558,  563.  579.  5§o. 
Emery  v.  Van  Syckel,  647. 

v.  Vount,  272. 
Emigrant    Ind.    Sav.    Hank    v.    Roche, 

,.  ??4,  uoS. 
Emma  Silver  Min.  Co.  v.  Grant,  iS. 
Emmerich  v.  Hefferan,  377. 
Emmons  v.  Barton,  226. 

Bradley,  424. 
Emonds  v.  Termehr,  414. 
Enders  v.  Swayne,  41  •'> 
England  t'.  Adams,  104. 

v.  I  )•  iwns,  544. 

v.  Russell,  137,  139. 
English  v.  Friedman,  565. 
Engraham  v.  Pate,  30,  400.  435,  436,  497. 

.  'Tuttle,  493. 
Erb  v.  Cole,  7 

v.  West,  387,  562. 
Erdall  v.  Atwood,  234.  4-  = 
Erfort  v.  Consalus,  267,  501. 
Erickson  v.  Paterson,  63. 

linn,  12?,  285,  2S6,  315,  513. 
Frn^t  v.  Shinkle, 
Estabrook  v.  Messersmith,  231. 
1  ,  254,  316. 

Guntei    565,  593,  610, 

r  .    I  lowland,    223,   224- 

v.  Wil(  ox,  in.  i  -  i.  [55,  1 56,  [65, 
171.   1  77 
:<  k  v.  Caillaud,  23,  :    . 
mg,  14^1. 
Ether;  sperry,    472 

Ettlinger  1 .  Kahn,  5 
I  Bolles,  185. 

Bicknell, 
r .  I  [amilton, 

v.  Hill,   140,  [65,  17'.. 
v.  Tones,  \  1 2 

•  .   1  •  -44- 


Evans  v.  Rugee,  539. 

v.  Wall,  660. 

v.  Warner,  604. 
Evans  Co.  v.  Reeves,  689. 
Everett  v.  Raby,  166. 
Everingham  v.  Vanderbilt,  318. 
Everitt  v.  Everitt,  77. 
Every  v.  Edgerton,  46S. 
Ewing  v.  Handley,  224. 

v.  Runkle,  357. 
Exchange  Bank  of  St.  L.  v.  Rice,  82. 
Eyre  v.  Potter,  294,  330. 
Eyston,  Ex  parte,  647. 

Failey  v.  Stockvvell,  591. 
Fairbanks  v.  Antrim,  47. 
Fairchild  v.  Lynch,  569. 
Fairfield  v.  Baldwin,  409. 
^Fairfield  Bridge  Co.  v.  Nye,  449. 
Fairfield     Packing    Co.     v.     Kentucky 

Jeans  Clothing  Co.,  594. 
Falconer  v.  Freeman,  160,  175. 
Falk  v.  Janes,  239. 
Falkner  v.  Leith,  394. 
Fanshawe  v.  Lane,  579. 
Fargo  v.  Ladd,  724. 
Farley  v.  Carpenter,  675,  676,  678,  680. 

v.  Kittson,  302,  303. 
Farlin  r\  Sook,  324. 
Farmer  v.  Calvert,  13. 

v.  Walter,  354. 
Farmers'   Bank  v.  Douglass,  375,  635, 

690. 
Farmers'  &  M.  Nat.  Hank  v.  King,  -3. 
Farmers'  &  M.Sav.  Bank  v.  Brewer, 659. 
Famed  v.  Harris,  153,  172. 
Farnham  v.  Campbell,  62. 
Farnsworth  v.  Bell,  244. 

v.  Strasler,  149. 

7 .  Wood,  238. 
Farrar  v.  Bernheim,  716,  719,  724. 

v.  Haselden,  169. 
Farrington  v.  Stone,  435. 
Farrow  v.  1  laves,  20,  569,  608. 
Earwell  v.  C(jhen,  550,  608. 

v.  Furniss,  604. 

7'.  Xilsson,  594,  596. 
Fassit  v.  Phillips,  55. 
Faulkner  z\  Hyman,  614. 
Faxon  v.  Ball,  307. 
Fay  7.  (Irant,  574,  610. 
Fearn  7'.  Ward,  181. 
Fecheimer  v.  Baum,  104. 

7'.  Hollander,   170. 

7'.  Robertson,  548. 
Feigley  "•.  Feigley,  n,  222,  244. 
Fein  v.  l"<in,  244. 

.  Randall,  712. 
Felch  7'.  Bugbee,  517. 
Felix  v.  Patrick,  2S3. 
Fell  V.  Brown,  250. 
Fellows  7'.  Emperor,  386. 

V.  Fellows,  16,  251,  260,  290. 

v.  Lewis,  31. 


References']       TABLE    OF    CASES.        [are  to  f  ages. 


Fellows  v.  Smith,  187,  188. 
Felton  v.  Wadsworth,  409. 
Fenelon  v.  Hogoboom,  529. 
Fenner  v.  Dickey,  28,  711. 
Fera  v.  Wickham,  562. 
Ferbrache  v.  Martin,  474,  486. 
Ferguson  v.  Bobo,  140,  270. 

v.  Dent,  136. 

v.  Hillman,  322,  324,  669. 

v.  Kumler,  92. 

v.  Spear,  523,  703. 
Ferris  v.  Irons,  497. 

v.  McQueen,  405,  406. 
Fessenden  v.  Woods,  235. 
Fetter  v.  Cirode,  408. 
Feurt  v.  Rowell,  618. 
Fick  v.  Mulholland,  13. 
Fidelity  Ins.,T.  &  S.  D.  Co.   v.  Hunt- 
ington, 260,  521. 
Fidler  v.  John,  613. 
Fiedler  v.  Darrin,  269,  505. 
Field  v.  Andrada,  227. 

v.  Chapman,  102. 

v.  Hastings  &  B.  Co.,  2S1. 

v.  Holland,  304. 

v.  Holzman,  332. 

v.  Ridgely,  421. 

v.  Sands,  235,  709. 
Fifield  v.  Gaston,  357. 
Filebeck  v.  Bean,  624. 
Filer    v.    N.     Y.    Central    R.    R.    Co., 

392- 
Filley  v.  Register,  437. 
Finch  v.  Houghton,  336. 
Fincke  v.  Funke,  236. 
Finding  v.  Hartman,  454. 
Findlay  7'.  McAllister,  101,  117,  121. 
Fink  v.  Denny,  194. 

v.  Jetter,  308. 

v.  Patterson,  167. 
Finn  v.  Krut,  91. 
Finnin  v.  Malloy,  89. 
First  Mass.  Turnp.  Co.  v.  Field,  514. 
First  Nat.  Bank  ?•.  Anderson,  634. 

v.  Bertschy,  341,  362. 

v.  Buck,  484. 

v.  Chalmers,  81. 

v.  Cooper,  229. 

v.  Cummins,  347,  350. 

v.  Dwelley,  95. 

v.  E.    T.    Barnum   Wire  &   Iron 
Works,  336,  33S. 

-'.  Gage,   332. 

v.  Hamilton,  357,  530. 

v.  Holmes,  592. 

v.  Hosmer,  128,  295. 

v.  Hughes,  598. 

v.  Irons,  10. 

v.  Jaffray,  423. 

v.  Kansas  City  Lime  Co.,  480. 

v.  Kavanagh,  523. 

v.  Knowles,  430. 

v.  Lowrey,  501. 

v.  Moffatt,  435. 


First    Xat.    Bank   :■.  Schuk-r,   129,  [48, 
249,  253,  256,  261. 

v.  Sloman,   154. 

v.  Smith,  435. 

7-.  Wittich,  620. 

v.  Wood,  413. 
Fish  v.  Clifford,  450. 
Fish    Bros.     Wagon    Co.    v.    La    Belle 

Wagon  Works,  72. 
Fishel  v.  Ireland,  417. 
Fisher,  Ex  parte,  714. 

v.  Andrews,  144. 

v.  Bassett,  248. 

v.  Bishop,  730. 

v.  Boody,  329. 

v.  Henderson,  33,  634. 

v,  Herron,  435. 

v.  Lewis,  204. 

v.  Moog,  435,  47S. 

v.  Shelver,  415,  435,  527. 

7\  Taylor,  6^0,  662. 

v.  Tulter,  286. 
Fiske  7\  Foster,  517. 
Fitch  v.  Burk,  466. 

v.  Smith,  298. 
Fitzburgh  v.  Everingham,  331. 
Fitzgerald  v.  Quann,  46. 
Flack  v.  State  of  X.  Y.,  126. 
Flagg  v.  Mann,  303,  674. 

v.  Wellington,  501, 
Flamank,  //.•  re,  536. 
Flanagan  r.  Wood,  464. 
Flannery  v.  Van  Tassel,  4S7,  4S9,  490. 
Flash  v.  Conn,  26S,  269. 

v.  Wilkerson,  220,  349. 
Fleischer  v.  Dignon,  434. 
Fleming  v.  Buchanan,  76. 

v.  Grafton,  139,   142. 

v.  Slocum,  10. 

v.  Yost,  480. 
Flemington  Xat.  Bank  7\  Jones,  358. 
Fletcher  r.  Ashley,  544. 

v.  Bonnet,  451. 

v.  Fletcher,  726,  728. 

r.  Holmes,   140,  155,  229. 

v.  Martin,  312,  630. 

v.  Peck,  668. 

v.  Powers,  626. 
Flewellen  v.  Crane,  274. 
Fliess  v.  Buckley,  121. 
Flint  7\  Clinton  County,  615. 
Florence  S.  M.  Co.   v.  Zeiijler,  34,  366. 
Flournoy  v.  Johnson,  660. 
Flower  t\  Cornish,  231. 
Flynn  7\   Jackson,  534. 
Focke  v.  Blum,  577. 
Fogg  v.  Blair,  131,  237,  23S,  240,  268. 

v.  Lawry,  125. 
Foley  v.  Bitter,  109,  133,  361. 

v.  Burnell,  64. 
Follansbee  v.  Follansbee,  545. 
Folsom  v.  Clemence,  418,  419, 
Fonda  v.  Gross,  470. 
Foote  v.  Cobb,  187. 


XXX 


,]       TABLE    OF    (ASKS.       \aretofage*. 


Fort" 

i .  I  [owe,  714. 

erby,  :m. 
nell,  433. 

:.  Walu-r.  173,  371,  557,  55S. 
I  .  Brown, 

Ford  v.  Chambers,  467. 
52. 

: .  1  Ian  ington,  729. 

: .  1  [ennessy,  j 

1 .  Johnston,  51,  183,  194,  416. 

v.  Williams  .631. 

Forde  :.  Exempt  Fire  Co..  224. 
Fordyce  t .  Hicks,  709. 
:ner  v.  Stuart,  449. 
Forrest*  r  1 .  M< 

F<.rsyth  v.  Matthews,  454.  435. 
Former  v.  Whelan,  7. 
Fort    Payne    Bank    v.   Alabama   Sani- 
tarium, 241,  ( 

Stanwix    Hank    v.    Leggett,    229, 
261,  262,  553. 

k  ?■.  Delaneld,  24^. 
Foster  v.  Brown,  7. 

v.  1  [83,  187,  222,  346. 

v.  Hackley,  22 

v.  1  [all,  357.  490. 

r  .  Know  fes,  413. 

v.  McGregor,  31,  SS. 

v.  Mansfield,   C.  &   K.   M.   R.  R. 
Co.,  507,  508. 

-     Saco  Mfg.  Co.,  581. 

v.  Smith.  640. 

v.    \  <  iwnshend,  236. 

v.  Wallace,  454. 

v.  Woodfin,  23,  407. 
Fouche  v.  Brower,  1. 
Fourth  Xat.  Bank  r-.  Stout,  740. 
Fowler  v.   Frisbie,  1S3. 

v.   Icnkim 

i  .  McCartney,  III. 

v.  Tr<  /.  133. 

Fowler's  Appeal,  113,  155,  226,  333. 

.  Curtis,  336,  563. 

7'.  1M  wards,   1  - 

7  .   I  lills,  38,  51,  244,  24;. 

-■■    Moj  1  ■     1 28,     142,    155,    177, 
1;-.   1 91,  253.  254,  265,  534. 
7.  Peck,  • 
7'.  Wallace,  151. 
Frakes  v.  Brown,  244. 
Fram  i-  7.  I  140,   162,  206,207. 

Page    . 
v.  Rankin 
I  lirre,  717. 

7.  Ryan.  I 
Francklyn  -.  .  Fern,  229. 
Franey  v.  Smith 
Frank  7 .  Bobbitt,  124,  551. 
sler,  17". 

v.  King,  526,  527. 

7.  Mutual  K.   I 

v.  Robinson,  610. 


Frank's  Appeal,  362. 
Frankhouser  v.  Ellett,  626. 
Franzen  v.  Zimmer,  (115. 
Fraser  v.  Charleston,  265. 

v.  Thorn] 
Frazer  v.  Thatcher.  365,  704. 
Frazier  v.  Barnum,  337,  661. 

7 .  Fredericks,  446. 
Frederick  v.  Shorey,  533. 
Fredericks  7.  Davis,  733. 
Freedman's  Saw  &  T.  Co.  7 .  Earle,  70S. 
Freeholders  of    Hunterdon  v.    Henry, 

661,  662. 
Freeland  7'.  Freeland,  45,  185,  231,  232, 

722. 
Freelove  v.  Cole,  72^. 
Freeman  7'.  Bowen,  647. 

7'.  Deming,  229. 

7'.  Klmendorf.  245. 

7'.  Freeman,  519. 
.  I  [artman,  544. 

7'.  Pope,   1-7. 

v.  Sedwick.  726. 

v.  Smith,  93. 
Freider  v.  Lcinkauff,  140. 
Frelinghuysen  7r.  Nugent,  83. 
French  z\  Andrews,  616. 

7'.  Rreidelman,  319. 

7'.  Burns.  423. 

v.  Kdwards,  571. 

t'.  French,  17,    59,  t\. 

v.    Holmes,   23,  55,    79,  188,    190, 
437.  538. 

7\  Motley,  387,  506,  525,  703. 

7'.  Shotwell,  247.  736. 
Frenche  v.  Kitchen,  50S. 
Freund,  v.  Yaegerman,  594. 
Friedburgher  v.  Jaberg,  564,  610. 
Friedenwald  ?■.  Mullan,  30S,  666. 
Friedman  7'.  Fennell,  57. 
Frisbey  v.  Thayer,  142. 
Frisk  7 .  Reigelman,  430,  432. 
Frith  v.  Cartland,  S3. 
Frost  v.  Mott,  15s,  159,  262. 

7 .   Warren,  407. 
Frothingham  v.  Hodenpyl,  140,  147. 
Fulkerson  v.  Sappington,  480. 
Fullagar  v.  Clark,  9S. 
Fuller  v.  Bean,  i  -4. 

7.  Brewster,  7,  n.  190,  415,  426, 
468,  473. 

7.  Brown,  21,  1S3,  1S7. 

7'.  Griffith,  424. 

7.  Kent,  56. 

v.  Pinson,  671. 

7.  Roberts,  354. 
Fullerton  v.  Viall,  322,  323. 
Fullington     Northwestern    Imp.,    etc., 

Assoc,  197. 
Fulp  v.  Beaver,  7,  523. 
Fulton  7.  Fulton,  040. 

7'.  Woodman,  301,  698. 
Funkhouser  7.  Lay.  69S. 
Furman  v.  Tenny,  92. 


Reference* \        TABLE    OF    CASES.        [are  towage*. 


XXXI 


Fury  v.  Strohecker,  62. 
Fusze  z'.  Stern,  130. 

Gable  v.  Columbus  Cigar  Co.,  1,  203, 

374,  392,  527,  529- 
Gadsden  v.  Woodward,  269. 
Gaftney's  Assignee  v.  Signaigo,  424. 
Gage  v.  Dauchy,  95,  532,  533. 
Gainer  v.  Russ,  304. 
Gaines  v.  Chew,  288. 

v.  Relf,  137. 
Galbreath  v.  Cook,  395. 
Gale  v.  Williamson,  187. 
Galentine  v.  Wood,  225. 
Gallagher,  /;/  re,  69. 

v.  Rosenfield,  619,  623. 
Gallagher's  Appeal,  390. 
Gallatian  v.  Cunningham,  308. 
Galle  v.  Tode,  319,  35S,  603. 
Gallman  v.  Perrie,  100,  108,  246. 
Galpin  v.  Galpin,  722. 
Gamber  v.  Gamber,  530. 
Games,  Ex  parte',  619. 
Gannard  v.  Eslava,  182,  187. 
Gans  v.  Thieme,  348. 
Garahy  v.  Bayley,  674. 
Garbutt  v.  Smith,  62. 
Garden  v.  Bodwing,  619. 
Gardenier  v.  Tubbs,  470. 
Gardiner  v.  Sherrod,  118. 
Gardiner  Bank  v.  Wheaton,  17. 
Gardinier  v.  Otis,  322. 
Gardner  ?'.  Baker,  181. 

v.  Broussard,  431. 

v.  Cole,  37,  66S. 

v.  Commercial  Nat.  Bank,  567. 

v.  Gardner,  144. 

v.  Kleinke,  187,  197. 

v.  Lansing,   177. 

v.  McEwen,  410,  621. 

v.  Ogden,  738,  739. 

v.  Oliver  Lee's  Bank,  517. 
Gardner's  Admr.  v.  Schooley,  392. 
Gardom  v.  Woodward,  370,  494. 
Garesche  v.  MacDonald,  67S. 
Garfield  v.  Hatmaker,  107,  108,  164,  242. 
Garland  v.  Garland,  644,  655,  658,  660. 
Garman  v.  Cooper,  453,  461. 
Garner  v.  Graves,  224,  490. 

v.   Second    Nat.    Bank,    147,  531, 

535-  536,  593- 
Garnsey  v.  Rogers,  81. 
Garr  v.  Klein,  523. 
Garrahy  v.  Green,  491. 
Garretson  v.  Hackenberg,  446,  466. 

v.  Kane,  68,  735. 
Garrett  v.  Warner,  539. 
Garrison  v.  Monaghan,  55,  80. 
Garrity  v.  Haynes,  533. 
Garrow  v.  Davis,  304. 
Garvin  v.  Williams,  730. 
Gary  v.  Jacobson,  726. 
Gasherie  v.  Apple,  605. 
Gates  v.  Andrews,  563. 


Gates  v.  Boomer,  215,  218. 

; .  Mow  rv,  733. 

v.  Young,  1 15,  125. 
Gay  v.  Bidwell,  22,  625. 

v.  Hamilton,  423. 

v.  Parpart,  1 14. 
Gayler  v.  Wilder,  73. 
Gaylord  v.  ImhorT,  93. 
Gaylords  r.  Kelshaw,  252,  254. 
Gebhard  v.  Sattler,  720. 
Gebhart  v.  Merfeld,  51,  221,  245. 
Geery  v.  Geery,  57,  142,  156,  177. 
Geisse  v.  Beall,  555. 
Geist  v.  Geist,  396. 
Genesee    County     Bank    v.     Bank    of 

Batavia,   219. 
Genesee    River    Nat.    Bank  v.    Mead, 

208,   276,  377. 
Genet  v.  Beekman,  639. 
Gentry  v.  Kelley,  370,  494. 
George  v.  Grant,  563. 

v.  Milbanke,  76. 

v.  Norris,  452. 

v.    Williamson,     129,    130,     223, 
708,  717. 
Gere  v.  Murray,  568. 
German  Bank  v.  Leyser,  224,  226. 
German   Ins.  Bank  v.  Nunes,  433,  572. 
Gerrish  v.  Mace,  246. 
Gettelmann  v.  Giti,  529. 
Getzler  v.  Saroni,  31. 
Ghormley  v.  Smith,  662,  663. 
Gibbons  v.  Pemberton,  176. 
Gibbs  v.  Neely,  497. 

v.  Thayer,  231. 

v.  Thompson,  407,  430. 
Gibson  v.  Crehore,  224. 

v.  Herriott,  512. 

v.  Hill,  452. 

v.  Jeyes,  729. 

v.  Love,  453. 

v.  Seymour,  424. 

v.  Shufeldt,  740. 

v.  Warden,  230. 
Giddings  v.  Sears,  480,  703,  705. 
Gifford  v.  Corrigan,  81. 

v.  Helms,  284,  513. 
Gilbert  v.  Decker,  452. 

v.  Glenny,  530. 

v.  Lewis,  274. 

v.  Stockman,  166. 
Gilhooly  v.  American  Surety  Co.,  307. 
Gill  v.  Carter,  29. 

v.  Griffith,  422. 

v.  Weston,  333. 
Gilleland  r'.  Rhoads,  93. 
Gillespie  v.  Allen.  374. 

v.  Cooper,  287,  513. 
Gillet  z\  Moody. 237. 

v.  Phelps,  427. 
Gillett  v.  Bate,  95,  325, 

?■.  Gaffney,  469. 
Gillette  v.  Bate,  73,  74.  84. 
Gilliland  v.  Jones,  361. 


XXXI 1 


FABLE    OF    CASES.       [are  towages. 


Gilman  :.  Hunnewell,  71. 
i  ,-iockwood,  517. 

.  Hutchinson.  135,  291,  543. 
Ginn  : .  Brown,  144. 
Gintber  v,  Richmond,  549.  59°>  6o6- 
lit  :    A.  P.  Hbtatihg  Co.,  534. 
Vounglove,  539. 
Brandon,  525. 
-     .  Zutavern,  - 
>n  v.  Fayerweather,  640. 
7.  Wilson.   276,  630. 
Glen  v.  Hope  Mut.  Life  Ins.  Co.,  81. 
Glendon  Iron  Co.  v.  L'hler,  567. 
Glenn  v.  Farmers'  Bank,  170. 

I  rlenn,  410. 
Glenny  v.  Langdon,  229,  230,  235,  591. 
Glidden  ; .  Hunt,  698. 

704. 
Goddard  v.  Weil,  459,  465. 
Godden  :.  Kimmell,  512.  516. 
('■■Hiding  v.  Brackett,  10S. 
Godfrey  v.  Germain,  416. 
v.  Miller,  431,  690. 
Goe's  Estate,  663. 
Goff  v.  Kelly,  231. 

v.  Rogers,  397,  406,  407. 
Gogebic   Inv.    Co.  v.    Iron  Chief   Min. 

Co.,  241. 
Goldsmith  v.  Goldsmith,  276. 

v.  Russell,  60,  127. 
Goll  &  F.  Co.  v.  Miller.  1S0. 
Gollober  v.  Martin.  431,  6S9,  691. 
Gollobitsch  v.  Rainbow,  498. 
Gome/  v.  Hagaman,  703. 
Gooch's  Case,  46. 
Goodbar  v.  Cary,  388,  3S9. 
Goodbar  Shoe  Co.  v.  Montgomery,  613. 
Goode  v.  Garrity.  140. 
: .  1  lawkins,  9. 
Goodcll  v.  Fairbrother,  45a. 
Goodheart  tjohnson,  619. 
Goodman  v.  Harvey,  6S7. 
v.  Simonds,  9. 
7.  Wineland,  437. 
Goodnow  v.  Smith.  47'j. 
Goodrich  z\  Downs,  568,  573. 
.  in  :■.  Hubbard,  358. 
V.  Kelly,  463. 
V.  Snyder,  312. 
v.  Wertheimer,  301,  561. 
I  iwii  v.  Goodwyn,  717. 
Goodyear   Vulcanite   Co.    t\    Frisselle, 
1  i'..   1--4 

ns  7.  Gilmore,  44').  625,  635. 
.  in,  Matter  of,  573. 
7.  Anthony,  73. 
7'.  Cannon,  347. 
Hobart,  137. 
Reynolds,  [81,  294,  296. 
Ritenour.    ; 
7.  Worthley,  537. 

Gorham  v.  Innu 
Gormerly  v.  Chapman,  109,  133. 
•  .     .  Potter,  in. 


Gcrrell  v.  Dickson,  73,  136. 

Goshorn     v.    Snodgrass,    15,    400,    402, 

405,  410,  432,  666,  698,  700. 
Goss  7'.  Neale,  704. 
Gottlieb  7'.  Thatcher,  435,  436. 
Goudy  v.  Gebhart,  722. 
Gould  v.  Emerson,  56,  541. 

v.  Sieinburg,  246. 

7'.  Ward,  418. 
Governor  r.  Campbell,  357,  558. 
Cowan  7.  Gowan,  725,  737. 
Grabill  v.  Moyer,  524,  525,  535. 
Graff  v.  Bonnett,  86. 
Graff's  Estate,  34S. 
Graffam  v.  Burgess,  7. 
Gragg  7'.  Martin,  375. 
Graham  v.  Chapman,  18. 

v.  Culver,  309. 

v.  Furber,  432. 

v.  Meyer,  711. 

v.    Railroad    Co.,    205,   240,   247, 

359-  377,  717.  736- 
Graham  Button  Co.  v.  Spielmann,  237. 
Grand  Island  Banking  Co.  v.  Costello, 

425- 
Granger  v.  George,  514. 
Grant,  Ex  parte,  69. 

7 .  Carpenter,  640. 

v.  Gre»  n,  393. 

v.  Lewis,  460. 

v.  Libby,  502. 

v.  Lloyd,  310. 

?•.  Morse,  733. 

v.  National  Bank,  9,  694. 

v.  Sutton,  524,  527,  529. 

v.  Ward,  9,  188,  528. 
Graver  v.  Faurot,  741. 
Graves  r'.  Blondell,  25,  34. 

v.  Corbin,  252,  260,  521. 

v.  Davenport,  392,  526. 

v.  Dolphin,  64,  646,  654. 

v.  Graves,  370,  494. 
Gray  7'.  Blanchard,  640. 

v.  Chase,  128. 

v.  Corbit,  660. 

v.  Galpin,  434. 

7.  McCallister,  364. 

v.  Obear,  640. 

V.  Schenck,  250,  258. 
Great  Falls  Mfg.  Co.  v.  Worster,  738. 
Great  Western  Tel.   Co.    v.  Burnham, 

123. 
Greaves  v.  Gouge,  144,  221,  225. 
Greeley  '•.  Dixon,  577. 
(ireen  v.  Adams,  222. 

7\  CreiKhton,  137,  156. 

v.  Early,  692. 

7 .  Givan,  ibS. 

v.  1  licks,  251. 

v.   Kimble,  118. 

v.  Milbank,  249. 

v.  Nixon,  28. 

r1.  Richardson,  81. 

v.  Sarmiento,  517. 


References']       TABLE    OF    CASES.       [are  to  pages. 


XXX 1 1 1 


Green  v.  Spicer,  646,  657. 

v.  Tanner,  302. 

v.  Tantum,  67. 

z.  Trieber,  20. 

v.  Van  Buskirk,  123. 

v.  Walkill  Nat.  Bank,  263. 

v,  Wallis  Iron  Works,  233. 
Greene  v.  Breck,  220. 

v.  Greene,  87. 

v.  Keene,  67,  73. 

v.  Sprague  Mfg.  Co.,  1S4,  214. 
Greenebaum  v.  Wheeler,  454,  623, 
Greenfield's  Estate,  188. 
Greenleaf  v.   Mumford,    no,  159,    175, 

241. 
Greenleve  v.  Blum,  363. 
Greenway  v.  Thomas,  140,  16S,  169. 
Greenwood  v.  Brodhead,  51,  149. 

v.  Marvin,   320. 
Greer  v.  O'Brien,  418,  433. 
Gregg  v.  Bigham,  476. 

v.  Cleveland,  583,  610. 
Gregory  v.  Gray,  4I0>  435- 
Grider  v.  Graham,  720. 
Gridley  v.  Watson,  190. 
Griffin  v.  Barney,  575,  606,  609. 

v.  Doe  d.  Stoddard,  214. 

v.  Macaulay,  726. 

v.  Marquardt,  370,  557,  559,  568, 
616,  668. 

v.  New  Jersey  Oil  Co.,  391. 

v.  Nitcher,  in,  140,  141,  142. 

v.  Peters,  390. 

v.  Stanhope,  419. 
Griffith  v.  Griffith,  297,  672,  673. 

v.  Parks,  484. 

v.  Townley,  349. 
Grimes  v.  Hill,  489. 
Grimes  D.  G.  Co.  v.  Shaffer,  368,  481. 
Grimsby  v.  Ball,  229. 
Grimstone  v.  Carter,  674. 
Griswold  v.  Sheldon,  443,  459,  622. 
Grocers'   Bank  v.  Murphy,  69. 
Grogan  v.  Cooke,  58,  67. 
Gross,  Estate  of,  79,  So. 

v.  Daly,  143,  15S,  175,  241. 

v.  Eddinger,  526. 
Grotenkemper  v.  Harris,  437. 
Grover  v.  Grover,  301. 

v.  Wakeman,  7,    10,    18,   26,  363, 
548,  573,  577,  590,  607. 
Grover  &  B.  S.  M.  Co.  v.  Radcliff,  277. 
Groves  v.  Rice,  233,  547. 
Grubbs  v.  Greer,  433. 
Grunsky  v.  Parlin,  358. 
Guckenheimer  v.  Angevine,  340,  349. 
Guerin  v.  Hunt,  592,  593,  598. 
Guernsey  v.  Powers,  335. 

v.  Wood,  517. 
Guest  v.  Barton,  718. 
Guice  v.  Sanders,  451. 
Guidry  v.  Grivot,  35,  242,  723. 
Guignard  v.  Aldrich,  470. 
Guillander  v.  Howell,  123. 
C 


Guion   v.  Liverpool,  I..   &   (\.  Ins.  Co., 

476. 
Gullickson  : .  Madsen,  1  1  1 
Gumberg  v.  Treusch,  372,  401. 
Guthrie  r.  Gardner,  to8,  164. 
Gutzweiler  t.  Lackmann,  12. 
Gwin  ,-'.  Selby,  102. 
Gwyer  v.  Figgins,  188. 

Haack  z>.  Weicken,  728. 
llaak's  Appeal,  246,  366,  717. 
Haas  ?'.  Chicago  Bldg.  Soc,  336. 

7'.  Sternbach,  354,  421. 
Habenicht  -'.  Lissak,  71,  337. 
Hackett  v.  Jvlanlove.  617. 
Hackley  v.  Headley,  354. 
Hadden   v.  Spader,    16,   40,    51,    58,  67, 

74,  107,  130- 
Hadley  v.  Morrison,  61. 
Hadock  v.  Hill,  674,  688. 
Haenschen  v.  Luchtemeyer,  492. 
Hafner  v.  Irwin,  5,  419,  422,  556. 
Hagan  v.  Walker,  156,  166. 
Hagar  v.  Shindler,  247,  317. 

v.  Thomson,  9,  12. 
Hagerman  v.  Buchanan,  193. 
Haggarty  v.  Pittman,  103. 
Haggerty  v.  Nixon,  107,  140. 
Hahn  v.  Penney,  486. 
Haines  v.  Hollister,  251,  259,  261. 
Halbert  v.  Grant,  157. 
Hale  v.  Baldwin,  517. 

v.    Metropolitan    Omnibus    Co., 

44«- 

v.  Nashua  &  L.  R.  R.  Co.,  289. 

v.  Sweet,  457,  632. 

v.  Tavlor,  370. 

v.  West  Va.  Oil  &  Land  Co.,  47S. 

v.  Wetmore,  223. 
Hall  v.  Arnold,  26,  357,  365. 

7\  Callahan,  224. 

v.  Germain,  357. 

v.  Hall,  29,  77. 

v.  Law,  512. 

v.  Marston,  81. 

v.  Moriarty,  213. 

v.  Ritenour,  486. 

v.  Russell,  516. 

v.  Sands,   55,  183. 

v.  Stryker,  160. 

v.  Tufts,  643. 

v.  Williams,  656. 
Hallet's  Estate,  ///  re,  S3. 
Hallett  ?'.  Thompson,  65,  85,  654,  661. 
Hallgarlen  v.  Oldham,  614. 
Halloch  7'.  Alvord,  494- 
Hal'oran  v.  Halloran,  737. 
Hallowell  v.  Bayliss,  231. 
Halsey  v.  Cheney,  511. 
Halstead  7'.  Grinnan,  507. 

v.  Westervelt,  66i,  662. 
Halsted  t.  Halsted,  121. 
Ham  7'.  Gilmore,  432. 

v.  Van  Orden,  396. 


XXXIV 


■•  »]        TABLE    OF    CASKS.        [are  to  pages. 


Hamburger  v.  Gram.  54. 
Hamett  v.  Dundass,  30,  181,  [82. 
Hamilton  v.  Cone,    107,    1-7.    104,242, 

:.  Russel,  37.  4.52,  453. 

-.  Scull,  722. 
Hamilton  Nat.  Hank  v.  Halsted,  6,  321, 

.       344.  34?.  718. 
Hamilton- Brown  Shoe  Co.  v.  Mercer, 

550. 
Hamlen  v.  McGillicuddy,  111,258,  271.. 
Hamlin    :.  Wright,    217.    21S,  234,   236, 

Hammond   v.   Hopkins,   283,507,   511, 
516. 

v.   Hudson   River  I.  &   M.  Co., 
220. 
Hanby  v.  Logan,  80. 
Han  ars,  1 16,  117. 

Hand  v.  Kennedy.  81. 
Handley  v.  Stutz,  237. 
Hanes  v.  Tiffany,  232. 
Hanfonl   v.  Artcher,  393,  451,  458,  4',(>- 

v.  ( >brecht,  470. 

V.   Paine,  614. 

.  Prouty,  389. 
Hangen  7.  Hachmeister,  347,  619,  621. 
Hann  v.  Van  Voorhis 
Hannan  v.  Oxley,  529. 
Hanover  N'at.  Bank  v.  Blake,  711,  713. 

v.  Klein,  304. 
Hanover  R.  R.  Co.  z\  Coyle,  487. 
Hanson  ?■.  Bean,  406,  409. 

v.  Buckner,  1-7. 

v.  Metcalf,  563. 
Hap^odd  v.  Lisher,  667. 
Hard  v.  Ashley.  371. 
Hardenburgh  v.  Blair,  661. 
Hardesty  v.  Kinworthy,  4S2. 
Hardey  v.  Green,  190. 
Harding  v.  Bunnell,  306,  307. 

v.  Elliott,  100,  365. 

7 .  1  iandy,  274. 
Hardmann  v.  Bowen,  558,  565,  592. 
Hardt  v.  Heidweyer,  284,  2^5,425,  596. 
Hardware  Co.  ?■.  Implement  Co..  597. 
Hardy  v.  Mitchell,  519. 

v.  Potter,  449. 

7.  Simpson,  22,  24. 
I  tlai  ksheai 
Harkness  v.  Russell,  450. 

mi  7'.  Maglaughlin,  306. 
I  larlin  v.  Stevenson.   . 
Hannan   v.   Hoskins,    [9,   20,   22,   351. 

Harmon  ■     I  larmon,  717. 
Harper  v.  I  larper,  733. 

I''    '  !  ', 

I  larrell   v.  <  rodwin,  449. 
V.    Kim.   -  I",. 

7.    Mit.  hell,  394.  404.  432.  43?. 

1  [arriman  v.  Gray,  545. 

Harris  v.  Alcock,  407. 


Harris  v.  Burns,  428. 

z\  Harris.   183,  244,    728. 

z\  Russell.  359,  407,  491,  492. 

v.  Sangston,  338. 

7 .  Sumner,  609,  702. 
Harrison  v.  Gibbons,  150. 

7'.  Hallum,  2q 

7.  Mayor,  etc.,  of  Southampton, 
29. 

r.  Trustees  of  Phillips  Academy, 
424. 
Hart,.  Matter  of,  227. 

v.  Chalker,  391. 

v.  Flinn,  302. 

7 .  Sandy,  42S,  429,  431,  432. 

v.  Sansom,  730. 

v.  Ten  Eyck,  219,  308. 

7'.  Wing,  454. 
Harter  v.  Christoph,  13. 
Hartlepp  v.  Whiteley,  271. 
Hartley  :■.  White.  387. 
Hartman  v.  Oilier.  497. 
Harton  v.  Lyons,  487,  493. 
Hartshorn  v.  Eames,  26,  III,  301,  363, 
410,  416,  426,  429. 

7'.  Williams.  424. 
Harvey  v.  Bresbin,  79. 

v.  McDonnell,  229,  262,  547. 

v.  Varney,  71''.  7~,  723.  733- 
Harvey's  Estate.  ///  re,  77. 
Harwick  z-.  Weddington,  399,  494. 
Harwood  v.  Railroad  Co.,  511. 
Hasie  v,  Connor.   9,   12,  411,  6SS,  703. 
Haskett  v.  Auhl.  <  3q. 
Hassam  v.  Barrett,  423,  425.  737. 
Haston  v.   Castner,   155,  166,    1S6,  187, 

206,  226. 
Haswell  v.  Haswell,  047. 
Hatch  7'.  Bayley.  -. 

v.  Dana,  68,   131.  237,  240,  241. 

7  .    Daniels,  33S. 

v.  Dorr,   12<). 
Hathawav  7.  Brown,  37".  37L 

v.  Moran,  570,  572. 

v.   Noble,  507. 
Hatstat  7'.  Blakeslee,  452,  453. 
Hauer's  Estate,  530. 
Hauselt  v.  Harrison,  618. 

7.  Vilmar,  3<>4,  600. 
1  l.tven  ?'.  Richardson,   1 1  - 
.  660,  661. 
1  [awes  v.  Loader,  223. 

7 .  ( >akland,  144,  221. 
Hawkins  v.  Alston,  4"-. 

7r.  Davis,  • 

v.  Galhercole,  336. 

v.  CI   tin.  172. 

7.  Hastings  Lank,  630,  631. 

7 .  Kan-. is  City  I  L  P.  B.  Co.,  465. 
I  [awley  v.  Cramer,  0S9. 

7'.  Fairbanks,  740. 

z'.  1  lamp  ton,  93. 

v.  1  lunt,  ?i7. 

v.  James,  560. 


References']       TABLE    OF    CASKS.        \are  to  pages. 


XXXV 


Hawley  v.  Northampton,  640. 

Haxtun  v.  Bishop,  615. 

Haydock  v.  Coope,  547,  577,  578,  715. 

Haydock  Carriage  Co.  v.  Pier,  560. 

Hayes  v.  Westcott,  348. 

Haynes  v.  Brooks.  563,  579 

v.  Hoffman,  6 

:•.  Hunsicker,  466. 

v.  Rogers,  36S,  47-. 
Hays  v.  Montgomery,  3S1. 
Heacock  v.  Durand,  roi,  588. 
Heard  v.  Murray,  337. 

- .  Sturgis,  552. 
Heartt  v.  Corning,  303. 
Heath  v.  Bishop,  65,  657,  660. 

v.  Heath,  106. 

v.  Page,  25.  183,  319,  49S. 
Heaton  z\  Prather,  674. 
Hebbard  v.  Iiaughian,  396. 
Heck  v.  Fisher,  60. 
Heckman  v.  Messinger,  89,  553,  574. 
Hedges  v.  Polhemus,  633,  635. 
Hedman  v.  Anderson,  626. 
Hedrickf.  Strauss,  375,  668,  671. 
Heeren  v.  Kitson,  392. 
Hefner  v.  Metcalf,  26. 
Hegeler  v.  First  Nat.  Bank,  421. 
Hegewisch  v.  Silver,  337. 
Heiatt  v.  Barnes,  149,  150,  188. 
Heilman  v.  Jones,  247. 
Heineman  v.  Hart,  234. 
Heintze  v.  Bentley,  406. 
Helms  v.  Green,  402,  432,  528. 
Hempstead  v.  Johnston.  7. 
Henckley  v.  Hendrickson,  7. 
Henderson  v.  Brooks.  150. 

v.  Downing,  634. 

v.  Henderson,  1S0,   211,  317,  432. 

v.  Hoke,  209. 

v.  Hunton,  343. 
Hendricks  v.  Mount,  214. 

v.  Robinson,  16,  148,  2S1. 
Hendrickson  v.  People,  400. 
Hendrix    v.   American    F.    L.    M.    Co., 

336- 
Henkel,  In  re,  91. 
Henley  v.  Hotaling,  423. 
Hennequin  v.  Clews,  339,  518. 
Henning  v.  Harrison,   640. 
Henry  v.  Harrell,  406. 

v.  Henry,  49S. 

v.  Hinman,  25,   34,  100,   109,  no. 

v.  Sargeant,  269. 

r.  Vermilion  R.  R.  Co.,  68. 
Hentz  v.  Phillips,  265. 
Hepworth  v.  Union  Ferry  Co.,  1S3. 
Herkelrath  v.  Stookey.  405. 
Herman  v.  McKinney,  667. 
Herrick  v.  Borst,  278,  481,  482. 
Herring  v.  N.  Y.,  L.  E.  &  W.  R.  R.  Co., 
141. 

v.  Richards,  12,  190,  191,  194,  212, 
366. 

v.  Wickham,  7,   9,  374,  383,  530. 


Herrlich  r.  Brennan, 

I  [ershy  v.  Latham, 
Hess  v.  H  262. 

.  Voss,  664. 

.  Stevenson,  73,  74. 
Hesser  r .  Wilson,  454. 
1  [esthal  v.  Myles,  454. 
Hevenor,  Matter  of,  550,  551. 
Hewitt    v.    Commercial    Banking  Co., 
368. 

v.  Williams,  523. 
Hews  v.  Kenney,  534. 
Heydock  v.  Stanhope,  135. 
lleve  v.  Bolles,  t6o,  175. 
Heyneman  v.  Dannenberg,  166,  332. 
Heywood  v.  City  of  Buffalo,  245. 
Hibernia  Ins.  Co.  v.  St.  Louis,  etc.,  Tr. 

Co.,  241. 
Hibernia  Nat.  Bank  v.  Lacombe,  614. 
Hickey  v.  Ryan,  482. 
Hickman  v.  Trout,  399,  402,  403. 
Hickox  v.  Elliott,  24,  253,  255. 
Hicks  7'.  Campbell,  290. 

v.  Sharp,   491. 
Hiern  v.  Mill,  672. 
Higby  v.  Ayres,  215,  218. 
Higgins  v.  'Crouse,   273,  2S7,  351^507, 
6S4. 

v.  Gillesheiner,  236. 

v.  Spahr,   429. 
High  v.  Wilson,  520. 
Hildebrand  v.  Bowman,  89,  574. 
Hildeburn  v.  Brown.  419. 
Hildreth   v.  Fitts,  463. 

v.  Sands,  246,  419,  46?. 
Hilgenberg  v.  Northup,  8. 
Hill,  Ex  parte,  647. 

Matter  of,  147. 

v.  Agnew  . 

v.  Ahern,  670. 

v.  Bowman,  404,  704. 

v.  Draper,  562. 

v.  Reed.  615. 

v,  Ryan  Grocery  Co.,  303. 

v.  Wood  berry,  564,  566. 
Hilliard  v.  Cagle,  206,  366,  419,  421. 

V.  Phillips,  492. 
Hills  v.  Carlton,  516. 

v.  Eliot,  4S0. 

.  .  Sherwood,  156,  224,  476. 
Hilton  v.  Guyot,  154. 

v.  Morse,   193,  366. 
Hinchliffe  v.  Shea,  54?. 
Hinchman  v.  Parlin  &  <).  Co.,  526. 
Hinckley  v.  Kreitz,  222. 
Hinde  v.  Vattier, 

Hinde's  Lessee  v.  Longworth,  1S9,  190, 
194,  205,  208,  380,  395,  437,  534.  54o. 
Hinds  v.  Hinds,  183. 

v.   Keith,  370,  478,  689. 
Hine  <-.  Bowe,  ?4"- 
Ilines  v.  Hawkins,  489. 
Hinkle  v.  Wilson,  526,  539. 


.  !        TABLE    OF    CASES.        [are  to  pages. 


Hinkle's  Appeal,  663. 
Hinton  .- .  Greenleaf,  497. 
Hrrschfeld  :.  Williamson,  490. 

,  Hartford  L.  1.  Co.,  57. 
Hisle  v.  Rudasill,  381, 
Hitch<  mus    581. 

1 .  Kielj  376. 

Hitt  v.  Ormsbei 
Hixon  r .  George,  91,  92. 

-  iyre,  4'  >8. 
Hi. ban  v.  Hobart,  243. 

5   ;  .  D.i\  is,   35,   365,  36S. 

,  Smith,  ''4i .  ' 
11. >l.i. ken  Hank  v.  Beckman,  303,  306. 
1  [01  key   v.  Mawbey,  77. 
Coleman,  705. 
New   England  Screw  Co.,  27.1. 

;.  Silver  Hill  Min.    Co.,   145.  I?S. 

:.  Spicer,  4.13. 

v,  Winston,  92. 
Hodgman  v.  Western  R.  R.  Co.,  553, 
Hodgson  v.  Butts,  3S0. 

v.  Newman,  408. 
Hoey  v.  Pierron,  539. 
Holler  v.  Gladden,  432. 
Hoffman  V.   Henderson, 502. 

-.Junk,  51,  1S3,  244,  366. 

7.  Mac  kail,  26. 

v.  Noble,  45. 

v.  N'olte,  52S,  529. 

v.   Pitt,  446. 

: .  Susemihl,  7 
Hoffman's  Appeal,   133. 
1  (ogan  v.  Burnett,  1 ,2. 
Hoke  v.  Henderson,  699. 
Holbird  v.  Anderson,  26,   363,   365,408, 

7"4- 
Holbrook  v.  Holbrook,  490. 

7.  New  Jersey  Zinc  Co.,  29S,  299. 
Holcombe  v.  Ehrmann traut,  4S1. 
Holden  v.  Burnham,  iSS,  277,  376. 
I  loldship  V.  Batters. .11,  65,  '.50.  657.  662. 
Hollacher  7.  O'Brien,  450,  4.59,  460. 
Holladay  Case,  The,  I2>,  177,  089. 
Holland  7 .  Brown,  446. 

v.  Cruft,  224. 
Hollingsworth  7'.  Crawford,  330. 
Hollins  v.   Brierfield  Coal  &   Iron  Co., 

131.  136,  140.  359- 
Hollister  1 .  Abbott,  518. 

V.  Barkley,  338. 

1 .  Loud,  301,  353. 
I  lolli  way  V.   I  lolliway,  72'.. 
I  lolmberg  v.  Di  an,  -'74, 
1  lolmer  v.  \'iner,  7  1  _* . 
Hoi-  '        iii II.  77. 

1  ■   rdner,  666,  '.70. 
Gilman,  -  \. 

v.  Hubbard,  608. 

7'.   Marshall.  <*»). 

Sherwood,  253. 
1  reamer,  28,  52,  353,  391,  408. 
beck  ■  .   V.tnmetrc,  451. 


Home  Bank  v.  Brewster  &  Co.,  615. 
Hone  7\  Henriquez,  555,   708. 
Hooberry  z\  Harding, 

.  Jones,  524. 
1  looley  v.  Gieve,  63.  S3. 
Hooper  v.  Baillie,  564. 

v.  Winston,  336. 
Hoopes  v.  Knell,  433. 
Hooser  v.  Hunt,  6S9,  692. 
Hoot  7.  Sorrell,  415. 
Hope  Mut.  Life  Ins.  Co.  v.  Taylor,  239. 
Hopkins  v.  Bishop,  461,  462. 

v.  Joyce,  534. 

v.  Langton,  357,  693. 
Hopkirk  7 .   Randolph,  55,  79,  96. 
Horbach  v.  Hill,  i3o,  193,  198,  203,  366. 
Hord's  Admr.  v.  Colbert,  7,  9. 
Horn  7 .  Horn,  40,  107. 

v.  Keteltas,  423. 

v.  Ross,  194. 
Home  r-.  Chatham,  590. 
Horneffer  v.  Duress,  529. 
Horner  7'.  Zimmerman,  101. 
Horsey  v.  Heath,  223. 
Horsford  t.  (judger,  273. 
Horstman  v.  Kaufman,  309. 
Horton  v.  Dewey,  ^24,  528,  529. 

v.  Kelly.  88,  545. 

v.  Williams,  619. 
Horwitz  v.  Ellinger,  27,  566,  601. 
Hospes  7 .  Northwestern  Mfg.,  etc.,  Co., 

237- 
Houck  v.  Heinzman,  21. 
Houseman  z\  Grossman,  244. 
Houston  v.  Blackman,  395. 
Hovenden    7'.  Lord    Annesley.   40,    512, 

513- 
Hovey  v.  Elliott,  260,  315. 

v.  Holcomb,  294,  736. 
How  7.  Taylor,  464. 
Howard  v.  Leonard,  S6,  87,  638. 

7.  Prince,  136,  449,  451. 

V.  Rynearson,  392. 

7.  Sheldon,    150. 
Howard  Express  Co.  7>.  Wile,  499. 
Howard  Ins.  Co.  v.  Halsey,  674. 
Howard  Nat.   Bank  v.  King,  123. 
Howe  7.  Bishop,  107,  164,  358. 

7.  Johnson,  454. 

V.  Ward,  44. 

v.  Whitney,  142. 
Howe  Machine  Co.  v.  Claybourn.  357, 

692. 
Howell  v.  Donegan,  13. 

1 .  Edgar,  19. 

v.  Mitchell,  374. 

7.  Thompson,  182. 
1  lowland  v.   Blake,   13. 
Howse  v.  Moody,  257,   263. 
Howson  v.  Hancock,  712. 
Hoxie  v.  Price,   1S8,  246,  527,  529. 
I  [oxsey  v.  I  loxsey,  640. 
I  loyt,  Estate  of,  062. 

v.  Godfrey,  34,   54,  339. 


References']       TABLE    OF    CASES.       [arc  to  pages. 


XXXV11 


Hoyt  &  Bros.  Mfg.  Co.  v.  Turner,  692. 
H.  T.  Simon-Gregory  Co.  7.  McMahan 
489. 

v.  Schooley,  673,  679. 
Hubbard  v.  Allen,  374,  394,  430,  504. 

v.  Hubbard,  100. 

v.  McNaughton,  577. 

v.  Moore,  389. 
Hubbell  v.  Currier,  323. 

v.  Lerch,  219. 

v.  Meigs,  9. 

v.  Merchants'  Nat.  Bank,  251. 
Hubler  v.  Waterman,  576. 
Hudgins  v.  Kemp,  306,  415,  426. 
Hudnal  v.  Wilder,  224,  672. 
Hudson  v.  Osborne,  72. 

v.  Plets,  68,  69,  116. 

7'.  White,  716,  717. 
Hudspeth  v.  Harrison,  89. 
Huebler  v.  Smith,  452. 
Huey's  Appeal,  31,93. 
Huggans  v.  Fryer,  494. 
Huggfns  v.  Perrine,  206. 
Hughes  v.  Bell,  523. 

v.  Bloomer,  592. 

v.  Cory,  36,  444,  618,  625,  628. 

v.  Epling,  618. 

v.  Littrell,  515. 

v.  Monty,  489. 

v.  Northern  Pacific  R.  R.  Co.,  295. 

v.  Roper,  411. 
Hughitt  v.  Hayes,  562. 
Huguenin  v.  Baseley,  77,  127. 
Hugunin  v.  Dewey,  31,  92. 
Hugus  v.  Robinson,  455. 
Huiskamp  v.   Moline  Wagon  Co.,  390. 
Hulings  v.  Hulings  Lumber  Co.,  5S0. 
Hull  v.  Deering,  341,  563. 

v.  Hull,  243. 

v.  Sigsworth,  453. 
Humbert    Trinity  Church,  31. 
Hume  v.  Beale,  512. 

v.  Randall,  78. 
Humes   v.   Scruggs,    30,    146,   212,   302, 

311,  312,  534. 
Humphrey  v.  Spencer,  60,  61,  182. 
Hun  v.   Cary,  262. 
Hungerford  v.  Earle,  406,  419. 
Hunsinger  v.  Hofer,  183. 
Hunt  v.  Bender,  740. 

v.  Conrad,  553. 

v.  Field,  140.  160. 
Hunter  v.  Bradford,  305. 

v.  Corbett,  626. 

v.  Hunter,  294. 
Hunterdon   Freeholders  v.  Henry,  661, 

662. 
Hunters  v.  Waite,  33,  365. 
Huntington  v.  Attrill,  269. 

v.  Saunders,  326. 
Huntley  v.  Kingman,  27,  49,  703. 
Huntzinger  7'.  Harper,  501 
Hurd  v.  Ascherman,  304. 
Hurlburd  v.  Bogardus,  431,  464. 


Hurley  v.  Osier,  669. 
1 1  uschle  v.  Morris,  454. 
1  [ussey  7'.  Castle,  528. 
Hussman,  ///  re,  311. 
1  lutciieson  7.  Peshine,  615. 
Hutchins  v,  Gilchrist,  466. 

v.  Heywood,  315. 

7'.  Hutchins,   tig. 
Hutchinson  v.  Bolt/.,  529,  545. 

v.  First  Nat.  Bank,  232,  273,  277, 
280,   41  -v 

'■.    Lord,  586. 

7'.  Murchie,  207. 
Hutton  v.  Benkard,  77. 
Hyde  v.  Chapman,  177. 

v.  Ellery,  103,  332. 

v.  Frey,  531. 

t.  Woods,  65,  7...  87,  >^-:,  657. 
Hyman  7'.  Kelly,  336. 
Hymes  v.  Fstey,  311. 
Hyslop  z\  Clarke,  577. 

Idaho,  The,  64. 

Iley  v.  Niswanger,  209. 

Imhoff  s  Appeal,  93. 

Importers'  &T.  Nat.  Bank  v.  Quacken- 

bush,  114,  115,  142,  147,  151  177. 
Imray  v.  Magnay,  133. 
Ingalls  v.  Herrick,  449,  459. 
Inglehart    v.   Thousand    Island    Hotel 

Co.,  20,  22,  506. 
Ingliss  v.  Grant,  412. 
Inhabitants  of  Pelham  v.  Aldrich,  182. 
Inloes  7'.  Amer.  Exch.   Bank,  20. 
Inloes'  Lessee  v.  Harvey,  260. 
Innes  v.  Lansing,  220,  579. 
Innis  v.  Carpenter,  370,  480. 
Insurance  Co.  v.  Shoemaker,  418. 
Ionia  Co.  Sa.  Bank  v.  McLean,  392,  541. 
Irish  v.  Bradford,  31)1. 

7'.  Clayes,  345. 
Irons    v.     Manufacturers'     Nat.    Bank, 

238. 
Isaac  7'    Wilisch,  307. 
Iselin  7'.  Peck,  485. 
Iseminger  v.  Criswell,  524. 
Isham  v.  Schafer,  60. 
Ithaca  G.  L.  Co.  v.  Treman,  54. 
Ives  v.  Stone,  424. 

Jackman  v.  Robinson,  255,  258,  259,  264. 
Jacks  v.  Nichols,  302. 
Jackson   v.  Andrews,  297. 

v.  Badger,  377. 

v.  Burgott,  133. 
1  ■  irnell,  562. 

v.  Davison,  570,  572. 

7'.  Duchaire,  712. 

7'.  Edwards,  317. 

v.  Garnsey,  716. 

v.  Given,  509. 

v.  Glaze,  357. 

v.  Hart,   306. 

v.  King,  10,  112. 


xxxvni 


References]      TABLE    OF   CASES.       {are  to  pages. 


Jackson  :■.  Lewis,  187,360. 
mas,  712. 
v.  L' isee,  553. 
: .  Mather,  690. 
i .  Middlelon, 
: .  Miner,  191,  3S5. 

Myers,  :  t,    133,   i>2,   183,  221, 
244.  245. 
'  .  ler,  [94. 
Post,    I'll.  20S. 

ml/.    643. 

S   ward,  51,  1S2. 
-  >n  Bank  v.  Durfey,  3SS. 
Jacobs  v.  Allen,  B. 

v.    Morrison,  360,    482, 

6S6. 
v.  Totty,  42-v 
Jacoby  ':  Parkland  Dist.  Co.,  92. 
Jacoby's  Appeal,  109,  133. 
Jacot  v.  Boyle,  104. 
Jaeger  v.  Kelley,  9,   357.   358,  413. 

5  5  7- 
Jaffers  v.  Aneals,  417. 
Jaffray  v.  Greenbaum,  626,  628. 

v.  McGehee,  47,  135,  570,  572. 
Jaffrey  v.  Brown,  42'/. 

v.  McGough,  524. 
James  v.  Bird,  726. 
.  Gard,  640. 
v.  \'an  Duyn,  7. 
James  Goold  Co.  v.  Maheady,  528. 
Jamison  v.  Bagot,  476. 
v.  Beaubien,  133. 
v.  King,  415. 
McNally,  374. 
Janes  v.  Whitbread,  412,  5S1. 
Janvrin  v.  1 

Jaques  v.  Greenwood,  601. 
Jarboe  v.  Hey,  644,  I 
Jauretche  v.  Proctor,  640. 
Jeffres  v.  Cochrane,  709. 
Jencks  v.  Alexander,  [91. 
Jenkins  v.  Clement,  iSS,  189,  190. 
v.  Einstein,  433. 
7 .  Eldredge,  67  ;. 
,- .  1"'  iwler,  567. 

[81. 
Jenkyn  v.  Vaughaif, 
Jenne  v.  Joslyn,  474,  487. 
Jenney  v.  Andrews,  76,  77. 
JenniiiL'.^  2 .  I  loward,  279. 

Prentice,  5  1 
Jenny  1 .  Jenny 

irbonate  Nat.  1  Ian  li 
v.  M'  Carter,   z 
ll  ilse,  276, 
jetton  v.  '1  '■!»■  y 
Jewell  v.  Knight,  10,  12,  13,  28,  3",  628, 

741. 
v.  Parr,  499. 
7 .  Porter,  214, 
an,  8. 

'  .  iyei 

525,  ~<  4,  707. 


Jiggitts  v.  Jiggitts,  135,  543. 
Jimmerson  v.  Duncan,  107. 
Johnson  r\  Alexander,  58. 

v.  Cushing,  76. 
I  Ikins,  89. 

v.  Farnum,  332. 

v.  Gibson,  299,  697. 

v.  Griffin,  739. 

V.  Herring,   592. 

v.  Holloway,  454. 

r\  Jones,  155,  166,  224. 

7'.  Lovelace,  4S5. 

v.  McAllister,  576,  587. 

v.  Powers,  154,  226,   227. 

v.  Rapalyea,  604. 

v.  Rogers,  298,  509. 

v.  Sharp,  548. 

v.  Willey,  462. 
Johnston  7'.  Dick,  436. 

v.  Johnston,  524. 

v.  Jones,  499. 

v.  Thompson,  496. 

v.  Tuttle  Bros.,  19. 

v.  Zane,  194,  660. 
Joiner  v.  Franklin,  524. 
Jones,  /;/  re,  535. 

v.  Barkley,  712. 

v.  Bryant,  62. 

v.  Clifton,  78,  538. 

v.  Comer,  726. 

v.  Conn.  Bank,  315. 

v.  Conoway    5 14. 

v.  Davenport-,  226. 

v.  Easley,  469. 

v.  Graham,  141,  619. 

v.  Green,  6,  97,  140,  145,  147,  155, 
159,  167. 

v.  Huggeford,  626. 

7'.  Jones,  47S. 

v.  King,  181. 

v.  Light,    194,  425,  665,  670,  719. 

7'.  Massey,  274. 

7'.  Morrison,  290. 

v.  Nevers,  440. 

v.  Pugh,  335. 

7'.  Rahilly,  737. 

v.  Reeder,  323. 

v.  Reese,  660. 

7'.  Shaddock,  S3. 

v.  Simpson,   7,   8,   9,    10,    12,  365, 
398,  478. 

v.  Smith,  674. 

7'.  Snyder,  491. 

v.  Syer,  580,  581,  582. 

v.  Van  Doren,  83. 
Jones'  Appeal,  383. 
Jordan  7'.  Gillen,  553. 

t.  National  Shoe  &  L.  Bank,  562. 

7'.  White,  81,  704. 
Joseph  v.  Levi,  609,  619. 

v.  Mc<  rill,  [60,  333. 
Josselyn  v.  Josselyn,  646. 
Journeay  7\  Brown,  336. 
Jourolmonz/,  Massengill,  655,  658,  660. 


References']       TABLE    OF    CASES.       [arc  to  pages. 


Judson  v.  Courier  Co.,  252. 
Justh  v.  Wilson,  452,  4S0. 
Juzan  v.  Toulmin,  7. 

Kahanaiki  v.  Kohala  Sugar  Co.,  639. 

Kahley,  In  re,  619,  623. 

Kaighn  v.  Fuller,  338. 

Kain  v.  Larkin,  186,   1S7,  iSS,  192,  244, 

272,  274,  277,  377,  426,  4S0,  727. 
Kaine  v.  Weigley,  9,  13,  15. 
Kalk  v.  Fielding,  407,  618. 
Kalmus  v.  Ballin,  232,  318. 
Kampz'.  Kamp,  165. 
Kanawha  Valley  Bank  v.  Atkinson,  524. 

v.  Wilson,  60,  198. 
Kane  v.  Bloodgood,  516. 

v.  Drake,  451. 

v.  Hibernia  Ins.  Co.,  15. 

v.  Roberts,  212. 
Kankakee  W.  N.  Co.  v.  Kampe,  167. 
Kansas  City  Packing  Co.  v.  Hoover,  44, 

583,  584.  5S7- 
Kansas  Pacific  Ry.  Co.  v.  Couse,  460. 
Karll  v.  Kuhn,  410. 
Karst  v.  Gane,  142,  633. 
Karstorp's  Estate,  344. 
Kasson  v.  People,  126. 
Kaufer  v.  Walsh,  24,  368,  501. 
Kaufman  v.  Whitney,  528. 
Kavanagh  v.  Beckwith,  568. 
Kayser  v.  Heavenrich,  578. 
Keach,  In  re,  74. 
Keagy  v.  Trout,  8,  25,  408. 
Keating  v.  Retan,  502. 
Keel  v.  Larkin,  717,  725. 
Keen  v<  Kleckner,  387,  704. 
Keener  v.  Keener,  3S1. 
Keeney  v.  Good,  539. 

v.  Home  Ins.  Co.,  236. 
Keep  v.  Sanderson,  5S6,   587. 
Keevil  v.  Donaldson,  5S4. 
Kehr  v.  Smith,  209,  538,  541. 
Keith  v.  Fink,  389. 

v.  Proctor,  406. 
Kellar  v.  Taylor,  366,  675. 
Keller  v.  Blanchard,  451. 

v.  Paine,  124. 

v.  Payne,  161. 
Kelley  v.  Connell,  529. 

v.  Flory,  390,  563. 

v.  People,  495. 
Kelley-Goodfellow   Shoe  Co.   v.  Scales, 

59i- 
Kellog  v.  Richardson,  594. 
Kellogg  v.  Aherin,  309,  357. 

v.  Barber,  607. 

v.  Cayce,  563. 

v.  Clyne,  407,  500. 

z'.Olmsted,  264. 

v.  Root,  432. 

v.  Slauson,  8,  478,  585,  5S6,   606, 
607. 

v.  Slavvson,  7. 
Kelly  v.  Baker,  564. 


Kelly  v.  Campbell  4S8. 

v.  Crapo,  615. 

v.  Fleming,  434. 

V.  Lane,  241. 

7'.  Lenihan,  2<>. 

v.  McGrath,  523,  524. 
Kelsey  v.  Kelley, 
Kemp  v.  Folsom,  527. 

7'.  Small,  423. 
Kempner  v.    Churchill,    7,    11,   30,374, 

375,  405,  414. 
Kempton  v.  Hallowell,  660. 
Kendal  ,-.  \\'>  >od,  391 ». 
Kendall  v.  Fitts,  464. 

v.  New  Eng.  Carpet  Co.,  580. 

7'.  Samson,  450. 
Kennedy  t.  Barandon,  316. 

7'.  Creswell,  226,  227. 

v.  Divine,  490,  495,  496. 

7r.  Gibson,  263. 

v.  Green,  672,  674,  693. 

v.  Lee,  526,  534. 

7'.  McKee,   564. 

v.  Nunan,  315. 

7'.  Thorp,  234,  6or. 
Kensington  v.  White,  288. 
Kent  v.  Curtis,  140.,, 

v.  Lasley,  13. 

v.  Riley,  540. 
Kepple's  Appeal,  640. 
Kerbs  v.  Ewing,  594. 
Kercheis  v.  Schloss,  61  r. 
Kerr  v.  Hutchins,  316,  411. 
Kesner  v.  Trigg,  524,  540. 
Kessinger  v.  Kessinger,  386. 
Ketchum,  Matter  of,  69. 
Keteltas  7'.  Wilson,  616. 
Kevan  v.  Crawford,  408. 
Keys  v.  Grannis,  520. 
Keyser  v.  Angle.  667. 
Keyser's  Appeal,  663. 
Kibbe  v.  Wetmore,  123. 
Kidd  v.  Johnson,  72. 

v.  Rawlinson,  49,  446. 
Kidder  7'.  Horrobin,  229. 
Kidney  t.  Coussmaker,  210. 
Kilbourn  v.  Sunderland,  98,   112,  113. 
Kilbourne  v.  Fay,  232. 
Killam  7'.  Perce,  487. 
Killian  v.  Clark,  7,  206. 
Killinger  7-.  Reidenhauer,  543. 
Kilner,  Ex  parte,  714. 
Kilpatrick-Koch  D.   G.   Co.   v.  Strauss, 
425. 

Kilroy  v.  W I,  -7.  638,  650,  661. 

Kimball  v.  Fenner,  31)4,  529. 

7'.  Ilarman,  118. 

v.  Noyes,  82. 

v.  Thompson,  25. 
Kimble  v.  Smith,  366. 
Kimmel  v.  McRight, 
Kinealy  v.  Macklin,  318. 
King  v.  Bailey,  454. 

v.  Dupine,  40,  107. 


xl 


nets]      TABLE   OF   CASES. 


King    v,  Holland  Trust  Co.,  676. 

1 .  1  [ubbell,  4 

Moon,  1 12.  402,  429. 

v .  P  J      49S. 

! .  Ruble, 

v.  Russell,  4"4.  4"?.  435- 

p.  Tharp,  141'.  475. 

;  .   ["rice,  1  26,  297. 

v.  Wilcox,  341,  346,  410. 
King's  Estate, 

Thompson,  27S. 
King  (The).     See  Rex. 

•1  r .  Stroh,  90. 
Kingsbury   v.  Karle,  Si. 
Kinnan  v.  Guernsey,  77. 
Kinnard  7.  Daniel,  53S. 
Kinsley  v.  Scott,  122. 
Kip  v.  Bank  of  N.  V..   553. 
Kipling  v.  Corbin,  604. 
Kipp  v.  Hanna,  61,  210,  437. 

v.  Lamoreaux,  451.  478. 
Kipper?.  Glancey,  155,  169. 
Kirby  v.  Boyette,  659. 

v.  Bruns,  60. 

v.  Ingersoll,  18. 

v.  Lake  Shore  &  M.  S.  R.  R.  Co., 
283,  5ii,  513,  515. 

7.  Masten,  492, 

v.  Schoonmaker,  389. 
.  Tallmadge,  500,  693. 
Kirkbride,  Re,  623,  626. 
Kirkley  v.  Lacey,  531. 
Kirkpatrick   v.  Clark,  717,  724,  732. 
Kirksey  v.  Snedecor,  204,  212. 
Kirtland  v.  Snow,  456. 
Kiser  :■.  Dannenberg,  594. 
Kissam  v.  Edmundson,  209. 
Kisterbock's  Appeal,  355. 
Kitch  v.  St.  Louis,  K.  C.  &  N.  Rv.  Co., 

Kitchen  v.  McCloskey,  434,  435. 
Kittering  v.  Barker,  301. 
Kittredge  v.  Sumner,  357. 
Kitts  v.  Will  son,  423,  717,  719. 
Klapp  ; .    Shirk,  564. 
Klein  v.  Hoffheimer,  -  2. 
I  lorine,  275. 
7 .  McNamara,  31. 
V.  Richardson,  421. 
Kleine  -■.  Nie,  574. 
Kiev  v.  I  lealy,  349. 
Klosterman  v.  Mason  Co.  Cent.  R.  Co. 
139. 
7 .  Vader,  79,  394, 
Klous  v.  Hennessey,  11^,  rig. 
Klumpp  v.  <  rardner, 
Knapp  v.  City  of   Brooklyn,  27 
7 .  Day,  527,   - 

I  (omceopathic  Mut.  L.  I.  Co. 
56. 
v.  Lee,  722. 

1  rowan,  -  '.'.11. 

mith,  ^32. 
Knatchbull  v.  Hallet,  83. 


Knefler  v.  Shreve,  660. 
Knight  v.  Forward,  212,  4O2,  492. 
.  (ilasscock,  273 

- .  Hunt,  712. 
Knoop  7 .  Kelsey,  12S. 
Knott,  Exparte,  670. 
Knower  v.  Cadden  Clothing  Co.,  495 
070,  681,  686,  691. 

v.  Central  Nat.  Bank,  592,  716. 
Knowles  v.  Toone,  13. 
Knowlton  v.  11  awes,  669. 

v.  Mish,  30,  539. 
Knox  v.  McFarran,  133,  489. 

7 .  Moses,  351. 

v.  Yow,  94. 
Knye  v.  Moore,  288. 
Koenig  -■.  Steckel,  126. 
Koster  v.  Hiller,  18S,  189. 
Kraemer  v.  Adelsberger,  13. 
Kreider's  Estate,  93. 
Kreth  v.  Rogers,  587. 
Kreuzer  v.  Cooney,  453. 
Krumdick  v.  White,  233. 
Kruse  v.  Prindle,478. 
Kuevan  v.  Specker,  31. 
Kuhl  7'.  Martin,  187. 
Knhlman  v.  Baker,  513. 

v.  <  )rser,  607. 
Kurtz  v.  Miller.  694. 
Kutz's  Appeal,  524. 
Kuvkendall  v.  McDonald,  378. 
Kvello  7'.  Taylor.  88. 
Kyle  v.  O'Neil,  139. 

La  Bau  v.  Huetwohl,  335. 

Lacassagne  v.  Chapius,  260. 

Lachman  v.  Martin,  532. 

Lacker  v.  Rhoades,  553. 

Lackland  v.  Smith,  660. 

Lackman  v.  Wood,  I 

La  Crosse  Nat.  Bank  v.  Wilson,  58. 

Lacrosse  &  M.  R.  R.  Co.  v.  Seeger,  214. 

Ladd  t.  Newell,  531. 

v.  Wiggin,  424- 
Ladnier  7'.  Ladnier,  405. 
Lady  Washington  Consol.  Co.  ?■.  Wood, 

2S3,  694. 
Laidlaw  v.  Gilmore,  415. 
Laird  v.  Davidson,  4117,  525,  706. 
Lake  v.  Billers,  520. 

V.  Morris,  430,  464. 
Lake    Shore    Banking    Co.     v.    Ftner, 

602. 
I. alone  v.  United   Slates,   10. 
Lamar  Ins.  Co.  v.  Moore,  237. 
Lamb  v.  Stone,  1  1  7. 
Lamberton  v.  Pereles,  661. 
Lambrecht  v.  Patten,  527. 
Lamont  v.  Cheshire,  315. 
Lamperl  v.  I  la\  del,  044. 
Lamson  v.  Patch,  471. 
Landauer  v.  Mack,  374. 
Landes  v.  Brant,  698. 
Landon  v.  Townshend,  267. 


References]       TABLE    OF    CASES.        \are  to  pages. 


xli 


Lane  v.  Lane,  640. 

v.  Lutz,  617,  618. 

v.  Starr,  630. 
Lang  v.  Lee,  410,  619. 

v.  Stock  well,  449,  463,  480. 
Langford  v.   Fly,  51,  244,  429. 

v.  Thurlby,  525,  533. 
Lanmon  v.   Clark,  29b. 
Lant  v.  Morgan's  Admr.,  281. 
Lario  v.  Walker,  640. 
Larkin  v.  McAnnallv,  93. 

v.  McM  ullin,  199. 
Lassells  v.  Cornwallis,  76. 
Lassiter  v.  Davis,  361,  376. 

v.  Hoes,   523. 
Lathrop  v.  Bampton,  83. 

v.  Clapp,    235,  45S,  406,  555- 

v.  Clayton,  451,  465. 
Latimer  v.  Batson,  446,  469. 
Lattin  v.  McCarty,  104. 
Laughlin  v.  Calumet  &   C.  Canal  &  D. 

Co  ,  509. 
Laughton  v.    Harden.    51,  190,  197,  255, 

360,  376,  437. 
Lavelle  v.  Clark,  479. 
Lavender  v.  Boaz,  432. 
Law  v.  Payson,  476. 
Lawrence    v.     Bank    of    the    Republic 
no,  242,  251,  252,  259,  290. 

v.  Davis,  554. 

v.  Fox,  81,  82. 

v.  Norton,  577,  578. 

v.  Tucker,  391,  396. 
Lawson  v.  Ala.  Warehouse  Co.,  407. 

v.  Funk,  354,  355. 

v.  Moorman,  476. 
Lawton  v.   Buckingham,  396. 
Lay  v.  Neville,  454. 
Lea  v.  Hinton,  542. 
Leach  v.  Flack, 668. 

v.  Francis,   357. 

v.  Kelsey,  231. 

v.  Shelby,  394,  396. 
Leadman  v.  Harris,  23. 
Leasure  v.  Coburn,  405. 

v.  Forquer  273. 
Leather  Cloth  Co    v.  Amer.  Cloth  Co., 

72. 
Leavitt  v.  Beirne,  650. 

v.  Blatchford,  703. 
Ledyard  v.  Butler,   503,  670. 
Lee  v.  Chase,  227. 

v.  Cole,  232,  318,  327,  526,  527. 

v.  Figg,  360,  361,  376. 

v.  Kilburn,  484,  487. 

v.  Lamprey,  495. 

v.  Lee,  278. 

v.  Pearce,  15. 
Leeds  v.  Cameron,  391. 
Le  Fevre  v.  Phillips,  149,  169. 
Leffel  v.  Schermerhorn,  427. 
Leffingwell  v.  Warren,  571. 
Lega:ett  v.  Standard  Oil  Co.,  508. 
Le  Goaster  v.  Barthe,  132. 


Legro  v.  Lord,  31,  88. 
Lehman  v.  Bentley,  391,  397. 

v.  Greenhut,  41 1. 

v.  Kelly,  63. 

v.  Meyer,  293. 

v.  Roseni^aitcn,  550. 
Lehmberg  v.  Biberstein,  212. 
Leicester  v.  Rose,  712, 
Leigh  v.  Harrison,  653,  655,  660. 
Leighton  v.  Orr,  29, 
Leiman,  Matter  of,  232. 
Leitch  v.  Hollister,  577,  609. 

v.  Wells,  298,  299. 
Leland,  /;/  re,  232. 
Lemmon  v.  People,  269. 
Le  Neve  v.  Le  Neve,  683. 
Lenox  v.  Roberts,  615. 
Leonard  v.  Baker,  419. 

v.  Bolton,  183,  194. 

v.  Bryant,  476. 

v.  Clinton,  56,  57,  542. 

v.  Forcheimer,  309. 

v.  Green,  253. 

v.  Nye,  552. 
Le  Page  v.  Slade,  358. 
Leppig  v.  Bretzel,  434. 
Leque  v.  Smith,  8,  668. 
Lerow  v.  Wilmarth,  189,  437,  717. 
Le  Roy  v.  Dunkerly,  315. 
Lesem  v.  Herriford,  457. 
Lesher  v.  Getman,  557. 
Leukener  v.  Freeman,  245. 
Levy  v.  James,  547. 
Levy's  Accounting,  550. 
Lewis,  Matter  of,  551. 

v.  Burnham,   274. 

v.  Caperton,  428. 

v.  Castleman,  212. 

v.  Miller,  548. 

v.  Palmer,  222,  223. 

v.  Rogers,  146,  476. 

v.  St.  Albans  Iron  &  Steel  Works. 
290. 

v.  Shainwald,  131. 

v.  Simon,  203. 

v.  Smith,  122. 

v.  Wilcox,  462,  490. 
Lexington  v.  Butler,  263. 
Lichtenberg  v.    Herdtfelder,    140,    145, 

151,  155,  156,  225,  233,  710. 
Lidderrla.le  v.  Robinson,  348. 
Lightfoot  v.  Wallis,  618. 
Lillard  v.  McGee,  39,  221,  244. 
Lillie  v,  Wilson,  133. 
Lillis  v.  Gallagher,  725. 
Liming  v.  Kyle,  4:4. 
Lincoln  v.  Clarlin,  495. 
Lincoln's  Ex'x  v.  Foster,  371. 
Lindell  Real  Estate  Co.  v.  Lindell,  740. 
Lindle  r\  Neville.  409. 
Lindley  v.  Cross,  169. 
Lindsay  v.  Harrison,  661. 
Lindsey  r\  Delano,  475. 
Lingan  -■.  Henderson,  304. 


xlii 


ices]       TABLE    OF    CASES         [are  to  pages. 


Lininger  v.  Herron,  434. 

Raymond,  I 
Linn  v.  Wright,  i  =  . 
Linton  :-.  Butz,  403,  466. 
Lion,  The, 

Lionberger  r.  Baker,  414. 
Lipperd  : .  Edwards,  - 
Lippincott  v.  Evens   053.661. 
Lishy  : .  Perry,  31. 
Litchfield  1 .  White. 
Little  v.  Lichkoff,  495. 
Littleton  v.  Littleton,  543.  544. 
Livermore  v.  Boutelle    183,  222,  526. 

v.  McNair,  114. 

Northrup,  565    59S. 
Rhodes   605 
Livey  v.  Winton,  43;- 
Livingston  v.  Livingston,  223. 
Lloyd  : .  Fi  iley,  71  7. 

v.   Fulton,   29,   47,  113,  135,  1S6, 
i-7.   E88,  351,  376,  3S7,  437, 

v.  Passingham,  335. 
Load  v.  Green,  669. 
Lobstein  v.  Lehn,  340. 
Locke  v.  Lewis,  100. 
v.  Mabbett,  86. 
Lockhard   :■.    Beckley,    13,    15,  30,    33, 

'99.  365- 
Lockyer  v.  Savage.  647. 
Loehr  v.  Murphy,  187,  2or. 
Loeschi^k  v.  -Addison,  194. 

Bridge,  301,  427,  42S. 
Logan  v.  Brick.  17. 

.  Logan,  in. 
London  v.  Martin,  603. 
Long  -■.  Dollarhide,  529. 

:■.  Knapp,  4^5. 
Loomis  v.  Tifft,  156.  223,  724. 
Loos  v.  Wilkinson,  62,  232,  321,  340,  342, 

343.  345.  479>   1-7.   189,   t93,  559- 
Lord  ?■.  Bunn,  646. 

I  (evendorf,  562. 
i  .  I  [arte,  58,  72. 
Lord  Cranstown  v.  Johnston,  304. 
Lore  v.  Dierkes,  25,  225,  260,  343,   349, 

LoririL;  v.  Dunning,  415. 
I  Stanlej     -  7 . 

-<  r,  244. 
1  reyer.  330. 
.  M  ikals,  155. 
1  rillender,  640,  643, 
-.  ingsland,  640,  643. 
Bartlett,   1 5  (. 
.  Man  o,   107. 

Wortman,  416,  434,  703. 
.  Matson,  1-  1. 
Lowery  v.  Clinton,  =42. 
ry  v.  !'•'■'  kner,  15. 
I        ter,  230. 
v.  Fisher,  181. 
v.  Pinson,  221. 


Lowry  v.  Tew,  519. 
Lucas  v.  Brooks,  542. 
Ludlow  v.  McBride,  469. 

.  Simond,  312. 
Ludwig  *.  Highley,  468. 
Lukins  v.    Aird,   23,   25,   33,  355,  424, 

481  ,   621,   622,  034. 
Luna  v.  Inhab.  of    1  yngsborough,  488. 
Lush  v,  Wilkinson,  80. 
Lux  v.  Davidson,  143,  158. 
Lycoming  Rubber  Co.  v.  King,  425. 
I. veil  v.  Supervisors  of  St.  Clair,  269. 
Lyford  v.  Thurston,  S3. 
Lyman  z\  Place,  262. 
Lynch  z .  Crary,  ior. 

v.  Johnson,  115,  129,  130,  708. 
Lynchburg  Iron  Co.  v.  Taylor,  249. 
Lynde  v.  McGregor,  61,   127,  231,  406. 
Lynn  v.  Smith,  95. 
Lyons  r.  Leahy,  676,  68i. 

v.  Murray,   150. 
Lytle  v.  Beveridge,  656,  657,  658. 

Maass  v.  Falk,  221,233,  602,  603,704,708. 
McAfee  v.  McAfee,  292. 
McAllaster  v.  Bailey,  151. 
McAlpine  v.  Sweetser,  736. 
McAninch  v.  Dennis,  278. 
McArtee  v.  Engart,  296. 
McArthur  v.  Hoysradt,  66,  341. 

v.  Scott,  249. 
McAuliffe  7 .  Farmer,  140. 
McBurney  v.  Wellman,  423. 
McBurnie,  Ex  parte,  383,  536. 
McCabe  7'.  Brayton,  501. 
McCaffrey  v.  Hickey,  335. 
McCain  v.  Wood,  394. 
McCall  v.  Pixley,  227,  243. 
McCalmont  7'.  Lawrence,    176,178,214, 

316. 
McCanless  7'.  Flinchum,  376. 
McCarron  v.  Cassidy,  423. 
McCarthy  v.  Goold,  67. 

7'.  Scanlon,  329. 
McCartin  v.  Perry,  230. 
McCartney    v.  Bostwick,  in,   153,  165, 

177- 
McCarty  7-.  F"letcher,  430. 
McCaskle  v.  Amarine,  394. 

.   Rhodes,  297. 
Ml  Clair  ■■.  Wilson.  354. 
McClaugherty  r.  Morgan,  193. 
McCleary  v.  Ellis,  639. 
McCleery  v.   Allen,  584. 
McClellan  v.  Pyeatt,  37. 

-,'.  San  ford,  13. 
McCleskey  v.  Leadbetter,  717. 
McClintock  v.  Loisseau,  718. 
McCloskey  i>.  Stewart,  63. 
McClure  v.  Cook,  659. 

v.  Goodenough,  560. 

v.  Smith,  424. 
McClurg  v.  Lecky,  575. 
McCluskey  v.  Cromwell,  46. 


References']       TABLE    OF    CASES.       [are  t 


Xllll 


McCole  v.  Loehr,  278. 
McConihe  v.  Derby.  320,  551,  625. 
McConnel  v.  Dickson,  223. 
McConnell  v.  Barber,  3S7. 

v.  Citizens'  State  Hank,  278. 

v.  Scott,    223,  391. 

v.  Sherwood,  557,  567,  590,  611. 
McCool  v.  McNamara,  336. 
McCormick  v.  Atkinson,  35. 

v.  Hyatt,  357. 

v.  Joseph,  370. 
McCrasly  v.  Hasslock,  620. 
McCrea  v.  Purmort,  396. 
McCreary  v.  Skinner,  618. 
McCulloch  v.  Hutchinson,  45. 
McCulIough  v.  Colby,  175,  176. 

v.  Gilmore,  641,  643. 
McCutcheon's  Appeal,  57. 
McDermott  v.  Blois,  140. 
McDermutt  v.  Strong,  130,  169,  217. 
Macdona  v.  Svviney,  446. 
McDonald  v.  Bowman,  492. 

v.  Cash    563. 

v.  Farrell,  439. 
McDonnell  v.  Eaton,  2SS. 
McDonogh  v.  Murdoch,  640. 
McDougall  v.  Page,  123,  51S. 
McDowell  v.  Brown,  640. 

v.  Cochran,  166. 

v.  Goldsmith,  146. 

v.  Rissell,  497. 
McElfatrick  v.  Hicks,  491. 
McElmoyle  v.  Cohen,  154. 
McElwain  v.  Willis,   143,  172,  173,  175, 

271. 
McEvony  v.  Rowland,  435,  502. 
McEvoy  v.  Appleby,  84,  85,  650,  661. 
McEwen  v.  Brewster,  661. 
McFadden  v.  Mitchell,  190,  413,  415. 
McFarland  v.  Bate,  563,  564. 

v.  Goodman,  31,  92. 
McFarlane  v.  Griffith,  137. 
McFerran  v.  Jones,  67. 
McGahan  v.  Crawford,  61. 
McGarvy  v.  Roods,  392. 
McGay  v.  Keilback,  80. 
McGee  v.  McGee,  543. 
McGhee  v.  Importers'  &  T.  Nat.  Bank, 

140,  451. 
McGintry  v.  Reeves,  394. 
McGlinsey's  Appeal,  536. 
McGoldrick  v.  Slevin,  332. 
Macgregor  v.  Dover  &  Deal  R.  R.  Co., 

57o,  572. 
McGuire  v.  Miller,  717. 
Mcllhargy  v.  Chambers,  551,  554. 
Mcllvaine  v.  Smith,  65,  660. 
Mcintosh  v.  Ladd,  544. 

v.  Smiley,  461. 
Mackason's  Appeal,  76. 
Mackay  v.  Douglas,  203. 
MacKaye  v.  Soule,  334. 
McKeeV  Judd,  552,   553. 
Mackellar'^.  Pillsbury,  368,  405,  451. 


McKenna  v.  Crowley,  [31,  221 
McKenzie's  Appeal,  <4<>. 

McKeown  v.  Allen,  355,    ■ 

McKibbin  v.   Martin  1.03.431, 

453.  463.  466. 
Mackie  7-.  Cairn-,  6 
McKim  ?'.   rhompson,  304. 
McKinley  v.  Bi  >\\  e,  1  i- 1. 
McKinney  :•.  Wade,  425. 
McKinnon    t.    Reliance   Lumber   Co., 

489. 
McKinster  v.  Babcock,   396 
McKnight  v.  Morgan,  224,  225. 
McKown  v.  Furgason,  4-2. 

7\  Whitmore,  285. 
McLachlan  v.  Wright,  619. 
McLain  v.  Ferrell,  2^4. 
McLane  v.  Johnson,  196,  224,  489. 
McLaughlin  v.  McLaughlin,  224. 
McLean  v.  Cary,  313,  325. 

v.  Clapp,  698. 

v.  Lafayette  Bank,  288,  623. 

7'.  Letchford,  309,  345. 

7'.  Meek,  154. 

v.  Weeks,  45. 
McLendon  v.  Commrs.  of  Anson,  170. 
McLeod  v.  First  Nat.  Bank,  83. 
McLure  v.  Benini,  172. 
McMahan  v.  Bowe,  31. 
McMahon  7'.  Allen,  231,  247. 
McMaster  v.  Campbell,  230,  718. 

v.  Morrison,  64  <. 
McMillan  r.  Knapp,  610. 

7'.  McNeill,  517,  518. 
McMinn  7-.  Whelan,  140,  159. 
McMurtrie  7-.  Riddell,  377. 
McNally  v.  City  of  Cohoes.  (.7.;. 
McNaney  v.  Hall,  565. 
Macomber  v.  Peck,  25,  4S0. 
McPherson  v.  Kingsbaker,  i<)4.  204. 
McRea  v.  Branch  Bank  of  Ala.  426. 
McReynolds  7'.  Dedman,  573. 
Macungie  Sav.  Bank  :.  Bastian 
McVeagh  v.  Baxter,  432. 
McVeigh  v.  Ritenour,  183. 
McVicker  7'.  May,  434- 
McWilliams  v.  Cornelius,  577. 

7'.  Rodgers.  420. 
Maders  v.  Whallon,  7.   tog,   IIO. 
Magawley's  Trust,  209. 
Magee  v.  Badger,  ''-7. 
Magirl  v.  Magirl,  433. 
Magniac   v.    Thompson,    3- 

593,  689. 
Maher  7'.  Hibernia  Ins.  Co.  271.. 
Mahler  v.  Schmidt.  250,  252. 
Mahr  7'.  Norwich  Union  F.  I.  S<"  ..  250, 

258. 
Maiders  v.  Culver's  Assignee,  231. 
Main  7'.  Lynch,  557. 
Malcolm  7'.  Hodges,   20. 
Malony  7'.  Horan,  545. 
Manbv   :■.  Scott,  2. 
Manchester  v.  McKee,  151. 


xliv 


-,J         TABLE     OF    CASES.         [are  to  pages. 


Manchester  v.  Tibbeus.  386,   522,  523. 

524. 
Mandei  i .  Peay,  558. 
Mandeville  v.  Avery,  in.   234,  235.  342. 
33- 
.  Rej  w  Ids,  14''-  47''- 
Mandlebaum  v.  McDoneil,  640,  041. 
Mangum  v.  Finucane 

ittan  Co.  :.  Evertson,  30- 
Manikee  \ .  Heard.  543. 
Manley  v.  Rassiga,  234. 
Mann  :  .  Appel,      - 

Manning  v.  Beck,  318,  597,  603,  708. 
Carruthers,  527. 
v.  Chambers,  (47. 

I  [ayden,  516. 
: .  Reilly,   353. 
: .  Riley,  53s. 

San  [acinto  Tin  Co.,  694. 
Mansell  v.  Mansell,  \;. 
Mansfield  :.  Dyer,  666. 

rst  Nat.  Bank,  232. 
Manton  v.  Moore,  443.  45-. 
Manufacturers'  Bank  r.  Rugee,  452. 
Manufacturing  Co.  v.  Bradley,  113,  121, 

141. 
Mapes  v.  Scott.  335. 
Mapleback,  ///  r< .  723. 
Marcy  v.  Kinney,  133. 
Marden  v.  Babcock,  362. 
Mark's  Appeal,   592. 
Markey  v.  I'mstattd,  461. 
Marks  v.   Bradley,   354,   389,   562,  568, 

Marksbury  v.  Taylor,  15,  9S. 
Marmon  v.  Harwood,  353,  362,  363. 
Marrin  v.  Marrin,  319. 
Marriott  :.  Givens,  407. 
Marsh,  Matter  of,  553. 
v.  Bennett,  556. 

.  1  tenson,  55. 
v.  Burroughs,  68,  84,  220,  260. 
v.  Dunckel,  4- 1 . 
-  Falker,  10,  12. 
v.  Bier,  140. 
Marshall  v.  Croom,  61,  204,  435,  477 
431. 
- .  Means,  - 

V.    Roll,  "2  12. 

-■.  Sherman,  269. 
v.  Van  De  Mark,  6 
v.  Whitney,   [I 
Marston  v.  Dresen,  275,  534. 

:■.  Vultee 
Martin  v.   \dams,  464. 
•lton,  224. 
I  ;■ .  .'.  .  ; 
I  • 
!  I 
I  llden,  164, 

,-2. 
,  I  l.i  .  man 
v,  Kunzmullei 
v.  Margham,  647. 


Martin  r.  Marshall,  688. 

:.  Martin-Wilson,  etc.,  Co.,  III. 

v.  Michael,  140,  144,  159. 

v.  Root,  So,  224. 

v.  Smith,  284. 

v.  Tidivell,  113,  121. 

v.  Walker.   183,  223. 
Martin-Benin    Merc.    Co.    v.    Berkins, 

619. 
Martindale   z\  Booth,  447. 
Marx  r\  Tailer,  260. 
Maryland  Grange  Agency  v.  Lee,  658. 
Mason  v.  Franklin,  406. 

?'.  Lord,  247. 

v.  Bierron,  322,  323. 

v.  \'estal.  37,  274. 
Massey  v.  Yancey,  538. 
Massie  v.  Walts,  74. 
Masson  v.  Bovet,  349. 
Masterson  -'.  Little.  516. 
Masterton  -■.  Beers,  352. 
Mateer  v.  Hissim,  437. 
Mathes  v.  Dobschuet/.,  61,  358. 
Mathews  v.  Feaver,  379,  412, 

7 .  Baradise,  660. 

v.  Boultney,  557,  564. 

v.  Reinhardt,  7,  413,  414. 
Matson  v.  Melchor,  187. 
Matthai  v.  Heather,  7,  204. 
Matthews  v.  Ott,  550. 

v.  Rice,  358. 
Mattingly  v.  Nye,  146,  205,  540. 
Mattison  v.  Judd,  610. 
Maule  v.  Rider,  694. 
Mawman  v.  Tegg,  73. 
Maxwell  v.  Kennedy,  510. 
May  v.  first    Nat.  Bank,  551. 

7\  Greenhill,  332. 

7'.  Le  Claire,  694. 

7 .  State,  Nat.  Bank,  195,  197,  199. 

7.  Tenney,   548. 

v.  Walker,  577. 
Mayer  v.  Clark,  102,  44S,  451. 

7'.  Hellman,   548,  599,  704. 

7'.  Webster,  400. 
Mayers  v.  Kaiser,  95,  532. 
Maynard  v.  Cleaves,  644,  660. 
Maynes  v.  Atwater,  469. 
Mayor  of  New  York  v.  Brady,  476. 
Mays  -.'.  Rose,  335. 
Meacham  v.  Sternes,  556. 
Mead  "\  Combs,  353. 

v.  Dowd,  573. 

7'.  Gardiner,  450,  451. 

v.  Noyes,  429,  459. 

v.  Phillips,  556. 
Meade  v.  Smith,  453,  460. 
Meader  v.  Norton,  507. 
Means  v.  Dowd,  26,  27,  33,  35,  620,  625. 

v.  Hicks    474.  477- 
Mebane  v.  Lay  ton,  217. 

v.  Mebane,  '4,  65,  657,  659. 
Mechanics'  &   T.    Bank  v.  Dakin,  103, 
no,  173,  174. 


References']       TABLE    OF    CASES.        f are  to  Pages. 


xlv 


Meddowcroft  v.  Iluguenin,  29. 
Medsker  v.  Bonebrake,  525. 
Meeker  v.  Harris,  146.  150,  274,  476. 
v.  Saunders,  433. 
r .  Wilson,  446. 
Megehe  v.  Draper,  92. 
Mehaffey's  Estate,  662. 
Mehlhop  v.  Pettibone,  357,  47-. 
Meigs  v.  Weller,  343. 
Melbye  v.  Melbye,  725. 
Melville  v.  Brown,  159. 
Memphis  &  L.  R.  R.  v.  Dow,  348. 
Menagh  v.  Whitwell,  339,  389. 
Menken  Co.  v.  Brinkley,  641. 
Menton  v.  Adams,  706. 
Menzies  v.  Pulbrook,  247. 
Mercantile  Trust  Co.  v.  Wood,  625. 
Mercer  t.  Mercer,  717. 

v.  Peterson,  714. 
Merchant  v.  Bunnell,  532. 
Merchants'  Bank  v.  Thomson,  122,  545. 
Merchants'  Exch.  Nat.  Bank  v.  Comml. 

Warehouse  Co.,  506. 
Merchants'    Nat.    Bank   v.    Paine,  144, 

155,  169. 
Merchants'  &  M.  Saw  Bank  v.  Lovejoy, 

63- 
Merchants'    &    M.    Tr.  Co.  v.  Borland, 

56,  57,  156. 
Meredith  v.  Johns,  119. 
Merrell    v.  Johnson,  190,  270,  278,  349. 
Merriam  v.  Sewall,  160. 
Merrick  v.  Butler,  722. 
Merrill  v.  Englesby,  555. 

v.  Grinnell,  553. 

v.  Locke,  416,  426,  468. 
Merriman  v.  Chicago,  etc.,  R.   R.  Co., 

219. 
Merry   v.    Fremon,    156,    166,  223,  255, 

264,  724. 
Mertens  v.  Welsing,  414,  426,  431. 
Merwin  v.  Richardson,  221. 
Messersmith  v.  Sharon  Sav.  Bank,  131. 
Messmore  v.  Huggard,  128. 
Metcalf  v.  Munson,  484,  4S7. 

v.  Watertown,  142. 
Metropolitan  Bank  v.  Durant,  319,  415, 
505. 

v.  Godfrey,  670. 

v.  St.  Louis  Dispatch  Co.,  516. 
Metropolitan  Nat.  Bank  v.  Rogers,  194, 

230. 
Meux  v.  Anthony,  140,  169,  178. 

v.  Howell,  43,  412. 
Meyer  v.  Lowell,  82. 

v.  Virginia  &  T.  R.  R.  Co.,  490. 
Michael  t.  Gay,  309. 
Michoud  v.  Girod,  516. 
Micou  v.  Moses,  332,  336. 

v.  National  Bank,  706. 
Middleton  v.  Sinclair,  435. 

v.  Taber,  550. 
Middletown    Sav.    Bank  v.  Bacharach, 
288. 


Miers  :.  Zanesville  &  M.  Turnp.  Co., 

68,  709. 
Miles  v.  Barry,  514. 
I  delen,  497. 

v.  Miles,  304. 
Miller,  Matter  of,  46. 
v.  Bryan.  357. 
v.  Campbell,    56. 

7'.    COX,    524. 

7.  Davidson,   131,   169. 

■  .  Dayton,  [28,  183. 

7.  Parle,  319. 

v.  Florer,  81. 

v.  Fraley,  308. 

7'.  Garman,  461. 

v.  Hall,  251,  254.  257,  265. 

7'.  Hanley,  474,  494. 

7.  Hilton,  1S1. 

v.  Jamison,  249,  294. 

v.  Jones,  626,  628,  635. 

v.  Lacey,  454.  46C. 

v.  Lehman,  279. 

v.  Lockwood,  407,  450,  630. 

v.  Long  island  K.  R.  Co.,  459. 

v.  McCoy,  396. 

v.  Mclntyre,  516. 

v.  Mackenzie,  236. 

v.  McKenzie,  396. 

v.  Miller,  45,  87,  140,  211,  545. 

ads.  Pancoast,  446,  451,  459,  626. 

v.  Post,  570,  572. 

v.  Sauerbier,  391. 

v.  Sherry,  129,  295,  296,  739. 

v.  Wilson,  437,  544. 
Millholland  7'.  Tiffany,  6^9,  692. 
Millington  7'.  Hill,  340,  342,  670. 
Mills  v.  Argall,  717. 

v.  Block,  125,  140,  159. 

v.  Gore,  304. 

v.  Howeth,  690. 

v.  Parkhurst,.  233,   547,  552,  613. 

v.  Pessels,  5S9. 

7'.  Thompson,   492. 

v.  Van  Voorhies,  134. 
Milwaukee   Harvester   Co.   t.   Culver, 

532. 
Milwaukee  &  M.R.R.Co.r.  Milwaukee 

&  W.  R.  R.  Co.,  247. 
Minchin  7'.  Minchin,  736. 
Miner  v.  Lane,  107,  108. 

v.  Phillips,  371. 

V.  Warner,    I  S3. 
Minor  v.  Mead,  228. 
Mish  v.  Main,  484. 
Mississippi  Mills  v.  Cohn, 
Missouri   L.  M.   <\:   S.  Co.  v.  Reinhard, 

241. 
Mitchell  v.  Barnes,  335. 

v.  Bunch,  739. 

v.  Mitchell,  410,  4S1. 

v.  Stetson,  34. 

v.  Stiles,  319. 

7'.  Thompson,  514. 

v.  Van  Buren,  319. 


X1V1 


TABLE    OF    CASES.       [are  towages. 


Mitchell  v.  West.  451,  466. 
Winslow,  230,  626. 
Mittnacht  1 .  Kelly.  621,  622. 
Mobile  Sav.    Hank   v.   McDonnell,    11. 

477.  493- 
Mobley  v.  Letts.  619. 
Mohawk  Bank  r,  18, 176,  361, 

Molitor  v.  Robinson,  451,  49S. 
Moncure  1 .  Hanson,  231. 
Monell  v.  Scherrick,  410. 
Monroe  v.  Douglass,  124. 
.   I  [ussey,  44().  453- 

Smith,  212,  366. 
.    rrenholm,  659. 
Monti      •  Behrens,  647. 

Montefiori  .  .  Montefiori,  71S. 
Monteith  r.  Bax,  20.  352,  36S,  531. 
Montgomery  v.  Bayliss,  367. 
Goo   ba  ,  610. 
Kirksey,  593. 
Montgomery  Web  Co.  v.  Dienelt,    15, 

240.  241,  401. 
Moody  v.  Burton,  118. 
Moog  v.  Benedicks,  409,  451. 
.  Farley,  435. 
v.  Talcott,  293. 
Mooney  v.  Olsen,  442,  469. 
Moore  ? .  Blondheim,  2114. 
<  a  ird,  245. 
V.  Eastman,  644. 
v.  Flynn,  92. 
v.  Greene,  284,  2S6,  513. 
v.  Griffin.  607. 
v.  Hinnant,  43,  353- 
?•.  Jordan,  730. 

V.    Kidder,    Ki2. 

v.  Meacham,  4S7. 
v.  Meyer,  596. 
v.  Page,  522,  534,  53S. 
7  .   Roe,  424,  -439. 

7'.  Schoppert,  144. 

7 .  Shields,  495. 

v.  Stege,  557,  012. 

7'.  United  States,  400. 

V.  Williamson,  96,  075,  GSl. 

7'.  Wood,   19,  24,  48  I  . 
1   Moorer  v.  M<  m  irer]  232. 
Moores  \  •.  White,  68. 
Moorman  v.  Shockney,  272. 

v.  I  >awes,  100,  143. 
Mori  in-., d    Banking  Co.   v.   Whitaker, 

Moreland  v.  Ati  hison,  379. 
Morford  v.  Dieffenbacker,  431. 
Morgan,  In  n  . 

ibott,  1  --.  723. 
7 .  Ball,  J57- 

Bogue,  172.  280,  576. 
Elam,  21). 
v.  I  [arris 
1  lei  ki  1 
v.  Worden 
,n  County  v.  Allen,  131. 


Morit/.  v.  Hoffman,  1S9,  209,  211. 

v.  Miller,  337. 
Morland  v.  Isaac,  542. 
Morrill  v.  Kilner,  20. 

7'.  Little  Falls  Mfg.  Co.,  2S4. 
Morris  7\  Lindauer,  347,  6S9. 
v.  Morris,  224. 
7.  Tillson,  396. 
Morris  Canal  &  B.  Co.  v.  Stearns,  416. 
Morrison  v.  Abbott,  92. 

v.  Atwell,  184,  213,  214,  242. 
v.  Clark.  437,  540. 
v.  Morrison.  183,  222,  244. 
v.  Oium,  45S,  463. 
Morrow  Shoe   Mfg.   Co.   7'.    New  Eng- 
land Shoe  Co.,  359,  6S9. 
v.  Peabody,  139. 
Morse  v.  Hill,  303. 

7'.  Riblet,  135. 
Morton  7'.  Morris,  354. 
v.  Noble,  545. 
v.  Ragan,  31,454. 
v.  Weil,  2S9. 
Moseley  v.  Anderson,  92. 

v.  Moseley,     214,    225,    242,    723, 
726. 
Moses  v.  Micou,  659. 
Motley  v.  Downman,  72. 

v.  Sawyer,  415,  416. 
Mott  v.  Danforth,  120. 
Mountford  v.  Taylor,  2S1. 
Movius  v.  Lee,  262. 
Mowry  v.  Agricultural  Ins.  Co.,  391. 

7'.  Schroder,  11S. 
Mover  v.  Dewey,  229,  230.  235. 
Muchmore  v.  Budd,  575. 
Muggeridge's  Trusts,  A'r.  647. 
Mulford  7.  Peterson,  4S,  97,  107,  108. 

v.  Shirk,  89,  574. 
Mull  v.  Dooley,  421. 
Mullanphy  Sav.  Bank  v.  Lyle,  701. 
Mullen    7.    Wilson.    1S9,    199,   204,  206, 

366. 
Muller  v.  Balke,  717. 

v.  Inderreiden.  31,  92. 
7\  Norton,  [g,  348. 
Mulloy  7'.  Voung,  610. 
M  ulock  v.  Wilson,  247. 
Multnomah  St.  Ry.  Co.  v.  Harris,  176. 
M  umper  i  ■.  Rushmore,  450. 
M  unger  v.  Perkins,  545. 
Municipal  Ins.  Ci  .  v.  Gardiner,  739. 
Munn  7.  Marsh,  204. 
Muni)/  7'.  Wilson,  350. 
M  unro  7'.  Alaire,  61  '7. 
Munroe  7\  Hall,  6  $9,  040. 
Munson  r\  Arnold,  413. 

v.  Carter,  88. 
Murphy,  In  re,  647. 

7 .  Briggs,  320,  347,  350,  666,  670. 

671,  7"4- 
v.  Crouch,  31. 
7'.  Hubert,  734. 
Murray  v.  Ballou,  297. 


References']       TABLE    OF    CASES.        [are towages. 


xlvii 


Murray  v.  Briggs,  267,  268. 

v.  Burtis,  368. 

v.  Fox,  252. 

v.  Green,  640. 

v.  Hay,  215. 

v.  Judson,  506. 

v.  McNealy,  458. 

v.  Murray,  544. 

v.  Riggs,  634,  702. 

v.  Rottenham,  517. 

v.  Walker,  423. 
Murtha  v.  Curley,  293,  294,  324,  330. 
Musselman  v.  Kent,  in, 
Mutual  Life  Ins.  Co.  v.  Bowen,  121. 

v.  Shipman,  117. 
Myers  v.  Becker,  321,  555. 

v,  Davis,  562. 

v.  Estell,  336. 

v.  Fenn,  220. 

v.  Harvey,  469. 

v.  Sheriff,  8,  274. 

Nadal  v.  Britton,  358,  418. 

Naglee's  Appeal,  640. 

Nail  v.  Punter,  77. 

Nairn  v.  Prowse,  383. 

Nance  v.  Nance,  88,  382,  530. 

Nantes  v.  Corrock,  58,  67. 

Nantz  v.  McPherson,  689. 

Nash  v.  Geraghty,  213. 

National  Bank  v.  Barkalow,  274,  347 

v.  Beard,  489. 

v.  Carpenter,  284,  511. 

v.  Dillingham,  269. 

v.  Insurance  Co.,  83. 
National  Bank  of  Balto.  v.  Sackett,  564. 
National       Bank      of      Metropolis      v. 

Sprague,  203. 
National   Bank  of  Oshkosh  v.  National 

Bank  of  Ironwood,  485. 
National   Bank  of   Republic  v.  Dickin- 
son, 523. 

v.  Hodge,  589. 
National  Bank  of  Rondout  v.  Dreyfus, 

142. 
National  Bank  of  Troy  v.  Scriven,  561. 
National   Bank  of  West  Troy  v.  Levy, 

151,  156,  225. 
National  Butcher's  &  D.  Bank  v.  Hub- 
bell,  560,  561,  569. 
National  Park  Bank  v.  Goddard,  163. 

v.  Lanahan,  no. 

v.  Whitmore,    578,   604,  605,  613, 

713- 
National   Shoe   &    L.  Bank  v.  August, 

634- 

National  Tel.  Mfg.  Co.  v.  Du  Bois.  54. 

National  Tradesmen's  Bank  v.  Wet- 
more,  100,  106,  144,  149,  155,  166, 
168,  169,  225. 

National  Trust  Co.  v.  Miller,  239. 
v.  Murphv,  239. 

National  Tube  Works  Co.  v.  Ballou,  172. 

Neal  ?'.  Clark,  339. 


Neal  v.  Foster,  492,  493,  71  »>. 

v.  Williams,  45. 
Neale  v.  Day,  64. 

v.  Neales,  295. 
Neate  v.  Marlborough,  127. 
Ni  civ  v.  Jones,  220. 
Neisler  v.  Harris,  369. 
Nellis  :■.  Clark,  37,  722,  726. 
Nelson  v.  Edwards,  615. 

v.  Frey,  90. 

v.  Henry,  421. 

v.  Kinney,    706. 

v.  Smith,  482. 
Neppach  v.  Jones,  510 
Nerac,  Matter  of,  58. 
Neslin  v.  Wells,  422. 
Neuberger  :\  Keim,  181,  193,  195,  198, 

203,  204,  205,  366. 
Neusbaum  v.  Keim,  150. 
Nevers  n.  Hack,  278,  279,  482. 
Neville  t'.  Wilkinson,  719. 
New  v.  Bame,  334. 
New  Albany  v.  Burke,  237,  694. 
New  Albany  Ins.  Co.  -•.  Wilcoxson,  451. 
Newark  v.  Funk,  58,  67. 
New  Bedford  Inst,  for  Savings  v.  Fair- 
haven  Bank,  34S. 
Newdigate  v.  Jacobs,  149,  150. 
Newell  v.  Cutler,  117. 

v.  Newell,  717. 

7'.  People,  46. 
Newkerk  v.  Newkerk,  640. 
Newland,  Re.  542. 
Newlin  v.  Lyon,  493,  495. 
Newlove  v.  Callaghan,  64. 
Newman    :>.  Black,  595. 

v.  Clapp,  611. 

v.  Cordell,    14,    16,    30,    280,  352, 
432. 

7'.  Kirk,  402,  407. 

v.  Van  Duyne,  270. 

v.  Willetts,  130,  172,  176. 
New  Orleans   Pac.    Ry.  Co.  v.  Parker, 

740. 
Newton  v.  Bronson,  738. 
N.    Y.    Commercial   Co.   v.   Carpenter, 

476. 
N.  Y.  Guaranty  &  Ind.  Co.  r.  Gleason, 

495,  4a6- 
N.  Y.  Life   Ins.  Co.  v.  Mayer,  313,  314. 
N.    Y.    Mutual    Life    Ins.    Co.    v.  Ann- 
strong,  45,  400. 
N.  Y.  &  Harlem  R.  R.  Co.  v.  Kyle,  4:>>. 
N.    Y.  &    New    Haven    R.    R.    Co.    v. 

Schuyler,  219,  263,  288. 
Nicholas  7\  Murray,  229. 
Nichols  v.  Eaton,  59,  65,  85,  87,  B8,  91, 
636,   643,   044,  645,  (.47 
650,653,  654,  657,  658,  61 
v.  Ellis,  364. 
7'.  Lew,  59.  64,  65,   135.  313.  '   '  '■ 

661. 

-    r.  McCarthy,  72; 
7'.  McEwen,  550,  589 


xlviii 


v«]        TABLE    OF    CASES.        \_are  to  pages. 


Nichols  v.  Patten.  7,  45,  4(4.  717. 

: .  Pinner,  279. 

- .  Wallace,  537. 
Nicholson  v.  Condon,  690. 

v.  Leavitt,  26,  551,  556,  575,  584, 
631. 
Nickell  v.  Handly,  651 ». 
N  .  Crittenden,  12,  20,  671. 

ty  v.  Mallery,  474,  497. 
Nicoll  v.  Boyd,  337. 

-4. 
Nightingale  v.  Harris,  567. 
Nimmo  v.  Kuykendall,  365. 
Nininger  v.  Knox.  4^4. 
Nippes'  Appeal,  56,  541. 
Niver  v.  Crane,  107,  III,  165. 
Noble  v.  Hammond,  29,  339,  51S. 

v.  I  lines,  278,  519. 

v.  I  lolmes,  143,   158. 
.  Noble,  717." 
Noonan  v.  Lee,  274. 
Norcutt  v.  Dodd,  51,  5S. 
Nordlinger  v.  Anderson,  389,  562,  563. 
Xurfdk  &  W.  R.  R.  Co.  v.  Read,  552. 
Norris  v.  Haggin,  50S,  513,  690. 

v.  Lake,  8,  408,  451. 
North  v.  Bradway,  104,  215,  251,  290. 
North   Amer.  Fire  Ins.  Co.  v.  Oraham, 

155,  157.  '75.  176. 
Northcote,  /;/  re,  640. 
Northwestern  Iron  Co.  r.  Central  Trust 

Co.,    128. 
Norton  v.  Doolittle,  453,  461. 

v.  Matthews,  589,  6l<  1. 

v.  Norton.  209,    224. 
Norwalk  v.  Ireland,  526,  527,  52S. 
Norwegian  Plow  Co.  v.  Hanthorn. 
Noyes  v.  Hall,  698. 

v.  Morrill,  491. 

r.  Sanger  Bros.,  590. 
Nuckolls  v.  Pinkston,  4^3. 
Nudd  v.  Hamblin,  285. 
Nugent  v.  Nugent,  140. 
Nunn  7 .  \Vilsmore,  412. 

Oatis  v.  Brown,  492,  493. 
Oberholscr  v.  (ireenfieid,  100. 

1  !k  it/.er  7\  Herzen,  454. 
< )'  Brien  v.  Browning,  314. 
7\  Chamberlain,  470. 
■  alter,  155,  169. 
,  Fitzgerald,  295. 
7\  Whigam,  1 
Ocean    Nat.    Bank    v.  Olcott,    108,   160, 

163,   i','.,   177. 
'1,  kerman  v.  Cross,  123,  614. 
mnell  v.  Kilpatrick,  357. 
•  ner  v.  Ward,  729. 

.nor  v.  Boylan,i55. 
7\  (ii)T<ir<i 
'  >' Daniel  V.  Crawford,  209. 

'  1  I  tell  7\  Burnham,  513. 
Odell  v.  Flood, 

v.  Montross,  423. 


O'Donnell  v.  Barbey,  75. 

v.  Hall,  474,  491,  497. 

v.  Segar,  15,  91. 
Oelrichs  v.  Spain,  99,  113,  121,  178. 
Offutt  v.  King,  155. 
Ogden  7\  Arnot,  236. 

v.  Peters,  580,  599. 

v.  Prentice,  182. 

v.  Saunders,  517. 

v.  Wood,  84. 
Ogden  State  Bank  7\  Barker,  485,  488. 
Ogilvie  7\  Knox   Ins.  Co.,  68,  240,  241. 
O'Hare  7:  Duckworth,  4S8. 
Ohio  Coal  Co.  t'.  Davenport,  490. 
Ohm  v.  Superior  Court,  155. 
Old  Folks'  Society  v.  Millard,  312. 

<  (ldham  v.  Oldham,  647. 
Olive-Finnie  Grocer  Co.  v.  Miller,  577. 
Oliver  v.  King.  1S4. 

7\  Moore,  341,  397. 
v.  Pratt,  83,  2S8,  697. 
Oliver  Lee  &   Co.'s  Bank  v.    Talcott, 

23,  33- 
Olney  v.  Balch,  75. 

'  v.  Tanner,  234,  235,  239,  564,  591. 
Olson  v.  Scott,  7. 

Omaha  Hardware  Co.  r\  Duncan,  432. 
O'Mahoneyw.  Belmont,  339. 
O'Neil  v.  Birmingham  Brew.  Co.,  218. 

v.  Hudson  Valley  Ice  Co.,  81. 

v.  Patterson  &  Co.,  666. 

v.  Salmon,  562. 
Ontario  Bank  r\  Root,  274. 
Ordendorf  7\  Budlong,  96,  10S,  246. 
Oriental  Bank  r\  Haskins,  424,  722. 
Orman    r.    English    &    S.    Merc.    Inv. 

Trust,  620,  623. 
Orr  7'.  Gilmore,  316. 
Orton  z'.  Madden,  332. 

7\  Orton,  620. 
Orvis  7\  Powell,  650. 
Osborne  v.  Tuller,  453. 

v.  Wilkes,  c,4,  95,  531,  532. 

v.  Williams,  727,  729. 
Osen  v.  Sherman,  452,  457. 
Osgood  v.  Laytin,  234,  237. 

v.  Ogden,  237. 

7'.  Thorne,  703. 
Ostrander  ?'.  Weber,  219,  312. 
Otis  v.  Sill,  457. 

7'.  Spencer,  538. 
(  >tley  r\  Manning,  29. 
( >u  7'.  Smith,  312. 
Overman  7'.  Quick,  630. 
Overman's  Appeal,  662. 

<  )\  ermire  v.  Haworth,  168. 
Overton  v.  Holinshade,  410. 
Owen  v.  Arvis,  431,  564. 

v.  Body,   581. 
Ownes  7'.  Ownes,  725. 
Oxley  v.  Lane,  640,  641. 

Pabst  Brewing  Co.  v.  Butchart,  619. 
Pa<  e  v.  Pace,  654,  659. 


References']       TABLE    OF    CASES.       [are  to  pages. 


Pacific  Bank  7'.  Robinson,  74. 
Pack  v.  Bathurst,  76,  77. 
Packard  v.  Wood,  446.  449. 
Paddon  v.  Taylor,  666,  669. 
Page  v.  Dillon,  377. 

v.  Waring,  230,  673. 
Paget  v.  Perchard,  619. 
Pahquioque  Bank  v.  Bethel  Bank,  263. 
Paige  v.  Cagvvin,  490. 
Paine  v.  Lester,  614. 
Painter  v.  Drum,  498. 
Palen  v.  Bushnell,  105. 
Palmer  v.  Goodwin,  517. 

v.  Hawes,  89. 

v.  Myers,  564. 

v.  Whitmore,  77. 
Palmour  v.  Johnson,  424. 
Pancoast  v.  Gowen,  70. 

v.  Spovvers,  554. 
Pardue  v.  Givens,  640. 
Parish  v.  Lewis,  172. 

v.  Murphree,  189,  191. 
Park  v.  Battey,  380. 
Parker  v.  Browning,  236. 

v.  Conner,  666,  673,  675,  676,  6S1, 
683,  684,  686,  687,  691,  692, 
697. 

r.  Flagg,  224,  291. 

v.  Phetteplace,  135,  503. 

v.  Roberts,  354. 
Parkhurst  v.  McGraw,  7,  294,  302,  504. 
Parkinson   v.  Trousdale,  338. 
Parkman  v.  Welch,  196,  198,  303,  306. 
Parks  v.  Parks,  608. 
Parmenter  v.  Fitzpatrick,  450. 
Parrish  v.  Danford,  23. 
Parshall  v.  Eggert,  632. 
Parsons  v.  Bowne,  297. 

v.  Dickinson. 446. 

v.  Spencer,  654. 
Partee  v.   Mathews,  100,  108,  109,  176. 
Partelo  v.  Harris,  357. 
Parton  v.  Hervey,  570,  572. 
Partridge  i\  Cavender,  658,  660. 

v.  Gopp,  40,  80,  107,  380. 

v.  Stokes,  199,  366. 
Parvin  v.  Capewell,  539. 
Paschal  v.  Acklin,  738. 
Pashby  v.  Mandigo,  223. 
Pass  v.  Lynch,  213,  214. 
Passavant  v.  Bowdoin,  233. 

?'.  Cantor,  307,  604. 

v.  Sickle,  307. 
Patchen   v.  Rofkar,    145,    149,  151,  152, 

169. 
Patrick  v.  Grant,   599. 

v.  Riggs,  406,  618. 
Patten  v.  Casey,  355,  437. 

v.  Smith,  92. 
Patterson  v.  Bodenhamer,  409. 

v.  Brown,  709. 

v.  Lynde,  172,  253. 

v.  McKinney,  190,  326,  437. 
Pattison  v.  Letton,  419,  423. 
D 


Patton  7\  Conn,  ^23. 

v.  Royal   B.  I'.  Co.,  561. 

:■.  Taylor,  274. 
Paul  :■.  Crooker,  480,  4- 1 . 
Paulk  7\  Cooke,  209. 
Paulling  v.  Sturgus,   1 
Paulsen  v.  Van  Steenbergh,  142. 
Pawley  ■■■.  Vogel,  21 16. 
Paxton  ,-'.  Boyce,  1  1 . 

.  .  Smith,  452,  620. 
Payne  v.  Becker,  (><>,  117. 

v.  Drewe,  [36. 

v.  Eden,  712. 

v.  Graham,  132. 

v.  Hook,  239. 

.-■.   Miller,   542. 

v.  Sheldon,  144,  167,  176,  271. 

7\  Stanton,  201,  208. 

v.  W7ilson,  88. 
Payson  v.  Hadduck,  264. 
Peabody?'.  Knapp,  42S,  481. 
Peake  ?■.  Stout,  371. 
Pearce  v.  Creswiek,  113. 
Pearsall  7-.  Smith,  2S3,  507. 
Pearson  7\  Carter,  453. 

v.  Howe,  685. 
Pease  v.  Egan,  348,  349. 

v.  Shirlock,  3S1. 
Peaslee  v.  Barney,  223. 
Peay  v.  Morrison's  Ex'rs,  169. 
Peck  v.  Burr,  570,  572. 

v.  Crouse,  36S,  557. 

7'.  Hibbard,  517. 
Peebles  v.  Horton,  403,  406,  432. 
Peeler  v.  Peeler,  528,  529. 
Peet  v.  Morgan,  132. 
Peirce  v.  Partridge,  409. 
Peiser  v.  Peticolas,  20,  368,  620. 
Pelham  7'.  Aldrich,  182. 
Pence  v.  Croan,47,  18S,  190. 

7'.  Makepeace,  57. 
Pendleton  r\  Hughes,  183,  184,  244. 

7>.  Perkins,  58,  67,    14",    160.  709. 
Peninsular  Stove  Co.  v.  Roark,  92. 
Penn  v.  Lord  Baltimore,  738. 

v.  Whitehead.  94. 
Penn's  Ex'r  v.  Penn,  558. 
Pennell  v.  Deffell,  83. 
Pennington  7\  Clifton,  108. 

v.  Seal,  46,  51,  1S2,  223. 
Pennock  v.  Freeman,  514. 
Penrod  7\  Morrison,  120. 
Penzel  Grocer  Co.  v.  Williams,  610. 
People  v.  Albany  &  \'t.  R.  R.  Co.,  260. 

v.  Baker,  370. 

;■'.  Bristol.  626. 

v.  Chalmers,  550. 

{ex   rrl.    Hoyt)     7'.    Commrs.    of 
Taxes,  123. 

v.  Cook,  352. 

v.  Crennan,  46. 

v.  Dyle,  432. 

v.  Kelly,  339. 

v.  Mead,  115. 


1 


Rtferenet*\       TABLE    OF    CASES.        [are  to  pages. 


People  v.  Remington, 

.    I  ioga  Common  Fleas,  553. 
t-.  Utica  Ins.  Co.,  46. 
{ex  re/.  Cauffman)  v.  Van  Buren, 
102.  103,   1 10.   143,  144.    159, 

r<  1.   "■-.  I73i  175.  333- 

v.  Woodruff,  46. 
People's   Sav.  Hank  v.  Bates,  140,  167, 

626,  703. 
Pepper  v.  Carter,  200,  208. 
Percy  v.  Cockrill 
Perkins  v.  Center,  277. 

r.  Dickinson,  660. 

:.  Hays,   656. 

?■.  Hutchinson,   576. 

V.  Kendall,  150. 

V.  Perkins,  437,  540. 

7'.  Sanders,  253. 
Perry  v.  Corby,  594. 

7'.  Cross,  640. 

7'.  Ensley,  330. 

v.  Hardison,  407. 

-■.  Meddow  croft,  2g. 
Personette  v.  Cronkhite,  355,  368. 
Peters    v.    Bain.    I<),    23,  44,  47,  63,  268, 
34S.  558,  562. 

7'.  Goodrich,  674. 

v.  Light,  62. 
Peters-Miller  Shoe  Co.  v.  Casebeer,  490. 
Peterson  v.  Brown,  717,  734. 

v.  Schroeder,  502. 
Petree  v.  Brotherton,  1S2,  193,  279. 

Pettee    v.   Dustin.  634. 
Pettibone  v.  Stevens,  29. 
Pettit  7'.  Parsons,  558. 
Petty  v.  Petty,  134,  135,  543. 
Peyton  7'.  Lamar,  100. 

7 .  Rose,  105. 
Pfohl  7'.  Simpson,  220. 
Phalen  v.  Clark,  284. 
Pilaris  v.  Leachman,  264. 
Phelan  v.  Boylan,  247. 

7'.  Kelly,  469. 
Phelps  v.  Borland,  517. 

v.  Curts,  24,  229. 

v.  I  ■  ister,  i"".  101. 

V.  McDonald,  229,  230,  730. 

v.  Piatt,  156,  225. 

v.  Smith,  7,  377. 
Phenix   Ins.  Co.  v.  Fielder,  90,  717. 
Phenix    Nat.  Bank    v.  A.  P..  <  leveland 

Co..  267. 
Phettiplace  v.  Sayles,  190,  4O7 . 
Phifer  v.  Erwin,  370. 
Philbrook  v.  Eaton,  446. 
Phillips  v.  Frye,  524. 

v.  Kesterson,  426. 

?■.  Mullings,  77. 
;i  1. 

v.  Reitz,  452. 

.- .  Wooster,   184,    191,   205,    208, 
213,  733. 

Phinizy  v.  (lark,  402,  424. 

Phipps  7'.  Sedgwii  k,  -4,  326,  537,  545. 


Phceni.x  Bank  v.  Stafford,  207. 
Phoenix  Ins.  Co.,  Ex  parte \  740. 
Pickens  v.  Dorris,  660. 
Picket  7'.  Garrison,  1S3.     ♦ 
Pickett  v.  Pipkin,  272,  274,  409. 
Pickstock  v.  Lyster,  363,  600. 
Picquet   v.  Swan,  250. 
Pidcock  v.  Voorhies,  180. 
Piddock  v.  Brown,  479. 
Pier  v.  Duff,  490. 
Pierce  v.  Brew,  396. 

v.  Hill,  62. 

v.  Hoffman,  501. 

t'.  Hower,  271. 

v.  Kelly,  45S. 

v.  Milwaukee    Constr.    Co.,    68, 
218,  241. 

7'.  Wagner,  620. 
Pierce   Steam  Heating  Co.  v.  Ransom, 

605  713. 
Piercy  7'.  Fynney,  390. 

7'.  Roberts,  64. 
Pierson  :■.  Manning,  554. 

v.  Slifer,  357. 
Pierstoff  v.  Jorges,  147. 
Pike  t.  Bacon,  27,  600,  601. 

7'.  MiU-s,  31,  88. 
Pilling  7'.  Armitage,  304. 

7'.  Otis,  26,  403,  430. 
Pillsbury  v.  Kingon,  231. 
Pinckard  v.  Woods,  6S0. 
Pinckston  v.  Brown,  726,  729. 
Pine  v.  Rikert,  607. 
Piper  7'.  Hoard,  384. 

v.  Johnston,  93. 
Pitkin  v.  Mott,  533. 
Pitney  7\  Leonard,  674. 
Pitts  v.  Wilder,  733. 
Pittsburg     Carbon     Co.    v.    McMillin, 

234,  237,  238. 
Pittsriekl  Nat.  Bank  7\  Tailer,  271. 
Place  v.  Hayward,  725,  729,  730. 

7'.  Langworthy,  619. 

7.  Minster,  49(1. 
Planck  v.  Schermerhorn,  556,  610. 
Planters'  Bank  -<.  Willea  Mills,  26. 
Planters'  &  M.  Bank  7'.  Borland,  374. 

V.  Walker,  39.   III. 
Piatt  7'.  Hunter,  609. 

7'.  Jones,  69,  70. 

7.  Lott,  608. 

7 .  Matthews,  168. 

v.  Mead,  156,  166,   229,   276,  278. 

v.  Preston,  291. 

7'.  Routh,  77. 
Plimpton  v.  Goodell,   194,  419. 
Plumb  v.  Fluitt,  672. 
Plunkett  v.  Plunkett.  363,  419. 
Poillon  7'.  Lawrence,  518. 
Pollak  7'.  Searcy,  478. 
P(  illo<  k  v.  Jones,   379. 
Pomeroy  v.  Bailey,   188,   395,  437,   501, 
502. 

v.  Pomeroy,  543. 


References]       TABLE    OF    CASKS.       [are  to  pages. 


Pond  v.  Kimball,  93. 
Ponsford  v.  Hartley,  220,  264. 
Poole  v.  Mitchell,  470. 
Poore  v.  Clark,  250. 
Pope  v.  Allen,  442. 

v.  Cole,  115. 

v.  Solomons,  168. 

v.  Wilson,  19,  197. 
Pope's  Exrs.  v.   Elliott,  650,  657,  660. 
Pormann  v.  Frede,  476. 
Porter  v.  Goble,  534. 

v.  Green,  671. 

v.  James,  558. 

v.  Lazear,    545. 

v.  Lee,  660. 

v.  Pico,  315. 

v.  Pittsburg  Bessemer  Steel  Co., 
205. 

v.  Williams,   116,  234,  236,  237. 
Portland  Bldg.  Assoc,  v.  Creamer,  334. 
Post  v.  Bsrwind-White  C.  M.  Co.,  462. 

v.  Dart,  247. 

v.  Stiger,  51,  183,  244,  327,  527. 
Posten  v.  Posten,  437. 
Postlewait  v.  Howes,  167,  264. 
Potter  v.  Adams,  96. 

v.  Couch,  65,  639,  640,  641,  643. 

v.  Gracie,  32,  347,  385,  395. 

v.  Holland,  75. 

v.  MrDowell,    17,    19,    278,    353, 
355,  437.  488. 

v.  Payne,  368,  460. 

r.  Phillips,  255. 
Potts  z'.  Blackwell,   102. 

v.  Hart,  619,  623. 
Powell  v.  Howell,  55,  67,  142. 

v.  Ivey,  701,  719. 

v.  Spaulding,  216. 

v.  Waldron,  70,  71. 
Power  v.  Alston,  24. 
Powers  v.  Graydon,  184,  214,  242. 
Powles  v.  Dilley,  304. 
Prather  v.  Parker,  454. 
Pratt  v.   Burr,  93. 

v.  Chase,  517. 

v.  Curtis,  190. 

v.   Pratt,  8,  10,  502. 
Pray  -'.   Hegeman,  85. 
Pregnall  v.  Miller,  452. 
Preiss  v.  Cohen,  333. 
Premo  v.   Hewitt,  88. 
Prentice    v.  Janssen,  219. 
Prentiss  v.  Bowden,  142,  147,  155,  225. 
Prentiss  Tool  &  S.  Co.  v .  Schirmer,  450, 

460,  630. 
Presas  v.  Lanata,  132. 
Prescott  v.   Hayes,  424. 
Prestidge  v.  Cooper,  366,  672. 
Preston  v.   Crofut,  699. 

v.  Smith,  281. 

v.  South  wick,  450,  459. 

v.   Turner,  357. 
Preusser  v.  Henshaw,  704. 
Prevost  v.  Gratz,  282. 


Prewit    t.    Wilson,    199,    359,    374,  3S2, 

383,  384,  53o,  593.  690,  693. 
Price  ?'.  Haynes,  574,  ''"7. 

v.  Mazange,  ()_•'. 

v.  Pitzer,  35,  453. 

v.  Sanders,  271). 
Prickett  v.  Prickett,  392. 
Pride  :■.  Andrew,  732. 
Prime  v.  Brandon  Mfg.  Co.,  75. 

7'.  Koehler,  81. 
Primrose  v.  Browning,  531. 
Prince's  M.  P.  Co.  v.  Prince  Mfg.  Co., 

72. 
Pringle  v.  Phillips,  674,  687. 

v.  Pringle,  228. 
Pritchard  v.   Hailey,  640. 

v.  Norton,  123. 
Probst  v.  W'elden,  565,  609. 
Produce  Bank  v.  Morton,  150,  433,  555. 
Prosser  v.  Edmonds,  247,  736. 

v.  Henderson,  415. 
Prout  v.  Vaughn,  89. 
Prouty  v.  Prouty,  244. 
Pryor  v,  Downey,  573. 
Public    Works    r.    Columbia    College, 

140,  142,  296. 
Pulliam  v.  Newberry,  52. 

v.  Taylor,  176. 
Pullis  v.  Robinson,  210. 
Pulsifer  v.  Waterman,  55. 
Pulver  v.  Harris,  553. 
Purkitt  v.  Polack,  259,  426,  438. 
Pusey  v  Gardner,   7,  275,  434,  478,  504, 

512,  720. 
Putnam  v.  Bicknell,  529. 

v..  Hubbell,  557. 

v.  Osgood,  443,  635. 

v.  Reynolds,  419. 
Putney  v.  Fletcher,  225. 

v.  Whitmire,  740. 
Pyeatt  v.  Powell,  618. 

Quackenbos  7'.  Sayer,  505. 
Quarles  v.  Kerr,  635. 
Queen  (The).      See  Reg. 
Quimby  v.  Dill  211. 
Ouinby  v.  Strauss,  120,  325. 
Quincy  v.  Hall,  242. 
Quiriaque  v.  Dennis,  470. 
Quirk  v.  Thomas,  726. 

Radley  v.  Riker,  538. 
Railroad  Co.  7.  Howard,  240. 

v.  Soutter,  349. 

7'.  Trimble,  73. 
Raleigh  v.  Griffith,  571. 
Randall  v.  Bufnngton,  91. 

v.  Carman,  619.  622. 

v.  Howard,  724. 

7.  Vroom,  35. 
Randegger  v.  Ehrhardt,  489,  490. 
Randolph  v.  Daly,  257.  27J.  290. 
Randolph's  Exr.  7\  Quidnick  Co.,  509. 
Ranken  v.  Patton,  730. 


TABLE    OF    CASES.        [are  to  pages. 


Ranlett  v.  Blodgett. 

ee  ■.  Stewart,  185,  585,  606. 
Ratdifi  v,  Trimble,  11.  415. 
Rathbun  v.  Plainer,  559. 
Raventas  1 .  <  rreen,  471. 
Ravisies  1 .  Alston,   ; 
Rawley  v.  Brown,  442,  469. 
Raws*  m  v.  Fi  >x,  316. 
Rawson  Mfg.  Co.  v.  Richards,  44'). 
Kay  v.  Raymond,  454. 

v.  Roe  ex  dun.  Brown,  416. 

v.  Tea  bout,  301. 
Raymond,  Matter  of,  553. 

v.  M(  irrisi  in,  9. 

v.  Richmond,  311,  561. 
Ravnor  v.  Mintzer,  250. 
Rea,  Matter  of,  1S2. 

v.  Missouri.  13,  357,  372,  498,  499. 
Read  v.  Mosby,  58,  64. 

V.   Patterson.   297. 

v.  Worthington,  24,  606,  616. 
Reade  v.  Livingston,  1S6,  187,  192.  104, 

197,  205,  209.  541. 
Reber  v.  Gundy,  694. 
Receiver  of  State   Bank  v.   First   Nat. 

Bank,  551. 
Redfield  :■.  Buck,  410,  490. 
Redfield  &    Rice   Mfg.    Co.   v.   Dvsart, 

416. 
Redhead  v.  Pratt,  6S8. 
Redpatb  V.   Lawrence,  377. 
Red   River  Valley  Bank   v.    Freeman, 

232,  574- 
Reed  v.  Bott,  273. 

?'.  Emery,  592. 

v.  Gannon,  '^74,  675,  686. 

v.  Mc Inty re,  548,  599,  704. 

v.  Minor,  462. 

v.  Noxon,  15. 

v.  Pelletier,  609. 

v.  Reed,  440. 

t.  Stryker,  104,215,290. 

v.  Wheaton,  171 

7 .  Woodman,  211.  423. 
Reeder  v.  Speake,  155. 
Reehling  7'.  Byers,  434. 

v.  Livingston,  182,536. 
Reese  v.  Reese, 526. 

7 .  Shell,   526,  527. 
I  s  v.  Ayers,  102. 

7.  Dougherty,  12. 

7.  Peterman,  574. 

7'.  Skipper.   5'  10. 
Reg.  7'.  Smith.  309. 

i  v.  McClv 
Rei(  hart  v.  '  -i-i  >•■  »r,  7 1 7. 

V.   Lloyd,  482. 

Reifsnyder  r .  II  unter,  640. 
R'-i  i^<-r  7'.   Davi 

II'.  nes,  487. 
Reilly  ~-.  P.arr.  -jo.  410. 

ngton     .  Linthicum,  133. 
Remington  Paper  Co.  7.  o'Dougherty, 
247- 


Renfrew  :■.  McDonald,  732. 
Renney  v.  Williams,  435. 
Rennie  v.  Bean,  554,  5  )2. 
Renninger  v.  Spatz,  446,  459. 
Renton  v.  Kelly,  581. 
Retzer  v.  Wood,  515. 
Reubens  v.  Joel,  140. 
Rex  v.  Duchess  of  Kingston,  29. 

v.  Earl  of  Nottingham,  634. 
Reyburn  v.  Mitchell.  167,  389. 
Reynell  v.  Sprye,  28. 
Reynes  v.  Dumont,  179. 
Reynolds,  In  re,  182. 

v.  Crook,  42S. 

v.  Ellis,  547. 

7.  Gawthrop,  11.    13,    15,  16,  395, 
405,  418,  497. 

v.  Johnson,  388,  390. 

r.  Park,  267. 

7'.  Robinson,  392. 

v.  Welch,  140. 
Rhawn  v.  Pearce,  516. 
Rhead  7'.  Hounson,  109,  274. 
Rheinstein   v.  Bixby,  332,  335. 
Rhem  v.  Tull,  224. 
Rhine  v.  Ellen,  396. 
Rhoads  v.  Blatt,  415. 
Rhodes  v.  Wood,  530. 
Ribon  v.  Railroad  Cos.,  249. 
Ricard  v.  Sanderson,  81. 
Rice  v.  Cunningham,  4S0. 

v.  Morner,  406. 

v.  Perry,  278,  352. 

v.  Savery,  Si. 
Rich  v.  Braxton,  136. 

v.  Levy,  100. 
Richards  v.  Kountze,  12. 

;•.  La  Tourette,  520. 

7'.  Leveille,  704. 

v.  Levin,  576. 

v.  Pierce,  288. 

v.  Vaccaro,  477. 
Richardson  7'.  Green,  237. 

v.  Marqueze,  89,  574,  704. 

v.  Mounce,  513. 

v.  Rardin,  454. 

v.  Rhodus,  187. 

v.  Root,  224. 

v.  Smallwood,  209. 

v.  Stringfellow,  370,  458,  574,  610. 

v.  Thurber,    548,   602,    613,    710. 

v.  Trimble,  147. 

7'.  Wyman,  545. 
Riches  v.  Evans,  365. 
Richmond  7\  Irons,  292. 
Richmond   Nervine  Co.   v.  Richmond, 

72. 
Richolson  v.  Freeman,  494,  6SS,  6S9. 
Richtmeyer  v.  Remsen,  552. 
Rickards  v.  Attorney-General,  37. 
Rickerson    R.    M.    Co.    7\  Farrell,  F.  & 

M.  Co..   334. 
Riddell  v.  Munro,  372.  499,  667. 
Riddle  v.  Lewis,  702. 


References']       TABLE    OF    CASKS.        [art 


liii 


Riddle  v,  Mandcville,  264. 
Rider  v.  Ham,  665. 

v.  Hunt,  7,  347. 

v.  Kidder,  67,  182,  223. 

v.  Mason,  86. 
Ridge  v.  Greenvvell,  436.  502. 
Ridgely  v.  Bond,  114,  280. 
Ridgway  v.  English,  392. 
Ridout  v.  Burton,  450. 
Rife  v.  Geyer,  65,  657,  659. 
Riggan  v.  Wolf,  347.  354- 
Riggins  v.  Brown,  4S3. 
Riggs  v.  Buckley,  307. 

v.  Murray,  33,  621,  634,  702. 

v.  Palmer,  45,  46. 
Riley  v.  Carter,  563,  568. 

v.  Mayor,  etc.,  of  N.  Y.,  371. 

v.  Vaughan,    533,  534. 
Rinchey  v.  Stryker,  no,    143,   158,  159, 

241,  262. 
Rindskopf  v.  Myers,  371. 
Rindskoph  v.  Kuder,  666. 
Rinehart  v.  Long,  289. 
Ringgold  v.  Ringgold,  309. 

v.  Waggoner,  426. 
Ringold  v.  Suiter,  322. 
Riper  v.  Poppenhausen,  278,  481. 
Rippon  v.  Norton,  657. 
Ritchie  v.  McMullen,  154. 
Ritterband  v.  Baggett,  69. 
Roach  v.  Bennett,  528. 

v.  Brannon,  388. 
Robb  v.  Brewer,  88. 
Robbins  v.  Armstrong,  538. 

v.  Butcher,  5S3. 

v.  Oldham,  454. 

v.  Parker,  635. 

v.  Sand  Creek  Turnp.  Co.,  216. 
Roberge  v.  Winne,  547. 
Robert  v.  Hodges,  138,  163. 
Roberts  v.  Albany  &  W.  S.   R.  R.  Co., 
130,  709. 

v.  Anderson,  4S,  338,  699,  700. 

v.  Buckley,    7,    12,  46,  477,   567, 
570,  606,  613. 

v.  Gibson,  294. 

v.  Guernsey,  12. 

v.  Hawn,  450,  454. 

v.  Medbery490. 

v.  Shepard,  427. 

v.  Stevens,  644,  655,  660. 

v.  Tobias,  602. 

v.  Vietor,    19,    23,    347,   355,   551, 
566. 
Robertson  v.  Johnston,  660. 

v.  Sayre,   107,  164,  242,   720,  723. 

v. Western,  etc.,  Ins.  Co.,  661. 
Robinson  v.  Bates,  545. 

v.  Clark,  526. 

v.  Consolidated    R.    E.    &    F.    I. 
Co.,  391. 

v.  Dryden,  7. 

v.  Elliott.    27,   471,  619,  620,  625, 
626,  633. 


Robinson  v.  Frankel,  4-'^,  435,  436. 

v.  Holt,  52,  323. 

v.  Huffman,  60. 

v.  Stevens,  523,  525. 

v.  Stewart,   61,  62,  115,  141,,  201;, 
306,  350,  534,  7.0. 

v.  Wallace,  539. 

v.  Williams,  391. 
Robinson  Motion  Co.  v.  Foot,  705. 
Rocheblave  v.  Potter,  454. 
Rochford  v.  Hackman,  65,  047,  657. 
Rockford  Boot&  S.  Mfg.  Co.  v.  Mastin, 

706. 
Rock  Island  Nat.  Bank  v.  Powers,  621. 
Rockland  County  v.  Summerville,  434, 

706,  707. 
Rockwell  v.  McGovern,  609. 
Rockv   Mountain    Nat.    Bank  t.  Bliss, 

151,  152,  153- 
Rodgers  v.  Dibrell,  217. 
Rodman  v.  Harvey,  331. 

:'.  Henry,  116,  235. 
Roe  v,  Hume,  3S9,  562,  563,  609. 

v.  Meding,  445,451. 

v.  Mitton,  374. 

v.  Moore,  359. 
Roeber  v .  Bowe,  674. 
Roffey  v.  Bent,  647. 
Rogers  v.  Albany  &   W.   S.  R.  R.  Co., 
129. 

v.  Brent,  133. 

v.  Brown,  515. 

v.  Decker,  269. 

v.  Gosnell,  81. 

v.  Hall,  497. 

v.  Jones,  58,  67,  672. 

v.  Ludlow,  77. 

v.  Rogers,  146,   267. 

v.  Verlander,  191,  199,  394. 
Rohrbough  v.  Johnson,  454. 
Rollins  v.  Mooers,  667. 
Romaine  v.  Chauncey,  87. 
Roman  v.  Mali,  720. 
Romans  v.  Maddux,  523. 
Rome  Exchange  Bank  v.  Eames,  637. 
Romine  v.  Romine,  330. 
Rood  v.  Welch,  232. 
Rooker  v.  Rooker,  374. 
Root  v.  Reynolds    375. 
Roper  v.  McCook,  172. 
Rose  ?\  Brown,  60,  198,  366. 

v.  Colter,  190,  393,  451,  519. 

v.  Hatch,  87. 

v.  Renton,  601. 

v.  Sharpless,  93. 
Roseboom  v.  Roseboom,  643. 
Rosenberg  v.  Moore,  103,  333. 
Rosenblatt  v.  Johnston,  262. 
Rosenstein  v.  Coleman,  584. 
Rosenthal  v.  Coates,  260,  521. 

v.  Walker,  2S4. 
Rosher,  ///  re,  640. 
Ross  v.  Bridge,  339. 

i'.  Caywood,  673. 


liv 


References']       TABLE    OF    CASES.       [are  to  pages. 


Ross  :•.  Crutsinger,  418. 
ggan,  424. 

r  .   1  la  nil  I 

v.  McLung,  135. 

,  .  Wcllman.  476,  501. 

v.  Wood,  147. 
Rosseau    .  Bleau,  225. 
Rothchild  1 .  Rowe,  449. 
Rothgerber  v.  Gough,  431- 
Rothschild  v.  Kohn,  708. 

-  ,    Mark,   520. 

-  ilomon,  574,  609,  610,  611. 
Rouett  v.  Milner,  414. 
Rourkc  v.  Bullens,  449. 
Rouse  v.  Bowers,  557,  560. 

Southard,  2S5. 
Rowland  v.  Coleman,  274. 
Roy  v.  Bishop  of  Norwich,  45. 
Royal  Baking   Powder  Co.  <".  Sherrell, 

'  72. 
Royall  v.  McKenzie,  483. 
Royce  v.  Gazan,  370,  477. 
Rover  Wheel  Co.  v    Fielding,  176,  389, 
562,  595. 

v.  Frost,   350. 
Rozek  v.  Redzinski,  88. 
Rozell  v.  Vansyckle,  733. 
Rozier  v.  Williams,  454. 
Rucker  r.  Abell.  341. 

v.  Moss,  481. 
Ruckman  v.  Conover,  718. 
Rudy  r-.  Austin,  209,  377. 
Ruffing  v.  Tilton,  21S. 
Ruffner  v.  Welton  C.  &  S.  Co.,  347. 
Rugan  v.  Sabin,  690. 
Ruggles  v.  Brock.  237. 
Ruhl  v.  Phillips,  357.-427,  557- 
RutTK-rv  v.  McCulloch,   564    717. 
Runals  ?■.  Harding, '331. 
Rupe  t.  Alkire.  24,  354. 
Ruse  v.  Bromberg,  216,  423. 
Rush  v.  Barr,  514. 

7'.  Vought,   114. 
Russell,  Ex  parte,  203. 

7'.  Clark,  107,  169,  250. 
I  Iyer,  109,  133. 

7'.  GrinneP,  656. 
I  ,asher,  267. 

v.  Lennon,  93. 

7'.  O'Brien,  4<>\. 

?■.  Rutherford 

7.  Winne,  133,  347,  353,  408,  621, 
623. 
Rutherford  v.  Chapman,  532. 

7'.  Schattman,  495. 
Ruyter  v.  Reid,  122. 
Ryall  7'.  Rolle,  37    40,  107. 
Ryan  v.    I 

-.-.  S[>ii-ih,  271.  273. 

7'.  Staples 

7.   Webb 
Ryder  v.  Hulse 

7'.    Si^'-ofi      ■ 

v.  Wombwell,  499. 


Ryhiner  -<■.  Ruegger,  547. 
Ryland  v.  Callison,  133,  246. 
Ryle  7.  Falk,  126. 

Sabin  <".  Columbia  Fuel  Co.,  357,  481. 

Sacry  7'.  Lobree,  481. 

Safford  -■.  Douglas,  708. 

Sage  v.  Memphis,  etc.,  R.  R.  Co.,  167. 

v.  Mosher,  215,  216,  258. 
St.  George  v.  Wake,  544. 
St.    George's   Church    Soc.    v.  Branch, 

391- 
St.  John  v.  Benedict,  720. 

v.  Pierce,  219. 
St.  Louis  &  S.  F.  Ry.  Co.  v.  Johnston, 

273,  274. 
Salisbury  v.  Morss,  260. 
Salmon  v.  Bennett,  187,  437. 

v.  Smith,  304. 
Salt    Springs  Nat.    Bank    v.    Fancher, 

322. 
Sammons  v.  O'Neill,  676,  679. 
Samuel  v.  Kittenger,  426. 

v.  Salter.  660. 
Sanborn  v.  Kittredge.  113. 
Sanders  v.  Clason,  82. 

v.  Logue,  183. 
Sandman  v.  Seaman,  126,  415. 
Sands  v.  Cod  wise,  38,  229,  343,  431. 

?•.  Hildreth,  301. 
Sanford  v.  Lackland,  65. 

7'.  Sanford,  396. 
Sanger  v.  Colbert,  426,  487. 

v,  Flow,  549. 

v.  Upton,  131. 
Sangston  v.  Gaither,  20. 
Sankey  t.  O'Maley,  336. 
Saratoga  County  v.  Deyoe,  163,  219. 
Sargent  r.  Salmond,  40,  67,  106,  107. 
Sarle  v.  Arnold,  399,  410,  450,  451,  497, 

498. 
Satterlee  7\  Matthewson,  574. 
Sauer  v.  Behr,  420,  619. 
Saunders  v.  Lee,  666. 

v.  Parrish,   498. 

7'.  Reilly,  389,  562. 

v.  Waggoner,  611. 
Savage  v.  Dowd,  704. 

v.  Hazard,  667. 

v.  Knight,  47. 

v.  Murphy,     135,     193,    195,    208, 
209,  360,  361,  534. 

v.  O'N'eil.  124,  524. 

v.  Smith,  520. 
Savings  Bank  of  N.  H.   v.  Bates,  615. 
Savoye  v.  Marsh,  517. 
Sawin  v.  Guild,  74. 
Sawyer  v.  Almand.  700. 

7'.  Bradshaw,  400. 

v.  Harrison,  474. 

v.  Hoag.   131,  237,  240    268. 

v.  Levy,  703,  7:5. 

v.  Noble,  219. 

v.  Thayer,  227. 


References']       TABLE    OF    CASKS.       [aretofiage*. 


lv 


Sayles  v.  Best,  79. 
Sayre  v.  Flournoy,  6S. 

v.  Fredericks,    35,    52,    306,   30S, 
375,  4io. 

v.  Hewes,  408. 
Scales  v.  Scott,  160. 
Schafer  v.  Reilly,  121. 
Schaferman  v.  O'Brien,  259,  416. 
Schaible  v.  Ardner,  19,  700. 
Schatz  v.  Kirker,  414. 
Scheble  v.  Jordan,  490. 
ScheitHn  v.  Stone,  301,  433. 
Schermerhorn  v.  De  Chambrun,  724. 

v.  Merrill,  62. 

v.  Negus,  640. 
Schiele  v.   Healy,  609. 
Schleisinger  7>.  Sherman,  no. 
Schloss  v.  Wallach,  115,  125,  555. 
Schmidlapp  v.  Currie,  102,  388. 
Schmidt  v.  Niemeyer,  476. 

v.  Opie,  374',  375. 
Schneider  v.  U.  S.  Life,  etc.,  Co.,  56. 
Schnicker  v.  People,  487. 
Schoeffler  v.  Schwarting,  338. 
Scholey  v.  Worcester,  184,  213. 
Schram  v.  Taylor,  357. 
Schrenkeisen  v.  Miller,  320. 
Schreyer  v.    Scott,    1S0,    181,    188,    193, 

196,  198,  200,  203,  204,  205,  523. 
Schribar  v.  Piatt,  92. 
Schroder  v.   Tompkins,   548,    551,   614, 

615. 
Schroeder  v.  Bobbitt,  408,  703. 

v.  Walsh,  357. 

v.  Young,  8. 
Schroer  v.   Pettibone,  145. 
Schumacher  v.  Bell,  432,  497. 
Schuster  v.  Stout,  183. 
Schwartz  v.  Soutter,  563. 
Schwed  v.  Smith,  740,  741. 
SchwierT'.  N.   Y.   Cent.  &  H.  R.  R.  R. 

Co.,  432. 
Schwinger  v.  Hickok,  116. 
Scofield  v.  Spaulding,  492. 
Scoggin  v.  Schloath,  395,  396 
Scott  v.  Alford,  587,  620. 

v.  Davis,  363,  379. 

v.  Depevster,  279. 

v.  Gill,  81. 

v.  Hartman,  1S3,  244,  245. 

v.  Indianapolis    Wagon  Works, 
51,  100. 

v.  McFarland,  271. 

v.  McMillen,  168,  169. 

v.  Magloughlin,  222,  521 

v.  Mills,  554. 

v.  Morgan,  163. 

v.  Neely,  7,  137,  139. 

v.  Nevius,  86,  661. 

v.  Wallace,  172. 

v.  Winship,  415,  459. 
Scottish   Amer.    Mortgage  Co.   v.   Fol- 

lansbee,  219. 
Scouton  v.  Bender,   298. 


Scoville  t\  Canfield,  . 
Scribner  v.  Fisher,  5 1 7. 
Scrivenor  v.  Scrivenoi .  419. 

Sim  Ins.  Co.  v.  Stebbins,  336. 
Seale  v.  Vaiden, 
Seaman  v.  Stoughton,  229. 
Sens  ,-'.  Choate,  66  ». 

7'.    I  lanks    i  1  . 

7'.  Putnam,  (140. 

,-•.  Shafer,  431. 
Seasongood  r.  Wan-  6 
Seaver  v.  Bigelows,  2i(>,  -\^. 
Seavey  71.  Walker,  45. 
Seavy  r\  I  )earborn,  676,  686. 
Sebrauth  v.  Dry  Dock  Saw  Bank,  116. 
Second  Nat.  Bank  t.  Brady,  724. 

7-.  Merrill,  208,  357,  421,  531. 

v.  Schrauck,  550. 

v.  Yeatman,  413,  431,  432. 
Secor  7\  Lord,  81. 
Sedgwick  ?■.  Stanton,  31. 

v.  Tucker,  370. 
Seeleman  v.   Hoagland,  277,  301,    \- g 
Seger'sSons  v.  Thomas  Bros.,  407,  431, 

703. 
Seitz  v.  Mitchell,  302,  303,  435,  526,  527, 

539- 
Seivers  v.  Dickover,  343. 
Selleck  v.  Phelps,  349. 
Selover  v.  Coe,  264. 
Semmens  v.  Walters,  7,  539. 
Semmes  v.  Hartford  Ins.  Co.,  166. 
Senter  v.  Mitchell,  116. 
Sere  v.  Pitot,  231. 
Severs  v.  Dodson,  181,  1S2. 
Seward  v.  Jackson,   183,   186,    1S9,  192, 

205,  376. 
Sexey  v.  Adkinson,  140. 
Sexton  v.  Anderson,  389. 

v.  Wheaton,  60,  96,  100,  106,  1S9, 
194,  204,   205,   209,  221,  223, 
412,  533- 
Seymour  v.  McKinstey,  666. 
v.  O'Keefe,  453,  4<">. 
v.  Wilson,   32,  276,  370,  371,  /,'j;, 
637,  665,  666. 
Shackelford  ;:'.  Shackelford,  102. 
Shackleford  v.  Collier,  229. 
Shaeffer  v.  Fithian,  344. 
Shafer  ^.  O'Brien,  290. 
Shainwald  v.  Lewis,  58,  116,  296,  331. 
Shand   v.    Hanley,    199,    220,    26S,  298, 

314,  337.  342.'  34".  366. 
Shankland's  Appeal,  650,  657,  662. 
Shanks  v.  Klein,  389. 
Shannon  -\  Commonwealth,  034. 
Sharp  v.  Cosserat,  647. 
V.  Sharp,  297. 
7'.  Teese,  712. 
Sharpe  v.  Davis,  717. 

7'.  Freeman,  225. 
Shattuck  7\  Freeman, 
Shauer  v.  Alterton,  435,   446.   4 
693. 


Ivi 


Re/trtneJ\        TABLE    OF    CASES.        [are  to  pages. 


Shaul  v.  Harrington,  452. 
Shaver  1 .  Brainard,  251. 

Shaw  ;.  Dwight,  14''.  155.  176,  J77.  178, 
-47.  476- 
: .  Levy,  453. 
-■.  Manchester,  146. 
v.  Millsaps,  255.  264,  717. 
ipei       .  ' '74- 
.    1  hompson,  449. 
v.  Wilshire,  449. 
Shawano  County  Bank  v.  Koeppen,  88. 
Shay  :.  Security  Hank,  233. 

Wheeler,  414. 
Shea  ,-.   Knoxville   ,V    Ky.    R.    R.    Co., 

157- 
Sheafe  v.  Sheafe,  100,  111,  15S,  too. 
Shealy  v.  Edwards,  403,  497,  703. 
Shean  v.  Shay,  183,  244,  416. 
Shearon  v.  Henderson,  434. 
Slice  v.  Hale,  047. 
Sheldon  v.  Weeks,  S3. 

n  H.  B.  Co.  v.  EickemeyerH,  B. 

M.  Co.,  221. 
Shelley  - .  Boothe,  704. 
Shellington  v.  Howland,  166. 
Shelton  r.  Church,  414. 
Shepard  7\  Walker,  55. 
Shepherd  v.  Trigg,  454. 

?'.  Woodfolk,  340,  342. 
Sheppard  v.  Thomas,  204,  212. 
Sheppard's  Estate,  506. 
Sheppards  v.  Turpin,  583. 
Sherman  v.  Barrett,  32. 

v.  Blodgetl,  4S3,  484. 
v.  Elder,  532,  552. 
v.  Hogland,  9,  190,278,403,413, 
435.  495.  502. 
Sherrill   Roper  Air  Engine  Co.  v.  Har 

wood,  339. 
Sherron  v.  Humphreys,  451. 
Sherwin  r.  Gaghagen,  619,  (>?(>. 
Sherwood  v.  Su:t<>n,  2S6,  513. 
Shields  v.  Barrow.  249. 
Shine  t-.  Gough,  '  ;- 1. 
Shipman  v.  .Etna  Ins.  Co.,  231. 

,  I  amis  s,  29,  386. 
Shirley  v.  Long,  231. 

7'.  Teal. 
Shirr.:  ,  406. 

Shober  v.  Wheeler,  413,  435. 
v!i-»-inaker  ?'.  Cake  28. 

.  278. 
Shontz  v.  lirown,  181,  183,  222. 
Short  v.  Tinsley,  340. 
Shorten  v.  Woodrow,  [64. 
Short  Staple(The),  12. 
Shotwell,   In  r, . 
Showman  .  .    Lee,  347,  42?. 
Shryock  v.  Waggoner,  -  . 
Shufeldt  -■.  I  oehm,  too,  toi,  131,  167. 
Shultz  -■.  Hoagland,  to,  435,   553,  558, 

593,    6oq, 

'.11. 
Shumway  r.  Rutter,   449. 


Shumway  v.  Shumway,  330. 

Shurtleff  v.  Willard,  449,  635. 

Shurts  v.  Howell,  155. 

Shutts  v.  Fingar,  223. 

Sibly  ?'.  Hood,  454. 

Sibthorp  v.  Moxom,  80. 

Sickle.  Matter  of,  115,  555. 

Sickles  v.  Sharp,  47. 

Sickman  7'.  Wilhelm,  351,  368. 

Sidensparker  7'.  Sidensparker,  146,  476, 

667. 
Sides  v.  McCullough,  213. 

7'.  Scharff,  278. 
Siedenbach  v.  Riley,  450. 
Sigler  7'.  Knox  County  Bank    102 
Sillick  v.  Mason    86. 
Silliman  7'.  Haas,  491. 

v.  United  States,  354. 
Sillyman  7-.  King.  529. 
Silverman  v.  Lessor,  517. 
Silvers  v.  Hedges,  12. 
Silvis  v.  Oltmann,  474. 
Simar  v.  Canaday,  134,  215,  543. 
Simmons  v.  Ingram,  108,  264,  366. 

v.  Jenkins,  619. 
Simms  7'.  Morse,  9,  435,  503,  539. 
Simon  v.  Ellison,  25;. 

v.  N'orton,  589. 
Simon-Gregory  Co.  v.  McMahan,  489. 

v.  Schooley,  673,  679. 
Simpson  v.  Dall,  95. 

v.  Del  Hoyo,  666. 

v.  Warren,  231. 
Sims  v.  Gaines,  19,  51,  66,  424,  480. 

v.  Phillips,  92. 

v.  Thomas,  59,  77. 
Simson  v.  Brown,  Si. 
Singer  v.  Goldenburg,  426. 

v.  Jacobs,  681,  688,  689. 

v.  Wheeler,   117,  374. 
Singree  v.  Welch,  374. 
Sipe  v.  Earman,  416,  559. 
Sipley  v.  Wass,  666. 
Skarf  v.  Soul'jy,  51. 
Skeate  v.  Beale,  354. 
Skeele  v.  Stanwood,  140. 
Skellie  v.  James,  526. 
Skipwith  v.  Cunningham,  416. 
Skowhetran  Bank  7'.  Cutler,  36. 
Slater  v.  Sherman,  51. 
Slattery  -.•.  Schwannecke,  357. 
Sledge  7'.  Obenchain,  212. 
Sleeper  -■.  Chapman,  401,  626. 
Slingluff  v.  Smith,  -<>i . 
Sloan  7'.  Birdsall,  21. 

v.  Huntington,  530. 
Small  7'.  Boudinot,  275. 

7.  Owings,   1 14. 

V.  Small,  418. 
Smart  -■.  Bement,  669,  670. 
Smeltzer  v.  I  roslee,  66 ;. 
Smets  v.  Williams,  55. 
Smillie  v.  Quinn,  56,  88. 
Smith  v.  Acker,  617. 


References]       TABLE    OF    CASES.       [are  to  pages. 


lvii 


Smith  t.  Allen,  88,  383. 
v.  Babcock,  296. 
v.  Barclay,  69. 
v.  Bellows,  569. 
v.  Blake,  118. 
?'.  Bowen,  S3. 
v.  Boyer,  425. 
v.  Bromley,  729. 
v.  Brown,  432. 
v.  Bryan,  740. 
v.  Buchanan,  518. 
v.  Champney,  471. 
v.  Clark,  640. 
v.  Collins,  279,  483. 
v.  Conkwright,  26,  634. 
v.  Craft,    221,    458,  592,  62S,  702, 

703,  705,  713,  7M- 
v.  Crisman,  469. 
v.  Davis,  608. 
v.  Ely,  619,  623,  633. 
v.  Emerson,  93. 
v.  Felton,  520. 
v.  Garey,  76. 
v.  Greer,  197. 
v.  Grim,  255,  264. 
v.  Henkel,   11. 
v.  Henry,  690. 
v.  Howard,  575,  717. 
v.  Hubbs  732. 
v.  Hunter,  453. 
v.  Hurst,  634. 
v.  Johnson  567. 
v.  Kay,  275,  729. 
v.  Kearney,  58. 
v.  Kehr,  31. 
v.  Kelley,  336. 
v.  Longmire,  159,  175. 
v.  Lowell,  437,  4S0. 
v.  Meaghan,  243. 
v.  Milieu,  140. 
v.  Mitchell,  89,  553. 
v.  Moore,  65,  457. 
v.  Muirheid,  35,  153. 
v.  Munroe,  578,  613. 
v.  National  Benefit  Soc,  4S7,  488. 
7'.  New  York  L.  I.  Co.,  227,  425. 
v.  Onion,  423,  424. 
v.  Quartz  M:n.  Co.,  737. 
v.  Railroad  Co.,  ror,  140,  172. 
v.  Reid,     18,     23,    109,    no,    188, • 

192,  314,315,435. 
v.  Riggs,  533. 
v.  Rumsey,  31,  92,  158. 
v.  Sanborn,  64. 
v.  Sands,  324. 
v.  Schulting,  2t8. 
v.  Schwed,  501,  706. 
v.  Sipperly,  389. 
v.  Skeary,  704. 
v.  Smith,  352,  389,  390,   517,  543- 

563. 
v.  Spencer,  377. 
v.  Towers,  644,  654,  655,  658. 
v.  Vodges,  188,  204,  437. 


Smith  r'.  Vreeland,  1S7. 

v.  Water  Comm'rs  of    Norwich, 

357- 
7'.  Weeks,  n;,  173. 
v.  Welch,  459. 
V.  White    433. 
V.  William 
7'.    Wise,    32I,    34O,  560,    56I. 

7'.  Wood,  96,  273,  275. 

v.  Veil,   437- 
Smith's  Appeal,  551,  O14. 
Snedecor  v.  Watkins,  516. 
Snell  v.  Harrison,  431. 
Snelling  -•.  Mclntyre,  350. 
Snodgrass  t.   Andrews,    104,    1 56,  172, 
215,  223. 

v.  Branch  Bank  of  Decatur,  286, 

513- 

Snow  v.  Lang,  723. 

7'.  Paine,  370. 
Snowdon  v.  Dales,  (14,  657, 
Snyder  v.  Braden,  354. 

v.  Christ,  206,  366. 

v.  Dangler,  278. 

v.  Free.    190,    351,    352,  392,  394, 
488. 
Societa  Italiana  v.  Sulzer,  301. 
Sockman  v.  Sockman,  111. 
S  iden  v.  Soden,  1S2,  416. 
Sohier  v.  Johnson,  71. 
Solinger  7.'.  Earle,  712. 
Solinsky  v.  Lincoln  Sav.  Bank,  S4,  324. 
Somerville  v.  Donaldson,  330. 
Somes  v.  Skinner,  502. 
Sommermeyer  v.   Schwartz,    203,   414, 

537- 
Sommerville  v.  Horton,  635. 
Songer  ?'.  Partridge,  717. 
Sorenson  v.  Sorenson,  208. 
Souder's  Appeal,  113,  121. 
Soule  v.  Chase,  517. 
Southall  v.  Farish,  273,  504. 
Southard  v.   Benner,  57,  139,  14-'.   [68, 

225,  229,  231,  233,  553,  I 
South  Branch   Lumber  Co.  v.  <  >u,  571, 

595,  596,  606.  612. 
South   Danvers    Nat.  Bank  v.  Stevens, 

551- 

South  Sea  Co.  v.  Wymondsell.  =1  (, 
Southwick  7'.  First  Nat.  Bank,  27 
Southworth  v  Adams,  136. 
Spackman  v.  Evans,  17. 
Spader  7A  Davis,  58,  128,  14S 
Sparhawk  .-.  Cloon,  65,  656. 

v.  Yerkes,  70,  71.  74. 
Sparks  v.  Brown.  490,  619. 

.-'.  Dawson,  1 ;. 

v.  De  La  Guen 

7'.  Mack.  4S1,  iii 
Spaulding  7'.  Blythe,  278,  361,  519. 

v.  Fisher,  164. 

7'.  Keyes,  55.  501,  525,  630. 

v.  Strang,  =7",  704,  7r5- 

Speiglemyer  7'.  Crawford,  157,  223. 


lviii 


TABLE    OF    CASES.        {are  to  Pages. 


Spelman   v.    Freedman,    139,    177.  221, 
248,271,332,547,597 

Spem  .     .  well,  55''. 

Smith,  424.  47^,  700. 
Spencer  :.  Armstrong,  155. 
.  Ayrault,  3S7. 
I    lyler,  115. 
v.  Godwin,  [87. 
v.  Jacks. hi,  601. 
1 .  Myers,  56. 

5]  enter,  544. 
■  .  Ktheridge,  628. 
Spicer  v.  Ayers,  155. 
v.  Hunter,  321. 
: .  Spicer,  10. 
Spindle   v.    Shreve.    59,   65,   S4,  85,  87, 

136,  638,  (  50,  652,  653. 
Spirett  v.  Willows,  61 1. 
Splawn  v.  Martin.  357. 
Spokane   0>.  v.  Clark,  83. 
Spotts  v.  Commonwealth,  475. 
Sprague  v.  Cochran,  251. 

.  1  laines,  516. 
Spraights  v.  Hawley,  444,  618. 
Spring  ?•.  Short,  57,  231,  232.  553. 
Spring  Co.  : .  Knowlton,  731. 
Springer  v.  Savage,  660. 
Springfield   Homestead  Assoc,  v.  Roll, 

70I,  717. 
Stacy  v.  Deshaw,  55,  503. 

:•.  Thrasher,  154. 
Stadelman  v.  Loehr,  564. 
Stafford  v.  Merrill,  610. 
Stall  v.  Fulton.  529. 
Stambaugh's  Estate,  662. 
Stamper  v.  Hibbs,  709, 
Stanbro  v.  Hopkins,  474. 
Stanford  v.  Lockwood,  553. 
Stanley  v.  Hum  e 

v.  National     Union    Bank,    459, 

462. 
v.  Robbins,  3S1. 

Si  hwalby.  377. 
v.  Stanton.  285. 
v.  Thornton.  ' 
Stanton  z .  <  rreen,  308.    . 
v.  Kirsi  li 
v.  Shaw,  725. 
v.  Westover,  564. 
Staples  v.  Bradley,  109,  133. 

.  Smith,  501. 
Starin  v.  Kelly,  38,   358,  370,    478,    559, 

Stark  v.  Grant,  450,  451. 

v.  Starr,  8. 
Starke  v.  Little  page,  72C,  734. 
Starks  v.  Curd.  232. 
Starr  v.  Peck,  to,  [2. 

Starr,  397. 
State  v    Bowen,   129,  141. 

V.  Burk<  holder.  245. 
Bust  1).  618,  619. 

:  .  I   ast(  ■  I,  47"- 


State  v.  Durant,  470. 

v.  Estel,  20. 

v.  Evans,  394. 

{ex  rel.  Smith)  v.  Flynn,  462,403. 

(ex  rel.)  Baumunk)  v.  Goetz,  454. 

v.  Hemingway,  397. 

v.  Hope,  347. 

v.  Keeler,  433,  55S. 

v.  King,  41.1 

v.  McBride,  58,  63. 

v.  Mason,  357,  405,  676,  685,  691. 

(ex   rel.    Peirce)  v.    Merritt,   426, 
431.  676. 

v.  Miller,   124. 

(ex  rel.   Brown)  v.   Mitchell,   399, 
45S. 

v.  Mueller,  26. 

v.  Phcenix  Bank,  500. 

v.  Purcell,  691. 

v.  Roever,  624,  633. 

(ex  rel.  Enderlin  State   Bank)   v. 
Rose,  550,   557. 

v.  Rosenfeld,  460. 

v.  Thomas,  102. 

?■.  Williams,  518. 
State  Bank  v.  First  Nat.  Bank,  551. 

v.  Whittle,   393. 
State  Saw  Bank  v.  Buck,  421. 
Staton  v.  Pittman,  231. 
Steadman  v.  Wilbur,  524,  525. 
Stearns  v.  Gage,  360,  671;,  676,  678,  679, 
683,  6S4,  686^  692. 

v.  Harris,  73. 

v.  Page,  284,  285,  286,  513. 
Stebbins  v.  Miller,  4S6. 
Steel  v.  De  May,  434. 

v.  Goodwin,  614. 
Steele  v.  Benham,  4S7,  459,  632. 

v.  Ward,  357. 
Steelwagon  v.  Jeffries,  463. 
Steere  v.   Hoagland,   84,    154,   156,  166, 

"'7.  325.  415. 
Steib  v.  Whitehead,  660. 
Stein  v.  Hermann,  322. 

v.  Munch,  632. 
Stephens  v.  Adair,  717. 

v.  Cady,  71,  73,  74. 

v.  GifTord,  450,  453. 

v.  Meriden  Britannia  Co.,  235. 

v.  Perrine,  234,  633. 

v.  Regenstein,  610. 

v.  Whitehead,  141,  288. 
Stephenson  v.  Donahue,  538. 
Stern  Auction  &  C.  Co.  v.  Mason,  414. 
Sternbach  v.  Leopold,  420. 
Sterry  v.  Arden,  383,  672. 
Stetson  v.  Miller,  594. 
Stevens  v.  Breen,  618. 

v.  Brennan,  345. 

v.  Carson,  521). 

V.  Dillman,  415,  431,  432,  486. 

7\  Gladding,  74. 

V,  Hinckley,  423,  424. 

v.  Irwin,  457. 


References']       TABLE    OF    CASES.        [are  to  pages. 


lix 


Stevens  v.  Merrill,  3. 

v.  Myers,  338. 

v.  Pierce,  428. 

v.  Robinson,  23,  190,  437. 

v.  Wiley,  736. 

v.  Works,  182. 
Stevens  Lumber  Co.  v.  Kansas  City  P. 

M.  Co.,  357. 
Stevenson  v.  Stevenson,  51. 

v.  White,  94. 
Steward  v.  Thomas,  468. 
Stewart  v.  Beale,  165. 

v.  Dunham,  136,  740. 

v.  Emerson,   104. 

v.  English,  58,  67. 

v.  Fagan,  140. 

v.  Fenner,  488,  498. 

v.  Hopkins,  419. 

v.  Isidor,  298. 

v.  Johnson,  495. 

v.  McMartin,  68,  117. 

v.  Mills  Co.  Nat.  Bank,  417. 

v.  Piatt,    230,  378,  617,  618,  717. 

v.  Rogers,  190. 

v.  Spenser,  577. 

v.  Stewart,  543,  544. 

v.  Thomas,  491. 

v.  Wilson,  416. 
Stickney  v.  Stickney,  536. 
Stileman  v.  Ashdown,  189,  204,  412. 
Still  v.  Focke,   564. 

v.  Spear,   650,  662. 
Stillings  v.  Turner,  720,  728. 
Stillwell  v.  Stillwell,  25S,  735. 
Stilwell  v.  Van  Epps,  126. 
Stimson  v.  White,  529. 

v.  Wrigley,  182,  448,  470,  633. 
Stinson  v.  Hawkins,  363,  406. 

v.  Williams,  58,  67. 
Stiles  v.  Champion,  595. 
Stix  v.  Chaytor,  452. 
Stock  Growers'    Bank  v.  Newton,   104, 

247,  419,  421. 
Stockwell  v.  Blarney,  491,  492. 

v.  Sillowav,  367. 
Stoddard  v.  Butler,  37,  416. 
Stokes  v.  Amerman,  56,  541. 

v.  Coffey,  57. 
Stokoe  v.  Cowan,  51,  58. 
Stone  v.  Anderson,  160. 

v.  Chisolm,  131. 

v.  Grubham,  412. 

v.  Locke,  45. 

v.  Myers,  183. 

v.  Peacock,  471. 

v.  Spencer,  363,  364. 

v.  Stone,  543. 

v.  Westcott,  144,  660. 
Stoneburner  v.  Jeffreys,  581. 
Storey  v.  Agnew,  365. 
Storm  v.  Davenport,  231,  556. 

v.  United  States,  515. 

v.  Waddell,  74,  115,  129,  708,  709. 
Stout  v.  Phillipi  Mfg.  &  M.  Co.,  702. 


Stout  r1.  Stout,  259. 

v.  Watson,  594 
Stovall  v.  Farmer^'  &  M .  Bank,  342. 
Stover  7a  Herrington,   1.06,426. 
Stow  v.  Chapin,  662. 
Stowe  v.  Taft,  449, 
Stowell  v.  Hastings,  640. 

t.  Hazelett,  489, 
Strader  v.  Mullane,   , 
Stramann  v.  Scheeren,  523. 
Strang  v.  Bradner,  518. 
Stratford  v.  Ritson,  264. 
Strathmore  7\  Bowes,  544. 
Stratton  v.  Putrey,  424,  480. 
Strauss  v.  Kranert,  13. 

v.  Parshall,  525. 
Strike  v.  McDonald,  220. 
Striker  t.  Mott,  609. 
Stroff  v.  Swafford,  413. 
Strong  v.  Clem,  1 17. 

'■.  Skinner,  62. 

v.  Strong,  51. 

v.  Taylor  School  Township,  217, 

293- 
Strouse  v.  Becker,  93. 
Stuart  v.  McClelland,  533. 

v.  Smith,  409. 

v.  Stuart,  183. 
Stucky  v.  Masonic  Sav.  Bank,  694. 
Stumbaugh  v.  Anderson,  391. 
Stump  v.  Rogers,   223. 
Sturge^  v.  Crowninshield,  517. 

v.  Vanderbilt,  140. 
Sturm  v.  Chalfant,  15,  387. 
Sturtevant  v.  Ballard,  29,  445. 
Suau  v.  Caffe,  392. 
Suffern  v.  Butler,  338. 
Sugg  v.  Tillman,   ii  1 
Suiter  v.  Turner,  468. 
Sukeforth  v.  Lord,  355. 
Sullice  v.  Gradeni^o,   224. 
Sullivan  v.  Iron  &  Silver  Min.  Co.,  277. 

v.  Miller,  156,  560,  592. 

v.  Portland  &  K.  R.  R.  Co.,  512. 

v.  Smith,  564. 

v.  Sullivan,  442. 
Summers  v.  Babb,  545. 
Sumner  v.  Brady,  712. 

v.  Cook,  490. 

v.  Dalton,  449,  463. 

v.  Hicks,  135,  571,  585. 

v.  Newton,  661. 
Supervisors  of  Saratoga  Co.  ~\  Deyoe, 

163,  219,  288. 
Susong  -•.  \\'illiams,  700. 
Sutherland,  ///  r, ■,  69. 

v.  Bradner,  19,  355,  356   51 
576,  6i  1. 
Sutphen  v.  Fowler,  738. 
Sutton  v.  Ballou,  45a,  465. 

v.  Hanford,  26. 
Suydam  v.  Northwestern  Ins.  Co.,  270. 
Swaby's  Appeal,  664. 
Swaine  v.  Perine,  543, 


lx 


References']       TABLE    OF    CASES.       [are  to  pages. 


Swan  v.  Morgan,  488,  490. 

: .  Ri  ibinson,  - 

Smith,  15".  222,  341. 
Swan  Land  &  C.  Co.  v.  Frank,  141,  172, 

249,  252. 
Sweeney  r.  Conley,  370. 
Sweeny  v.  Grape  Sugar  Ref.   Co..  129. 
Sweet  v.  Converse. 

v.  Dean.  477. 

.- .  Scherber,  _ 

v.  Tinslai . 

v.  Wright,  ?2.  4S8. 
Sweetsei  - .  Bates,  487. 
•  Iber,  mi. 

v.  Smith,  7'  ■ ;. 
Swift  7 .  Agnes,  442. 

v.   liar;,  321,  703. 

v.  Ma^s.  Mut.  Life  Ins.  Co.,  4S7. 
Swinford  v.  Rogers,  323. 
Sydm  >r  v.  >  .•  -  .  456. 

Syracuse   Chilled    Plow    Co.    v.    Wing, 
374.    536- 

Taafi'e,  Ex  part,-,  (47. 

Tabor  v.  Van  Tassell,  490,  558. 

Taff  v.  Hosmer,  24--. 

Taft  v.  Marsily,  552. 

Taggart  v.  Stanbery,  396. 

Talbott  r'.  Randall,  140. 

Talcott  v.  Harder,  703,  704,  705. 

v.  I  less,  371,  609. 
Talley  v.  Curtain,  7. 
Tallmadge  v.  Sill,  76. 
Tall  on  7'.  Ellison,  620. 
Taltarum's  Case,  651. 
Tams  v.  Bullitt,  232. 
Tantum  v.  Green,  5S,  6S,  690,  693. 

v.  Miller,  717,  72-. 
Tapia  t.  Demartini,  391. 
Tappan  v.  Evans,  126,  178. 
Tapscott  -■.  Lyon,  37. 
Tarback  v.  Marbury,  422. 
Tarbell  v.  Griggs,  153,  154. 
Tarrant  v.  Backus,  659. 
Tarsney  r\  Turner,  523. 
Tasker  v.  Moss,  142. 
Tate  v.  Liggat.  140. 
Taylor  v.  At  wood,  341. 

7'.  Maker,  I  ;  ( 

--.    Bowker,     139,    140,    142,    145, 
1-7.   172. 

v.  Branscombe,  100,  168. 

v.  Cloud,  739. 
.  I  Dickinson,  338. 

7'.  I larwell,  '.40. 
1 1'  ilmes,  144,  221. 

v.  Tones,  40,  107,  380. 

?•.  Mason 

-■.    Miles,    373. 

v.  Missouri  Gla^s  Co.,  389. 
v.  Robinson,  . 
I  aylor,  312. 
?\  United 

LSI  u      I  -  |. 


Taylor  v.  Webb,  252,  255,  264,  491. 

v.  Weld,  737. 

7 .  Wend  ling,  406. 
Teabout  v.  Daniels,  469. 
Teague  v.  Lindsey,  436. 
Tedesco  v.  Oppenheimer,  632. 
Tedrowe  v.  Esher,  492,  495. 
Teed  v.  Valentine,    146,    193,    194,  366, 

476. 
Teese  v.  Huntingdon,  499. 
Tefft  v.  Stern,  347. 
Teller  v.  Randall,  235. 
Ten  Broeck  v.  Sloo,  68,  69. 
Ten  Eyck  v.  Witbeck,  379. 
Tennent  v.  Battey,  159. 
Tennessee   Nat.    Bank   7'.   Ebbert,  619, 

625. 
Tenney  v.  Evans,  61,  358. 
Terrell  v.  Green,  403. 
Terry  v.  Anderson,  131,  145,  172. 

v.  Calnan,  220. 

7-.  Hopkins,  544. 

v.  Munger,  547. 

v.  Tubman,  178. 

7.  Wheeler,  465. 
Tessier  7 .  Wyse,  333. 
Tevis  v.  Doe,  108. 
Texas  v.  Chiles,  474,  475. 
Texas  &  Pac.  Ry    Co.  v.  Cox,  269. 
Thacher  v.  Phinney,  196,  198,  370. 
Thames  v.  Rembert,  301,  399,  666,  699. 
Thatcher  v.  Candee,  562. 
Thayer  v.  Thayer,  543. 
Third     Nat.    Bank    v.    Guenther,    393, 

531. 

Thomas,  /;/  re,  230. 

v.  Beals,  341. 

7'.  Black,  491. 

7:  Hubbell,  476. 

7'.  Mackey,  272,  275,  277. 

7.  McEwen,  55. 

7 .  Merchants'  Bank,  151. 

7'.  Pyne.  416. 

v.  Sullivan,  400. 

v.  Talmadge,  558. 
Thomason  v.  Neeley,  109,  no,  309. 
Thompson  v.  Adams,  70. 

v.  Baker,  297. 

v.  Bickford,  6i,  340. 
.   lllanchard,  450,  459. 

7\  Brown,  226. 

v.  Crane,  193. 

7'.  Cundiff,  56,  541. 

7'.  Diffenderfer,  103. 
.   I  >rake,  407. 

7'.  Duff,  692. 

v.  Feagin,  526. 
'<••  Fry,  547. 

v.  Furr,  34. 

v.  Hall,  485. 

v.  Loenig,  529. 

7'.  Moore.  45,  214. 

7'.  Murphy,  660. 

7.  Xixon,  68. 


References']       TABLE    OF    CASES. 


lxi 


Thompson  v.  Paret,  453. 

v.  Pennell,  424. 

v.  Rainwater,   549. 

v.  Richardson    Drug    Co.,    425, 
618. 

v.  Robinson,  183,  416. 

v.  Sanders,  304. 

v.  Sherrard,  335. 

v.  Thompson,  87,  638. 

v.  Tower  Mfg.  Co.,  394,  434. 

v.  Towne,  75. 

v.  Van    Vechten,    142,    167,    219, 
247. 

v.  Whitmarsh,  561. 

v.  Wilhite,  470. 

v.  Yeck,  454. 
Thompson's  Appeal,  146. 
Thomson  v.  Crane,  92,  180. 

v.  Dougherty,  199,  203,  209,  210. 

v.  Hester,  181. 
Thornberry  v.  Baxter,  258. 
Thornburgh  v.  Hand,  520. 
Thorne  v.  Bank,  451. 
Thornton  v.  Cook,  462. 

v.  Hook,  7. 

v.  Tandy,  490. 
Thorp  v.  Keokuk  Coal  Co.,  81. 
Thouron  v.  Pearson,  418,  419. 
Thrasher  v.  Bentley,  549. 
Threlkel  v.  Scott,  276. 
Throckmorton  v.  Chapman,  432. 

v.  Rider,  478. 
Thurber  v.  Blanck,   103,   no,   159,  161, 

173,  174,  175,  242. 
Thurston  v.  Rosenfield,  551. 
Tibbals  v.  Jacobs,  468. 
Tichenor  v.  Allen,  258. 
Ticknor  v.  McClelland,  454,  470. 
Ticonic  Bank  v.  Harvey,  167. 
Tiernan  v.  Poor,  280. 
Tiernay  v.  Claflin,  670. 
Tildesley  v.  Lodge,. 670. 
Tilford  v.  Burnham,  129. 
Tillinghast  v.    Bradford,   65,   637,   650, 

654,  657,  660. 
Tillman  v.  Heller,  478. 
Tillotson  v.  Wolcott,  90,  116. 
Tillou  v.  Britton,  705. 
Tilson    v.    Terwilliger,    459,    461,  488, 

49°-  493- 
Tilton  7'.  Beecher,  306. 

v.  Cofield,  260,  297,  315,  697,  702. 
Tisch  v.  Utz,  491. 
Tobev  v.  Leonards,  303. 
Tobie  &   Clark    Mfg.    Co.  v.  Waldron, 

1S3. 
Todd  v.  Lorah.  3S7,  388. 

v.  Monell,  35,  66. 

v.  Nelson,   193,  195,  196. 

v.  Sawyer,  640. 
Tognini  v.   Kyle,  7,  20,  399,  452,  465. 
Toker  v.  Toker,  77. 
Tolbert  v.  Horton,  140. 
Tolland  Co.  Ins.  Co.  v.  Underwood,  659. 


Tolles  v.   Wood,    84,  ;S,  650, 

661. 
Tolman  ?>.  Marlborough,  80. 

v.  Ward,  357. 
Tolputt  v.  Well! 
Tomlinson  t.  Matthews,  525. 
Tompkins  v.  Fonda,  66,  68,  1  17,  545. 

7'.  Hunter,  4''.  549.  : 

7'.  Nichols,  303,  468,  477.  478. 

v.  Purcell,  ti6,  1 5  \. 

v.  Sprout,  32,  346,  349. 
Toney  v.  McGehee,  7,  >i,  i_.  [97 
Toof  v.  Martin,  481. 
Tool  Co.  v.  Norris,  597. 
Tooley  v.  Bacon,  371. 
Topping  v.  Lynch,  457. 
Torbert  v.  Hayden.  628. 
Totten  7 .  Brady,  704. 
Towers  v.  Hagner,  524. 
Towle  v.  Hoit,  33,  480. 
Town  of  Norwalk  v.  Ireland,  526,  527, 

528. 
Town  of  Venice  v.  Woodruff,  263. 
Towne  v.  Fiske,  493. 

v.  Smith,  517. 
Townsend  v.  Early,  647. 

v.  Little,  463,  670,  (172. 

v.  Mayor  of   New  York,  245. 

v.  Stearns,  478,  567,  605,  606,  6<  '7. 

v.  Tuttle.  184 

v.  Whitney,  223. 

v.  Williams,  306. 
Townshend  v.  Windham,  76,  77,  209. 
Tracy  v.  Cover,  92. 

v.  Tuffly,  563,  612. 
Trade-Mark  Cases,  72. 
Traders'  Nat.  Bank  v.  Day,  452. 

v.   Steere,  707,  723. 
Tradesman   Pub.   Co.   v.   Knoxville  C. 

W.  Co.,  240. 
Traer  v.  Clews,  587. 
Train  v.  Kendall,  614. 
Traip  v.  Gould,  in. 
Trapnell  v.  Conklyn,  94. 
Trappes  v.  Meredith,  657. 
Trask  v.  Bowers,  463. 
Travers  v.  Ramsay,  452. 
Traynor  &  Keith,  ///  re,  640. 
Trefts  7'.  King,  673. 
Trego  v.  Skinner,  104,  259,  267. 
Tremain  v.  Richardson,  555. 
Trenton   Banking  Co.  v.  Duncan,  507, 

509- 
Tresch  v.  Wirtz,  94,  531. 
Treusch  v,  Ottenburg,  359,  502. 
Trezavent  7'.  Terrell,  180,  1S1. 
Trier  v.  Herman,  150,  365. 
Trimble  7\  Turner,  210. 

v.  Woodhead,  229,   230,  235. 
Tripp  v.  Vincent,  294. 
Troll  v.  Carter,  720. 
Trotter  v.  Watson,  493. 
Trough,  Estate  of,  542. 
Troughton  v.  Troughton,  76. 


Re/trencet']        TABLE    OF    CASES.        [are  to  pages. 


Troup  :■.  Smith,  514. 
Trovinger  v.  McBurney,  599. 
Trowbridge  v.  Milliard,  139,  520. 
Troxall  1 .  Applegarth,  7. 

Troy  v.  Smith,  477. 

Truax  v.  Slater,  489,  490,  491. 

Truesdell  v.  Bourke,  474. 

1 .  Sarles,  [95,  207,  273,  294,  504. 
Trull  i  ,  69S. 

Trumbull?.  Hewitt,  356,  361,  474,  501. 

v.  I  'nion  Trust  Co.,  563. 
Truscott  •■.  King,  391,  396. 
Trust  Co.  v.  Sedgwick,  326,  545. 
Truster  Relief  Act,  In  re,  51. 
Tryon  v.  Flournoy,  418,  421. 

V.  Whitmarsh,  6S5. 
Tucker  v.  Andrews,  360. 

v.  Drake,  92. 

v.  Parks,  301. 

V.  Tucker,  104,  543- 

v.  Zimmermar,  -•<><>. 
Tuckwood  v.  Hawthorn,  486. 
Tudor  v.  De  Long,  397. 
Tuite  v.  Stevens,   185. 
Tumlki  v.  Crawford,  30. 
Tupper  f.  Thompson,  100,  no. 

V.  Wise,  740. 
Turbeville  i\  Gibson,  407. 
Turlcy  v.  Massengill,  640,  660. 
Turner  v.   Adams,    140,   145,    167,  168, 
169. 

?■.  Douglass,  577. 

v.  First   Nat.  Hank,  263. 
Fi  'wler,  640. 

v.  Hallowell  Sav.  Inst.,  640. 

v.  Jaycox,   607,  608. 

t'.  Nye,  524. 

v.  Robinson,  260. 

v.  Turner,  183,  244. 

v.  Vaughan,  89. 
Turnley  v.  Hooper,  59. 
Tuthill  v.  Skidmore,  4S5. 
Tuttle  7'.  Turner,  297. 
Tuxbury  7\  Miller,  712. 
Tux  worth  ?'.  Moore,  464. 
Twyne's  Case,  36,  38,  46,48,49,  50,  51, 
52,  188,  375,  380,402,  412,  416,  443, 
447.  621,  741. 
Tyberandt  v.  Rauckc,  434. 
Tyler  v.  Angevine,  372,  496,  513. 

7.  Peatt,    140. 

v.  Tyler,  221,  222,  243,  381,  720. 
Tyler  Paper  Co.  v.  Orcutt-Killick  Lith. 
Co.,  421. 

1  'hi  v,  Dillon,  km),   101,  332. 

7'.  Robison,  452. 
1  Fhlfelder  v.  Levy,  n>=.  146. 
'  'lire  v.  Melum. 

Ullrich  v.  Ullrich,  102,  271,  526, 
Unangsl  v,  Goodyear  I.   K.   Mfg.  Co., 

I'M. 

Underwood  -.•.  Sutcliffe,   234,  235,  242, 
3'4. 


Union  Bank  :■.  Ellicott,  615. 

7.  Kansas  City  Bank,  135,  387. 
Union  Nat.  Bank  v.  Reed,  280. 

v.  Warner,     313,    314,    322,    324, 

342.7"7- 
Union   Stock  Yards  Bank  v.  Gillespie, 

83- 
Union    Trust  Co.    v.   Southern   Inland 

Nav.  &  Imp.  Co.,  297. 
United  States  v.  Amer.    Bell  Tel.  Co., 
219,  2S7. 

v.  Amistad,  29,  113. 

7'.  Beebee,  509. 

v.  Budd,  304. 

v.  Griswold,  204,  341,  406,  492. 

i'.  Hooe,  34,  391. 

v.  Lotridge,  416. 

v.  Stiner,  194. 

v.  Thirty-six     Barrels     of    High 
Wines,  500. 

v.  Throckmorton,  147. 

7\  Union  Pacific  Ry.,  99. 

v. Wilson,  no. 
Updike  7'.  Ten  Broeck,  392. 

7'.  Titus,  392. 
Upshur  7'.  Briscoe,  339. 
Upton  v.  Englehart,  237. 

v.  McLaughlin,  284,  513,  515. 

7-.  Tribilcock,  237,  240,  268. 
Usher  7'.  Hazeltine,  211,  667. 
Utterson  v.  Vernon,  37. 

Valentine,  Matter  of,  86. 

v.  Austin,  29S. 

v  Lunt,  666,  670. 

v.  Richardt,  293,  324,  325,  330. 
Van  Alstyne  v.  Cook,  298. 
Van  Bibber  v.  Mathis,  20,  368,  540. 
Van  Buskirk  :\  Warren,  123. 
Vance  i-.  McNabb  Coal,  etc.,  Co.,  237. 

7'.  Phillips,  368. 

v.  Sch rover,  242. 
Yanderpoel  v.  Gorman,  614,  615. 

7'.  Van  Yalkenburgh,  251,  259. 
Van  Deusen  v.  Sweet,  336. 
Van  Doren  v.  Mayor,  etc.,  245. 
Van  Dyck  7'.  McCjuade,  279. 
Van  Etten  v.  Hurst,  158. 
Van  Heusen  7\  Radcliff,  143,  232. 
Van  Home  ?■.  Campbell,  640. 
Van  Kleeckv.  Miller,  147,259,  291,  534. 
Yanmeter  v.  Estill,  454,  626. 
\'.in  Nest  7'.  Yoe,  556,  573. 
Van  Patten  v.  Burr,  596. 
Van  Raahe  ,-■.  Harrington,  676,  686,  691. 
Van  Rensselaer  v,  Dennison,  640. 

7'.  Van  Rensselaer,  330. 
Van   Schaick   v.  Third  Ave.  R.  R.  Co., 

81. 
Van  Valkenburgh  v.  Torrey,  47. 
Van  Weel  ?'.  Winston,  273,  274. 
Y.m  Wickle  7'.  Calvin,  223. 
Van  Winkle  v.  Armstrong,  569. 

v.  McKee,  717. 


References']        TABLE    OF    CASKS.        [are  i 


Van  Wy  v.  Clark,  717. 

Van  Wyck  v.  Baker,  276,  316,  317,  341. 

v.  Seward,  181,   183,  191,  208. 
Vernum  v.  Hart,  616. 
Vasser   v.    Henderson,    128,    140,    172, 

176. 
Vattier  v.  Hinde,  670. 
Vaughan  v.  Thompson,  31. 
Vause  v.  Woods,  335. 
Veazie  v.  Somerby,  449. 
Veeder  v.  Baker,  269. 
Venable    v.   Bank   of    the    U.    S.,    267, 

406. 
Venice  v.  Woodruff,  263. 
Verner  v.  Downs,  177. 
Vernon  v.  Morton,  556,  573. 
Verplank  v.  Sterry,  189,  383. 
Verselius  v.  Verselius,  281. 
Vertner  v.  Humphreys,  528. 
Very  v.  McHenry,  517. 
Vick  v.  Lane,  253. 
Vietor  v.  Levy,  419,  703,  704. 

v.  Nichols,  613. 
Violett  v.  Violett,  357. 
Virginia  F.   &  M.  Ins.  Co.  v.  Cottrell, 

275- 
Vogler  v.  Montgomery,  31,  92. 
Vogt  v.  Ticknor,  476. 
Von  Sachs  v.  Kretz,  489. 
Voorhees  v.  Bonesteel,  94,  274,  303,  531, 
532. 

v.  Carpenter,  233,  709. 

v.  Howard,  in,  140,  179. 

v.  Seymour,  140,  476,  708. 
Voorhis  v.  Gamble,  251. 
Voshell  v.  Hynson,  338. 
Vredenbergh  v.  White,  448. 
Vreeland  v.  N.  J.  Stone  Co.,  1,  505. 
Vrooman  v.  Turner,  81. 

W.  v.  B.  (32  Beav.  574),  729. 

Wabash  St.    L.   &    P.  Ry.  Co.  v.  Ham, 

205,  237. 
Waddams  v.  Humphrey,  482. 
Waddell  v.  Lanier,  in,  228. 
Waddingham  v.  Loker,  7. 
Wade  v.  Rusher,  105. 
Wadhams  v.  Gay,  114. 
Wadsworth  7'.  Lyon,  223. 

v.  Schisselbauer,  128. 

v.  Williams,    196,    198,  229,  363, 
491. 
Wafer  v.  Harvey  Co.  Bank,  420,  500. 
Wager  v.   Hall,  4S1. 

v.  Link,  81. 
Waggoner  v.  Speck,  58. 
Wagner  v.  Law,  no,  247. 

v.  Smith,  34. 
Wait  v.  Bull's  Head  Bank,  401. 

v.  Day,  385 
Waite,  Matter  of,  239,  614,  738. 

?'.  Harper,  712. 
Wake  t.  Griffin,  534. 
Wakeman  v.  Dalley,  9,  12,  568. 


Wakeman  v.  Grover,  [30,  ■'•",  592. 
Waldele   v.    X.    \      I     nti    !  &  II.  R.  R. 

R.  Co.,  487,  4S8. 
Walden  v.  Murdock,  4(15,  41.'.,  7 
Waldman  v.  O'Donnell,  117. 
Wales  ?'.   Bowdish,  75. 

t.  Lawrem  e,  [62,  [63,  -'71 . 
Walkenshaw  v.  Perzel,  482. 
Walker  ?■.  Adair.    714. 

?'.  Collins,  8,  6SS,  689,  I 

v.  Denne,  335. 

v.  Lovell,  1  -  1 

v.  Pease,  27s. 

v.  Powers,  219,  265,  2S7,  288. 

v.  Reamy,  539. 

7r.  Vincent,  (>4<),  642, 

7.  Walker,   543. 
Walkow  v.   Kingsley,  278. 
Wall  v.  Fairley,  215,  217,  264. 

v.  Provident  Inst.,  22S. 
Wallace  v.  Eaton,  251. 

v.  Lawyer,  58,  67. 

v.  Nodine,  445,  450,  470. 

v.    Penfield,    200,    201,    205,    208, 
297. 

v.  Smith,  660. 

v.  Treakle.  ~<  18. 
Waller  v.  Shannon,  259. 

v.  Todd,  158. 
Walradt  v.  Brown,  51,  244. 
Walsh  7'.  Ketchum,  437. 

v.  Mutual  L.  I.  Co.,  56. 
Walter  v.  Gernant,  470. 

v.  Lane,  16,  189,  194,  204. 

v.  Riehl,  259,  2(17. 
Walters  v.  Walters,  506. 

v.  Whitlock,  614. 
Walthall  v.  Rives,  270. 
Waltham  v.  Broughton,  5. 
Walton  v.  Bonham,  726. 

v.  Ely,  232. 

v.  Tusten,  720,  735. 
Wanner  v.  Snyder,  659,  663. 
Waples  Platter  Co.  v.  Low,  158. 
Ward  v.  Northumberland,  219. 

v.  Roy,  117. 

v.  Saunders,  492. 

v.  Trotter,  573. 

■v.  Webster,  552. 
Warden  :•.  Jones,  <><>. 

v.  Marshall,  464. 
Wardour  v.  Periston!,  500. 
Ware  v.  Galveston  City  Co.,  243. 

:■.  Gardner,  412. 
Waring  7'.  Mackreth,  305. 
Warmoth  v.  Dryden,  4\=. 
Warner?/.  Blakeman,  30,  ill,  114.  270, 
280,  324. 

?>.  Callendar,  105. 

v.  Daniels.  98. 

v.  Dove,  18S,  278. 

v.  Hopkins.  - 

v.  Jaffray,  553,  =^4.  61  i. 

v.  Littlefield,  485,  ?  I 


lxiv 


References']        TABLE    OF    CASES.        [are  to  pages. 


Warner:.  Mower,  615. 

v,  Norton,  41^.  452.  453.  459> 

:  .   Ferry.  372. 

.  Warren,  356. 
Warner  Glove  Co.  v.  Jennings,  703. 

Warren  :.  His  Creditors,  I 

r .   fi  »nes,  703. 

v.  Lee,  594. 

v.  Marcy,  29S. 

: .  Moody,  229,  230.. 

V.  Warren.  2- 

V.  Warren  Thread  Co.,  71,  72. 
.   Williams,  185,  491,  501. 
Warren  County  v.  Marcy,  298. 
Wartman  v.  Wartman,  353. 
Warw  ick  v.  Petty,  40S. 
Washban  i  v.  Washband,  35S,  376. 
Washburn  v.  Goodheart,  92. 

v.  1 1  untington,  278,  675. 

v.  Sprout    61 . 
Washer  v.  Brown,  338. 
Washington   Central   Hank  v.    Hume, 

56,  57,  541.  542. 
Washington  Union  Ins.  Co.  v.  Wilson, 

15- 
Waterbury  v.  Sturtevant,  402. 
Waterman  v.  Sprague  Mfg.  Co.,  507. 
Waters  v.  Dashiell,  231. 

1 .  Taylor.  5. 
Watkins  v.  Arms,  424. 

v.  Uorsett,  67. 

v.  Jones,  730,  733. 

v.  Worthington,  4S4. 

v.  Wortman,  153. 
Watkins  Nat.  Hank  v.  Sands,  597. 
Watkyns  v.  Watkyns,  639 
Watrous  v.  Lathrop,  17S. 
Watson  v.  Bourne,  517. 

v.  Dodd,  04. 

v.  Riskamire,  18,  360. 

v.  Sutherland,  99. 
Watson  ^S:  Woods,  In  re,  639. 
Watt  v.  Grove,  430. 
Watts  v.  Creswell,  695. 

V.  Wilcox,  249. 
Waverly  Nat.  Bank  7'.  Halsey,  601, 609. 
Way  v.  Bragaw,  200,  290. 
We  id  7'.  Gray,  640. 
Wear  v.  Skinnei,  286. 
Weare  v.  Williams,  675. 

1   i  .  Pier<  e,  521. 

Weatherbi  1        1       !.  rell,  717. 

r  v.  Fisher,  71. 

v.  I  l-t\  Hand,  140,    143,   177.  271, 

v.  Nugent,   377. 

I,  405. 
Webb  v.  Armisti  ad,  581. 

7 .  Helion,  i"r. 

v.  Ingham,  43H  526. 

v.  Read,  297. 

-■.  Thomas,  616. 
Weber  V.   Armstrong.  020. 

V.  Mi<:k,  24,  354,  549,  594,  596,  '.1  -. 


Weber  v.  Rothchild,  308. 

:■.  Weber,  139. 
Webster  v.  Clark,  139,  140,  142,  172. 

v.  Folsom,  107,  164. 

f.  Hildreth,  60. 

v.  Lawrence,  140,  158. 

v.  Peck,  462. 

7'.  Upton,  237. 

7 .  Withey,  667. 
Weed  7'.  Davis,  437. 

v.  Pierce,  51,  5S,  106. 
Weeden  z\  Hawes,  406. 
Weeks  v.  Hill,  36S,  3S6. 

v.  Prescott,  450. 
Weider  v.  Maddox,  549,  614. 
Weigtman  v.  Hatch,  131,  149,  172,  176. 
Weil  7'.  Lankins,  159. 
Weir  v.  Day,  51,    183,  244. 
Weis  v.  Dittman,  5C8. 

7'.  Goetter,  332. 
Weise  v.  Wardle,  255. 
Welch  v.  Bradley,  479. 
Welcker  v.  Price,  305. 
Welcome  v.  Mitchell,  274,  491. 
Welde  v.  Scotten,  222,  245 
Welles  v.  Fish,  514. 

7'.  March,  563,  564. 
Wellington  v.  Small,  118. 
Wells  v.  Knox,  252. 

v.  Langbein,  343,  632,  633. 

v.  Morrow,  671. 

71.  O'Connor,  146,  476. 
Welsh  v.  Britton,  57S. 

v.  Solenberger,  95,  249. 

7'.  Welsh,  224,  291. 
Wemyss  v  White,  87. 
Wendell  v.  Van  Rensselaer,  508. 
Werborn  v.  Kahn,  332,  70S. 
Werner  v.  Zierfuss,  359,  364,  408. 
Werts  v.  Spearman,  487. 
Wescott  Tr.  Gunn,  617. 
Wessels  v.  Beeman,  372. 

v.  McCann,  454. 
West  v.  Snodgrass,  33,  634. 
West  Coast  Grocery  Co.  v.  Stenson,  273. 
Westerman  v.  Westerman,  243. 
Western  Transp.   Co.   v.   Kilderhouse, 

269. 
Westmoreland  v.  Powell,  244. 
Weston  7'.  Blake,  288. 
West  Side  Bank  7'.  Pugsley,  114,  116. 
Wetherbee  ?■.  Baker,  253. 
Wetmore  7'.  Truslow,  87. 

V.  Wetmore,  84,   85,   86,   87,   638. 
650,  662. 

: .  Woods,  067. 
Weyand  v.  Tipton,  520 
Weymouth   v.   Chicago  &   N.   W.   Ry. 

Co.,  529. 
Whaley  v.  Dawson,  219. 
Wharton  v.   May,  479. 
Wheadon  V.   Huntington,  502. 
Wheat  roft  v.  Hickman,  581. 
Whedbee  7'.  Stewart,  20. 


References]        TABLE    OF    CASES.        [are  to  page 


Wheelden   v.  Wilson,  17,  371,  400,  411, 

43".  434- 
Wheeler  v.  Hillings,  396. 

v.  Konsc,  452. 

v.  Millar,  26S. 

v.  Sage,  724. 

v.  Wallace,  325. 

v.  Wheedon,  267. 
Whipple  v.  Pope,  607. 
Whitaker  v.  Gavit,  569. 

v.  Whitaker,  392. 

v.  Williams,  569. 
Whitbread  v.  Jordan,  674,  675. 
Whitcomb  v.  Fowle,  579. 
White  v.  Banks,  555. 

v.   Benjamin.   14,   319,   398,  418, 
479,  526,  527,  536,  609. 

v.  Bogart,  475. 

v.  Cotzhausen,  594,  595,  596,  607, 
702,  706. 

v.  Davis,  318,  593. 

v.  Fagan,  573. 

v.  Geraerdt,  156. 

v.  Givens,  92. 

v.  Hall,  154. 

v.  Kuntz,  711,  713. 

v.  McPheeters,  353. 

v.  Perry,  7,  8,  9,  30,  49S. 

v.  Thomas,  660. 

v.  White,  65,  657,  660. 
White's   Bank   of  Buffalo  v.  Farthing, 

215,  216,  218,  313,  314,  317.  335. 
Whitesel  v.  Hiney.  27S. 
Whiting  v.  Barrett,  88. 
Whitney  v.    Davis,    104,    140,   143,  144, 
146,  159,  160,  161,    162,    171, 

174.  332. 

v.  Levon,  624. 

v.  Marshall,  165. 

v.  Rose,  432. 
Whiton  v.  Snyder,  522,   524,  530. 
Whitridge  v.  Whitridge,  516. 
Whittaker  v.  Amwell  Nat.  Bank,  348. 

v.  Merrill,  552. 
Whittington  v.  Jennings,  76. 
Whittlesey  v.  Delaney,  146,  276,  476. 
Wich  v.  Parker,  309. 
Wickham  v.  Miller,  52. 
Wicks  v.  Hatch,  356. 
Wieting  v.  Bellinger,  641. 
Wigsfin  v.  Bush,  712. 
Wiggins    v.    Armstrong,    7,    101,    143, 
148. 

v.  McDonald,  Si. 
Wilcox  v.  Fitch,  51. 

v.  Hovvland,  354. 

v.  Kellogg,  102. 
Wilcoxen  v.  Morgan,  438,  697. 
Wiles  v.  Suydam,  26S. 
Wiley  v.  Carter,  733. 

v.  Gray,  528. 

v.  Knight,  19. 
Wilkerson  v.  Schoonmaker,  476. 
Wilkes  v.  Ferris,  607. 
E 


Wilkinson  v.  Babbit! . 

■'  ■  Paddoi  k,  313]  317.  545- 

7'.  Vale,   [53, 
Willetts  v.  Vandenburgh,  [48. 
Williams  v.  Ayrault, 

v.  Bankhead,  24'). 

v.  Banks,  204,  212,  223,  437. 

v.  Barnett,  399. 

v.  Benedict,  136. 

v.  Carle,   544. 

v.  Clink,  722. 

v.  Davis,  29,  206. 

v.  Evans,  j<  >. 

7'.  Ewing,  297. 

v.  Harris,  28,  523,  526,  527. 

v.  Hart,  493. 

v.  Higgins,    717,  718. 

v.  Hubbard,  97. 

i'.  Jackson,  671  >. 

v.  Kirtland,  135. 

v.  Leech,  640. 

v.  Lomas,  77. 

v.  Lord,  12. 

v.  Merritt,  229. 

v.  Michenor,  160. 

v.  Xeel,  290. 

v.  Rawlins,  32. 

v.  Sexton,  115. 

v.  Spragins,  272,  275. 

v.  Thorn,  84,  85,  86,  87,  115    638, 
650,  661. 

v.  Whedon,  563,  579. 

v.  Williams,  493. 

v.  Winsor,  232,  626. 
Williamson   v.    Brown,    (.72,   673,    674, 
6S3,  6S9. 

v.  Goodwyn,  415. 

v.  Williams,  7,  303,  325,  493. 
Willison  v.  Desenberg,  407. 
Willoughby  v.  Willoughby,  670. 
Wilmerding  v.  Jarmulowsky,  676. 
Wilson  v.  Anthony,  512. 

v.  Berg,  567. 

v.  Clark,  494. 

v.  Forsyth,  214,  557,  ?(>?. 

v.  Hill,  465. 

v.  Horr,  294,  702. 

v.  Hunter,  694. 

v.  Jordan,  415. 

v.  Kohlheim,  iSS. 

v.   Lazier,  12. 

v.  Lott,  405,  434. 

v.  McMillan,  94,  95, 

v.  Marion,  360, 
686. 

v.  Pearson,  365. 

v.  Perrin,    136. 

v.  Prewett.  357,  690. 

v.  Robertson,   339,  3S9,  51 
609. 

v.  Russell,  391. 

v.  Spear,  357. 

v.  Sullivan,  630. 

v.  Watts,  29. 


Ixvi 


i  m]      TABLE   (  >F   CASES.      ["r' 


Wilson   Bros.  W.  vv  T.    C  >.     .  ! ' 

547- 
Wilt  v.  Franklin,  2 
Wimbish  v.  Tailbois,  45. 
Winans  z .  <  »rav<  -.  718. 

Winch's  Appeal,  245. 
Winchester  v.  Charter.  190,   191 

407,  437. 
+98. 
tddy , 
Winchester  &    P.    Mfg.   Co.  v.  Creary, 

490,  491- 
Windhus  v.  Bootz,  377. 
Windstandley  v.  Stipp,  272. 
Win  field   Nat.  Bank  v.  Croco,  523,  610, 

Wingler  v.  Sibley,  626. 
Winkle y  v.  Hill,  629. 
Winsli  iw  v.  \)>  msman, 
Winsor  v.  McLellan,  230. 

v.  .Mills,  640,  643. 
Wisconsin  Granite  Co.  v.  Gerrity,  142, 

176,  1--. 
Wise  v.  Tripp,  So. 

v.  Wheeler,  493. 

v.  Wilds,  432. 

v.  Wimer. 
Wisner  v.  Barnet,  316. 
Wiswall  v.  Sampson,  136. 
Wiswell  v.  Jarvis.  553. 
Witherwax  v.  Riddle,  414. 
Withrow  v.  Biggerstaff,  501. 
Winner's  Appeal,  333. 
Witz  v.  Osburn,  194. 
Wolf  v.  Arthur,  355,  357. 
Iraj .  577. 

v.  Stix,  339. 
Wolfe  v.  (Tallin.  332. 
Wolfer  v.  Hemmer,  640. 
Wolford  v.  Farnham,  3S7. 
Wollaston  r1.  Tribe,  77. 
Wollensak  v.  Reiher,  2-3,  284. 
Wood  v.  Amory,  273. 

v.  Carpenter,    2-3,    284,  2S5,  693, 

v.  Chambers,  31,  8S. 

'   dapin,  247. 
:•.  Clark,  <). 

1    mrad,  567. 
v.  Dixie,  365,  705. 
v.  Dummer,  237. 
v.  Goff's  Curator,  340. 

1  [arrison,  529. 

Hum,  340,  342. 
.  .  Robinson,  268,  I  71. 

- 
v.  Sidney    Sash,    etc.,  Co.,  249, 
252,  259. 

v.  United  States,  500. 
Woodbridge  t.  Allen,  517. 

ltf>n,  523. 
Wood  burn  v.  Mosher, 
Woodhull  v.  Whittle,   393. 


Imeston  v.  Walker,  646. 
Woodruffs.  Bowles,  357. 
Woods  v.  Bugbey,  454,  466. 

v.  James.  285. 

v.  Morrell,  305. 
Woodward  v.  Brooks,  614. 

-■    Marshall.  581. 

:■.  Wyman,  3S1. 
Woodworth  v.  Paige,  545. 

7.  Sweet,  531,  536. 
Wi  m  ildridge  1 .  Gage,  183. 
Wooten  v.  Clark,  33.  4S0. 

V.  Steele,  171. 
Wordall  v.  Smith,  446,  463. 
Wurman  v.  Kramer,  453,  463. 
Wormley  v.  Wormley,  671. 
Worseley   v.    Demattos,    29,    399,    419, 

422,  619. 
Worthington  v.  Bullitt,  340,  437. 

v.  Shipley,  437. 
Worthy  v.  Brady,  352,  353. 
W.  O.  Tyler  Paper  Co.  v.  Orcutt-Killick 

Lith.  Co.,  421. 
Wray  '■.  Davenport,  35. 
Wright  v.  Campbell,  150,  156,  166. 

v.  Davis,  515. 

V.  Delafield,  2 

v.  Hencock,  409. 

- .  Lee,  549. 

r.  Linn,  497. 

v.  McCormick,  431,  443,  454. 

v.  Mack,  293. 

v.  Mahaffey,  423. 

v.  Nostrand,  99,  115. 

v.  Oroville  M.  Co.,  113. 

v.  Towle,  492. 

v.  Wheeler,  302. 

v.  Wright,  382. 

v.  Zeigler,  547. 
Wyatt  '■.  Brooks,  299. 
Wyckoff  v.  Carr,  489. 
Wylie  v.  White,  660. 
Wyman  7'.  Brown,  197,  672. 

7'.  Mathews,  594. 
Wynne  :■.  Cornelison,  283. 

7'.  Mason,   525,  526,  540. 

Xenia  I'.ank  7'.  Stewart,  100. 

Yale  v.  Bond,  451. 
Yardley  v.  Torr,  1S2,  379. 
Yates  v.  Law,  524. 

v.  Yates,  469,  492. 
Yates  County  Nat.  Bank  v.  Carpenter, 

S9,  90. 
Yeatman  7\  Savings  Inst.,  230. 
Yeaton  ?■    Lenox,  216. 
Yeend  -■.  Weeks,  182. 
Yocum  v.  Bullit,  132. 
York  7'.  Bright,  5 14. 

-■.  Merritt,  712. 

:'.  Rockwood,  279. 
Yost  7'.  I  ludiburg,  437. 
Youmans  7'.  Boomhower,  55,  88. 


References]       TABLE    OF    CASES.       [are  t 


Ix 


:\  11 


Young  v.  Rrush,  560. 
v.  Clapp,  596. 
v.  Edwards,  15. 
v.  Frier,  149. 
v.  Heermans,  21,   25,   34,  46,  66, 

181,  277,  480. 
v.  Lathrop,  700. 
v.  McClure,  453,  461. 
v.  Parker.  260,  521. 
v.  Ward,  341. 
v.  Willis.  35. 
v.  Young,  660. 


Youngs  v.  Carter,  134,  543. 

Zabriskie  v.  Smith,  552. 

Zane  v.  Fink,  721 », 

Zell  Guano  Co.  v.  Heatherly,  294,  558. 

Zick  v.  Guebert,  666. 

Zimmer  v.  Miller,  371.  400,  \t>>.  413. 

Zimmerman  v.  Heinrichs,  1 

v.  Willard,  277. 
Zoeller  v.  Riley,  299,  312,  666,  670. 
Zoll  v.  Soper,  223,  2G4. 
Zuver  v.  Clark,  24O. 


Gijsm>  :  Cmj 


FRAUDULENT    CONVEYANCES 


CREDITORS'    BILLS. 


FRAUDULENT  CONVEYANCES 


CREDITORS'  BILLS. 


CHAPTER  I. 


INTRODUCTORY  OBSERVATIONS.  —  GROWTH  OB 
THE  LAW  CONCERNING  FRAUDULENT  CON- 
VEYANCES.—PHASES  OF  THE  SUBJECT. 


§    1.  Severity  of    the  Roman    law  — 
Modern  changes. 

2.  Prevalence  of  fraudulent  trans- 

fers —  The  cause. 

3.  Scope  of  the  inquiry. 

4.  Forms  of  relief. 

5.  ,  Onus   as   to  fraud  —  Suspicions 

insufficient —  Absence  of  pre- 
«•  )      sumptions. 

7.  Judge  Black's  views. 

8.  Proof  of  moral  turpitude. 

9.  Fraud     in     fact    and    fraud     in 

law. 

10.  The  cases  considered. 

11.  Words    "hinder,    delay,    or    de- 

fraud." 

12.  Word  "disposed"  construed. 


i  V'j.  No  definition  of  fraud. 

14.  Restraints  upon  alienation. 

15.  Fraudulent  conveyances  -    Char- 

acteristics and  classes. 

16.  Fraudulent  conveyances  at  com- 

mon   law  — Statutes    declara- 
tory. 

17.  Covinous  transfers  of  choses  in 

action. 

18.  Early  statutes  avoiding  fraudu- 

lent conveyances. 

19.  Statute,  13  Eliz.  c.  5,  and  its  ob- 

ject. 

20.  Its  interpretation  and  construc- 

tion. 

21.  Statute,  27  Eliz.  c.  4. 

22.  Twyne's  Case. 


"The  rule  is  universal,  whatever  fraud  creates,   justice  will  destroy.  —  Vice-Chancellor  Van 
Fleet  in  Vreeland  v.  Xcw  Jersey  Stone  Co.,  29  N.  J.  Eq.  190. 

§  1.  Severity  of  the  Roman  law  — Modern  changes.  —  It 
has  been  truly  observed  that  the  protection  and  preserva- 
tion of  the  rights  of  creditors  must  be  a  fundamental 
policy  of  all  enlightened  nations.1     The  method  by  which 


1  Story's  Eq.  Jur.  §  350  ;  Creditors 
are  "a  favored  class,"  Fouche  v. 
Brower,  74  Ga.  251  ;  Gable  v.  Colum- 


bus Cigar  Co..  140  Ind.  563,  566,  38  N. 

E.  Rep.  171.  citing  the  text. 


INTRODUCTORY   OBSERVATIONS. 


this  protection  may  be  extended  and  rendered  practically 
effectual  is,  however,  a  problem  very  difficult  of  solution. 
The  barbarous  practice  which  prevailed  among  the 
ancient  Romans  of  putting  an  insolvent  to  death,  or  sell- 
in^  him  into  slavery,1  pictures  to  our  imaginations  the 
stron^  legal  and  moral  foundation  which  a  pecuniary 
obligation  had  in  the  minds  of  the  people  in  early  times. 
The  penalty  for  the  failure  to  pay  a  debt  was  as  severe 
as  that  which  is  now  ordinarily  imposed  upon  criminals 
for  the  commission  of  the  most  heinous  of  crimes.2 


1  Holmes' Common  Law,  p.  14.  Bays: 
•'  This  line  of  thought,  together  with 
I  be  quasi  material  conception  of  legal 
obligations  as  binding  the  off  ending 
body  which  has  been  noticed,  would 
perhaps  explain  the  well-known  law 
of  the  Twelve  Tables  as  to  insolvent 
debtors.  According  to  that  law,  if  a 
man  was  indebted  to  several  cred- 
itors and  insolvent,  after  certain  for- 
malities they  might  cut  aphis  bodj 
and  divide  it  among  them.  If  there 
was  a  single  creditor  he  might  put 
his  debtor  to  death  or  sell  him  as  a 
slave." 

'  After  the  judicial  proof  or  con- 
fession of  the  debt,  thirty  days  of 
grace  were  allowed  before  a  Etonian 
was  delivered  into  the  power  of  bis 
fellow-citizens.  In  this  private  prison, 
twelve  ounces  of  rice  were  his  daily 
food  :  he  mighl  be  bound  with  a 
chain  of  fifteen  pounds'  weight ;  and 
his  misery  was  thrice  exposed  in  the 
market-place,  to  solicit  the  com- 
passion  of  his  friends  and  country- 
men. At  the  expiration  of  sixty 
days,  the  debt  was  discharged  i>>  the 
loss  of  libertj  or  life  ;  the  insolvent 
debtor  was  either  pnt  to  death,  or 
Bold  in  for<  ign  slavery  beyond  the 
Tiber  ;  but  it  several  creditors  weir 
alike  obstinate  and  unrelenting,  thej 
might   legally   dismember  bis  body, 


and  satiate  their  revenge  by  this 
horrid  partition.  The  advocates  for 
this  savage  law  have  insisted,  that 
it  must  strongly  operate  in  deterring 
idleness  and  fraud  from  contracting 
debts  which  they  were  unable  to  dis- 
charge." Gibbon's  History  of  the 
Decline  and  Fall  of  the  Roman 
Empire,  vol.  iv. ,  pp.  372-373.  It 
seems  incredible  that  the  following 
extract  could  ever  have  found  its 
way  into  an  English  report:  "If  a 
man  be  taken  in  execution,  and  lie  in 
prison  for  debt,  neither  the  plaintiff 
at  whose  suit  he  is  arrested,  nor  the 
sheriff  who  took  him,  is  bound  to 
find  him  meat,  drink,  or  clothes ;  but 
he  must  live  on  bis  own,  or'on  the 
charity  of  others  ;  and  if  no  man  will 
relieve  him,  let  him  die  in  the  name 
of  God,  says  the  law  ;  and  so  say  I." 
Byde,  Justice,  in  Manby  v.  Scott,  1 
Mod.  132  ia.  d.  1663).  In  Maine's 
Ancient  Law,  11th  ed.,  p.  321,  it  is 
said:  "Considered  historically,  the 
primitive  association  of  Conveyances 
and  Contracts  explains  something 
which  often  strikes  the  scholar  and 
jurisl  as  singularly  enigmatical,  I 
mean  the  extraordinary  and  uniform 
severity  of  very  ancient  systems  of 
law  to  debtors,  and  the  extravagant 
powers  which  they  lodge  with  cred- 
itors." 


§  2  INTRODUCE  >RV    OBSER\  A  riONS.  3 

The  chains  which  held  a  debtor  in  the  power  of  his 
creditor  have  one  by  one  been  broken,1  but  the  sacredness 
of  a  promise  to  pay  a  debt,  notwithstanding  the  abroga- 
tion of  the  ancient  penalties,  is  still  voluntarily  cherished 
by  the  mass  of  mankind.  Yet,  unfortunately,  the  protec- 
tion and  preservation  of  the  rights  of  creditors  is  often 
the  last  consideration  with  a  numerous  class  of  careless 
or  dishonest  insolvents.  Satisfied  of  utter  inability  to  pay 
maturing  debts,  their  remaining  property  is  frequently 
diverted  to  inequitable  purposes  or  squandered  with  reck- 
less profusion.  The  confiding  creditor,  when  driven  to 
the  necessity  of  seeking  a  discovery  of  equitable  assets, 
often  finds  at  the  end  of  the  litigation  nothing  but  a  mass 
of  worthless  securities  or  "a  beggarly  account  of  empty 
boxes."2  The  underlying  reasons  for  this  deplorable 
condition  of  affairs  will  be  briefly  considered. 

§2.  Prevalence  .of  fraudulent  transfers  —  The  cause. — 
Since  the  general  abolition  of  imprisonment  for  contract 
debts,  dishonest  people  have  grown  bolder  and  more 
reckless,  and  the  power  of  creditors  to  enforce  payment 
of  just  obligations  has  been  correspondingly  diminished. 
This  humane  reform  in  our  law,  which  was  inspired  by 
the  desire  to  relieve  honest  but  unfortunate  debtors  from 
the  painful  consequences  formerly  incident  to  insolvency, 
is  now  eagerly  availed  of  by  unscrupulous  people,  who 
contract  obligations  with  little  expectation  and  no  proba- 
bility of  fulfilling  them.  Abolition  of  imprisonment  for 
debt  removed  the  chief  barrier  and  preventive  of  fraudu- 
lent conveyances,  viz.  :  the  terror  of  the  debtor's  prison. 
The   personal   liberty  of  the   debtor  being  no   longer  ;it 


1  "The  tendency  of  legislation  for  tirely  prevent,  the   efforts  of  unfeel- 

the  last  century  has  almost  uniformly  ing  creditors  to  oppress   and    punish 

been  in  favor  of  the  poor  but  honest  him   for    his   poverty."       Stevens   v. 

debtor,  and  the  object  of  nearly  every  Merrill,  41  N.  H.  315. 
law  upon  the  subject  has  been  to  dis-         2Burtus  v.  Tisdall,  4  Barb.  (N.  Y. 

courage  and  discountenance,  or  en-  590. 


4  INTRODUCTORY  OBSERVATIONS.  §2 

stake,  the  natural  tendency  has  been  to  promote  reckless 
and  extravagant  expenditures,  and  to  encourage  and  foster 
wild  business  speculations. 

The  cost  of  every  reform  must  be  borne  by  some 
person  or  class  of  persons,  and  creditors  are,  at  the  present 
time,  paying  the  great  price  exacted  by  this  radical  change 
in  remedies.  The  collection  of  a  debt  by  ordinary  pro- 
cess of  execution  against  property  on  a  judgment  is  now, 
comparatively,  a  rare  occurrence.  Hence  we  have  in  our 
modern  jurisprudence  a  perplexing  problem  with  which 
our  forefathers  were  little  vexed, —  i.  e.,  the  question  how 
to  neutralize  or  avoid,  in  favor  of  creditors,  colorable  or 
covinous  transfers  of  property  which  this  violent  change 
in  remedies  has  rendered  it  difficult,  if  not  impossible,  to 
wholly  prevent  or  suppress.  Collusive  voluntary  convey- 
ances and  secret  fraudulent  trusts  and  reservations  of  a 
thousand  dyes,  calculated  to  hinder  and  defraud  creditors, 
are  the  constant  and  daily  subject  of  investigation  in  our 
courts.  .The  temptation  of  debtors  who  have  not  the 
skill  to  acquire  property  honestly,  or  who  have  been  over- 
whelmed by  some  unavoidable  disaster,  to  enrich  them- 
selves, or  their  trusted  relatives,  at  the  expense  of  credit- 
ors, by  some  transaction  "wearing  a  deep  complexion  of 
fraud, "  seems  to  be  irresistible.  This  is  especially  the 
case  in  a  country  such  as  ours,  where  the  comforts  and 
delights  which  accumulated  property  brings  are  so  acces- 
sible and  well  guarded,  and  in  which  the  acquisition  of 
wealth  may  be  regarded  as  a  profound  passion.  It  may 
be  possible  to  pity  the  infirmity  of  the  human  mind  sink- 
ing under  an  approaching  pressure  of  distress,  and  resort- 
ing to  fraudulent  means  of  protection  and  provision  for  a 
family,  but  the  law  cannot  approve  or  sanction  such  trans- 
actions.1 Probably  the  most  severe  trial  to  which  an 
honest  man  can   be  subjected  is   the   inability  to  pay  his 

Crofl  v.  Townsend,  3  Desuus.  (S.  C.)  229. 


8  3  SCOPE   OF   INQUIRY.  5 

debts,  even  by  the  application  of  all  his  means.  He  for- 
gets to  render  unto  C?esar  the  things  which  are  Cesar's. 
He  is  assailed  by  temptations  of  interest,  of  pride,  of 
shame,  of  affection,  to  wander  from  the  straight  line  of 
duty  and  integrity,  while  at  the  same  time  he  is  intrusted 
by  the  law  with  dominion  over  property  which  equitably 
and  justly  should  be  devoted  to  his  creditors.1 

The  quantity  of  litigation  engendered  by  fraudulent 
conveyances  is  appalling,  and  the  cunning  devices  and 
intricate  schemes  resorted  to  by  debtors  to  elude  the  vig- 
ilance of  creditors  would,  if  no  moral  turpitude  was  in- 
volved, challenge  admiration.  The  condition  of  the  body 
of  our  law  upon  this  subject  is  far  from  satisfactory,  and 
may  be  said  to  still  be  in  a  formative  and  unsettled  state. 

§3.  Scope  of  the  inquiry. —  It  will  be  our  purpose  to 
elucidate  the  principles  of  law  affecting  conveyances 
made  by  debtors  in  fraud  of  creditors,  both  in  this 
country  and  in  England,  to  collate  the  authorities,  and 
to  point  out,  somewhat  at  length,  the  practical  methods 
by  which  such  collusive  trusts  can  be  successfully  exposed 
and  unraveled,  the  property  regained  for  creditors,  and 
the  prevalent  modern  tendency  of  debtors  to  hinder, 
delay,  and  defraud  their  creditors,  by  colorable  transfers 
and  secret  trusts,  correspondingly  repressed.  Bills  filed 
to  reach  equitable  assets,  not  subject  to  execution,  will 
necessarily  receive  incidental  consideration. 

The  power  of  a  creditor  to  inflict  anything  in  the 
nature  of  a  punishment  upon  his  debtor  being  practically 
abrogated  in  civil  procedure,2  his  right  to  a  thorough  and 


1  Hafner  v.  Irwin,  1  Ired.  (N.  C.)  See  Waltham  v.  Broughton,  2  A.tk. 
Law,  499.  43.     Nor    to    exercise    any   censorial 

2  It  is  not  the  function  of  a  court  of  authority.  See  Waters  v.  Taylor,  -J 
equity  to  consider  fraud  in  the  light  Ves.  &  B.  299.  Chancery  jurisdiction 
of  a  crime,  nor  to  punish  the  guilty  in  cases  of  fraud  may  !><•  invoked  in  1 
party  by  imposing  exemplary  costs.  civil  but  not  in  a  criminal  point  of 


6  1  I  >RMS    i  '1     RELIEF.  §  4 

searchinL:  investigation  as  to  transfers  of  the  debtor's 
property,  in  the  disposition  of  which  the  creditor  may 
justly  claim  to  have  an  equitable  interest,1  at  least  to  the 
extent  of  his  demand,  should  manifestly  be  facilitated. 
Such,  we  are  happy  to  notice,  is  the  general  modern 
tendency  of  the  law,  and  one  of  the  aims  of  this  treatise 
will  be  to  show  the  need  of  a  still  further  enlargement  of 
these  facilities.  The  practical  details  of  procedure  in 
this  class  of  litigation  will  receive  particular  attention. 
The  rights  of  bona  Jide  purchasers  and  grantees  of  debtors 
for  valuable  consideration  will  necessarily  be  embraced 
in  the  discussion 

^  4.  Forms  of  relief. —  The  general  purpose  of  creditors' 
actions,  it  may  be  observed,  is  two-fold  ;  first,  to  reach 
assets,  such  as  choses  in  action,  which,  by  reason  of  their 
intrinsic  nature,  cannot  be  taken  on  execution  at  law  ; 
and  second,  to  recover  property,  whether  tangible  or 
intangible,  which  has  been  fraudulently  alienated  by  the 
debtor.  ~  In  the  one  case  the  creditor  comes  into  court 
"  to  obtain  satisfaction  of  his  debt  out  of  the  property  of 
the  defendant,  which  cannot  be  reached  by  execution  at 
law  ;  "  in  the  other  case  he  proceeds  "  for  the  purpose  of 
removing  some  obstructions  fraudulently  or  inequitably 
interposed    to    prevent    a    sale    on    execution."3        It    is 


view.      In    Hamilton    Nat.     Bk      v  an  equitable  interest  in  the  property 

Balsted,  134  N    Y.  522.  :'>l   X.  E.  Rep.  of  their  respective  debtors— it  being 

900,  the  court  Bay,   "It  a  fraudulent  tin-    foundation   of    trusting  them  — 

transferee  sell  the  property  before  the  which  the  Jaw  will,  under  certain  cir- 

commencement    of   tin-  action   to  set  cumstauces,  enforce."    See  also  $T14. 

aside  the  transfer,  a  judgment  for  the  '•'See  Chap.  III. 

value  of  tin    interests   transferred  to  3Cornell  v.  Railway,  22  Wis.    264; 

liini  may  be  recovered,  but  however  Beck  v.  Burdett,  1  Paige  (N.  Y.)  305. 

lalousthi  fraud  may  be  the  court  ln  Jones  v.  Green,  1  Wall.  331,  Field, 

is    powerless    i"    award     judgment  . I.,  said:  "  A  court  of  equity  exercises 

against  him  for  a  Bum  exceeding  such  its  jurisdiction  in  favor  of  a  judgment- 

value."  creditor  only   when   the  remedy  a£- 

v.  Johnson,  To  Me.  261,  forded    him   at    law  i-  ineffectual  to 

where  the  court'say :  "  Creditors  have  reach  the  propertj   of  tin'  debtor,  or 


§5 


ONUS    AS    TO    FRA1   D. 


believed  that  as  to  the  first  class  of  cases  the  jurisdiction 
of  equity  in  favor  of  creditors  was  created  to  supplement 
the  imperfect  relief  given  by  execution. 

§  5.  Onus  as  to  fraud  —  Suspicions  insufficient  —  Absence  of 
presumptions. —  The  great  obstacles  to  the  effective 
development  of  the  branch  of  our  law  under  considera- 
tion from  the  creditor's  standpoint  are,  the  natural  tend- 
ency of  the  courts  not  to  presume  fraud,1  in  the  absence 
of  substantial  proof  of  it,  and  the  extreme  difficulty 
attendant  upon  showing  that  a  transaction,  fair  and  per- 
fect on  its  face,  and  having   every  semblance  of  validity,2 


the  enforcement  of  the  legal  remedy 
is  obstructed  by  some  incumbrance 
upon  the  debtor's  property,  or  some 
fraudulent  transfer  of  it."  See  Scott 
v.  Neely,  140  U.  S.  113,  11  S.  C.  Rep. 
712  ;  Wiggins  v.  Armstrong,  2  Johns. 
Ch.  (N.  Y.)  144  ;  Talley  v.  Curtain,  54 
Fed.  Rep.  45. 

1  See  Crawford  v.  Kirksey,  50  Ala. 
591;  Kempner  v.  Churchill,  8  Wall. 
369;  Erb  v.  Cole,  31  Ark.  556;  Pusey 
v.  Gardner,  21  W.  Va.  469;  Toney  v. 
McGehee,  38  Ark.  427;  Matthai  v. 
Heather,  57  Md.  484;  White  v.  Perry, 
14  W.  Va.  86;  Hord's  Adm'r  v.  Col- 
bert. 28  Gratt.  (Va.)  49;  Williamson  v. 
Williams,  11  Lea  (Tenn.)  356;  Tog- 
nini  v.  Kyle,  15  Nev.  464;  Hempstead 
v.  Johnston,  18  Ark.  123;  Thornton  v. 
Hook,  36  Cal.  223;  Foster  v.  Brown, 
65  Ind.  234;  Parkhurst  v.  McGraw,  24 
Miss.  134;  Henckley  v.  Hendrickson, 
5  McLean  170;  Bartlett  v.  Blake,  37 
Me.  124;  Waddingham  v.  Lokei\  44 
Mo.  132;  Kellogg  v.  Slawson,  15  Barb. 
(N.  Y.)  58,  affi'd;il  N.  Y.  302;  Ex 
parte  Conway,  4  Ark.  356;  Burgert 
v.  Borchert,  59  Mo.  80;  Herring  v. 
Wickham,  29  Gratt,  (Va.)  628:  Sem- 
mens  v.  Walters,  55  Wis.  684,  13  N. 
W.  Rep.  889;  James  v.  Van  Duyn,  45 
Wis.  512;  Fuller  v.  Brewster,  53  Md. 


359;  Grover  v.  Wakeman,  11  Wend. 
(N.  Y.)  192:  Troxall  v.  Applegarth, 
24  Md.  163;  Anderson  v.  Roberts,  18 
Johns.  (N.  Y. )  515;  Cunningham  v. 
Dwyer.  2:5  Md.  211);  Juzan  v.  Toulmin, 
9  Ala.  602;  Nichols  v.  Patten,  18  Mr. 
231:  Cowee  v.  Cornell,  75  N.  Y.  99; 
Killian  v.  Clark,  3  MacAr.  I  >.  C.)  379, 
afli'd  as  Clark  v.  Killian,  103  U.  S. 
766;  Jones  v.  Simpson,  116  TJ.  S.  615. 
6  S.  C.  Rep.  538:  Dexter  v.  McAfee, 
163  111.  508:  Mathews  v.  Rrinliar.lt, 
149  111.  635,  37  N.  E.  Rep.  85;  Robi 
v.  Buckley,  145  N.  Y.  215,  224,  39  N. 
E.  Rep.  966;  Phelps  v.  Smith,  116  ln.1. 
387,;17  N.  E.  Rep.  "602;  Fulp  v.  Bea- 
ver, 136  Ind.  319,  36  N.  E.  Rep.  250; 
Rider  v.  Hunt,  6  Tex.  Civ.  App.  238; 
Bank  of  Commerce  v.  Schlotfeldt,  40 
Neb.  212,  58  N.  W.  Rep.  727;  Robin- 
son  v.  Dryden,  lis  Mo.  534,  24  S.  W. 
Rep.  448;  Olson  v.  Scatt,  1  Col.  App. 
94,27  Pac.  Rep. 879;  Fortner  v.Whelan, 
87  Wis.  88,  58  N.  W.  Rep.  253;  lea- 
ders v.  Whallon,  74  Jinn  (N.  Y. 
26  N.  Y.  Supp.  614. 

-In  Graffam  v.  Burgess,  117  U.  S. 
180.  186,  6  S.  C.  Rep.  686,  the  courl 
say:  "It  i>  insisted  that  the  proceed- 
ings were  all  conducted  according  i<> 
the  forms  of  law.  Y.  rvlik.lv.  Some 
of  the  most  atrocious  Iran. Is  air  com- 


8  I  »NUS    AS   TO    FRAUD.  §  5 

the  guilty  participants  in  which  are  often  the  chief  witnesses 
in  subsequent  judicial  inquiries,  is,  in  fact,  vicious  and 
colorable.  Then  there  exists  in  some  quarters  an  uncon- 
scious or  mistaken  sympathy  with  or  for  debtors,  whose 
fraudulent  acts  and  transactions  bear  the  imprints  of 
intellectual  acuteness.  The  clever  or  brilliant  scoundrel 
too  often  escapes  with  his  ill-gotten  gains  in  the  maze  of 
admiration  excited  by  his  audacity.  Fraud,  it  is  also 
argued,  will  not  be  lightly  imputed,1  and  cannot  be  estab- 
lished by  circumstances  of  mere  suspicion.2  This  same 
general  proposition  may  be  stated  in  an  infinite  variety 
of  ways,  and  by  the  use  of  different  words.  Thus  irregu- 
larities and  carelessness  sufficient  to  arouse  a  suspicion  do 
not  supply  the  place  of  proof  of  fraud.3  The  presence  of 
fraud  will  not  be  presumed  where  an  instrument  admits 
of  an  opposite  construction.4  The  law  presumes,  in  the 
absence  of  evidence  to  the  contrary,  that  the  business 
transactions  of  every  man  are  done  for  an  honest  pur- 
pose. The  common  law,5  it  is  argued,  is  tender  of  presum- 
ing fraud  from  circumstances,  and  expects  that  it  be  made 
manifest  or  plainly  inferable.0    Courts  will  attribute  errors 


mitted    in    that    way.       Indeed,   the  3Je\vett  v.  Bowman,  29  N.  J.  Eq. 

greater  the  fraud  intended,  the  more  174. 

particular  che  parties  to  it  often  are  to  'Bank  of  Silver  Creek  v.  Talcott,  22 

proceed    according    to    the    snidest  Barb.  (N.  Y.)560;  Keagy  v.  Traut,  85 

forms  of  law."      s.   p.,   Schroeder  v.  Va.  390,    7  S.  E.  Rep.   329;    Nbrris  v. 

young,161TJ.  S.  339.16S.C.  Rep.  512.  Lake.  89  Va.  513,  16   S.  E.  Rep.  668; 

•Jones  v.  Simpson,  116  U.  S.  615,  6  Jacobs  v.  Allen.  18  Barb.  (N.  Y.)  550; 

Walker  v.  Collins.  59  Kellogg  v.  Slauson,  11  N.  Y.  302;  Crook 

Bep.    73;    Batch    v.    Bayley,   12  v.  Rinskopf,   105  N.  Y.  476,  12  N.  E. 

Oush.  (Mass.)  30;  Bamberger  v.  School-  Rep.  171. 

field,  160  U.  8.  L63,  L6  8.  C.   Rep.  225.  .lours  v.    Simpson,   116  U.  S.  615, 

Erb  \    Cole,  :;i  Ark.  556;    Pratl  \.  6  S.C.  Uep.  538;    Baughman  v.  Penn, 

Pratt,  '."•■  III.  L84;   Myers  v.  Sheriff,  21  3:5  Kan.  504,  6  Pac.  Rep.  890;    Hilgen- 

I...   \i,n.  17J:  White  v.   Perry,  11  \V.  berg  v.  Northup,  134  [nd.  94,  33  N.  E. 

Va.  86;    Bryanl   v.   Simoneau,  51    III.  Rep.  786;  Stark  v.  Starr,  1  Sawyer  15. 

327;  Buck  v.  Sherman,  2  Doug.  (Mich.)  ^Roberts  on  Fraud.    Conv.,  p.  12; 

176;  Jewett  v.  Bowman,  29  X.  .1.  Eq.  Leque  \.  Smith,  63   .Minn.  27,  citing 

171.    Batchelderv.  Whit-.  80  Va.  103;  the  text 
Daniel  v.  Vaccaro,  1 1    \  rl 


§  5  ONUS   AS   TO    FRAUD.  9 

to  mistake  rather  than  to  fraud,1  and  will  not  base  con- 
clusions of  fraud  upon  mistaken  or  careless  expressions 
of  opinion.2  A  dishonest  purpose  should  not  be  pre- 
sumed.3 Then  it  is  vaguely  asserted  that  fraud  is  a  fact 
which  must  be  proved.  Courts  will  not  strive  to  force 
conclusions  of  fraud,  is  the  language  employed.4  There 
must  be  something  more  than  mere  speculative  inference 
to  establish  its  existence.5  And  if  the  party  charging 
fraud  does  no  more  than  create  an  equilibrium,  he 
fails  to  make  out  his  case.6  In  Drinker  v.  Receiver 
of  Erie  Railway,7  Van  Fleet,  V.  C,  said:  "Although 
entertaining  painful  doubts  touching  the  honesty  and  fair- 
ness of  many  of  the  transactions  charged  to  have  been 
fraudulent,"  this  court  "  felt  constrained,  for  the  want  of  a 
sure  conviction  of  the  truth  of  the  evidence  mainly  relied 
on  to  establish  the  fact  of  fraud,  to  dismiss  the  complain- 
ant's bill."  As  we  shall  presently  see,  it  is  considered  not 
to  be  enough  to  create  a  suspicion  of  wrong.8  The  credi- 
tor must  prove  tangible  and  substantial  facts  from  which 
a  legitimate  inference  of  a  fraudulent  intent  can  be 
drawn.9  The  evidence  must  convince  the  understanding 
that  the  transaction  was  entered  into  for  a  purpose  pro- 


!Ayres  v.   Scribner,  17  Wend.  (N.     Toney  v.  McGehee,  38  Ark.  427:  G 1- 

Y.)  407:  Goodev.  Hawkins,  2  Dev.  Eq.  man  v.  Siinonds,  20  How.  360. 

(N.  C.)393.  6Kaine  v.   Weigley,  22  Pa.  St.  179  ; 

2  See  Hubbell  v.  Meigs,  50  N.  Y..480;  Bernheimer   v.    Rindskopf.  116  N.  Y. 
Wakeman  v.  Dalley,  51  N.  Y.  27.  436,  22  N.  E.  Rep.  1074. 

3  Raymond  v.    Morrison,   59    Iowa  1  52  N.  J.  Eq.  574. 

374,    13   N.    W.    Rep.   332;      Hager  v.  8 Crow  v.  Andrews. 'JI   Mo.  App.  159. 

Thomson,  1  Black,  80;  Grant  v.  Ward,  9Jaegar  v.    Kelley,    52    X.    Y.    276; 

64  Me.  239;  Jones  v.  Simpson,  116  U.  Sherman    v.    Hogland,    73    End.    177: 

S.   615,   6   S.  C.  Rep.  538;    Brown  v.  White  v.  Perry,  14  W.  Va.  86;   Bord's 

Dean,  52  Mich.  267,  17  N.  W.  Rep.  837;  Adm'r  v.  Colbert,  28  Gratt.  (Va.)   19; 

Wood  v.  Clark,  121   111.359,  12  N.  E.  Herring  v.  Wickham,  29  Gratt.  (Va.) 

Rep.  271;  Baughman  v.Penn,  33  Kan.  628;     Hasie  v.  Connor,  53  Kan.  721,  ::7 

504,  6  Pac.  Rep.  890.  Pac.  Rep.  128.  Circumstances  amount- 

4 Crawford  v.  Kirksey,  50  Ala.  591.  ingto  mere  suspicion  of  fraud  are  not 

5  Battles  v.  Laudenslager,  84  Pa.  St.  to  be  deemed  notice  of  it.     siiimis\. 

451;    Ex  parte  Conway,   4  Ark.  356;  Morse,  A  Hughes   582.     See  Grant  v. 

National  Bank,  97  U.  S.  80. 


IO  ONUS    AS   TO    FRAUD.  §  5 

hibited  by  law.1  It  may  be  circumstantial,  but  it  must  be 
persuasive.2  Hence  "  a  court  will  not  presume  fraud  and 
undue  influence  merely  from  the  fact  that  the  conveyance 
is  made  by  a  sister  to  a  brother  ;  " 3  nor  from  circumstances 
which  merely  indicate  unusual  generosity.4  Finch,  J.,  in 
delivering  the  opinion  of  the  New  York  Court  of  Appeals, 
said  :  "  Fraud  is  to  be  proved  and  not  presumed.5  It  is 
seldom,  however,  that  it  can  be  directly  proved,  and  usually 
is  a  deduction  from  other  facts  which  naturally  and  logic- 
ally indicate  its  existence.  Such  facts,  nevertheless,  must 
be  of  a  character  to  warrant  the  inference.  It  is  not 
enough  that  they  are  ambiguous,  and  just  as  consistent 
with  innocence  as  with  guilt.  They  must  not  be,  when 
taken  together  and  aggregated,  when  interlinked  and  put 
in  proper  relation  to  each  other,  consistent  with  an  honest 
intent.  If  they  are,  the  proof  of  fraud  is  wanting."6 
Daniels,  J.,  said,  in  Marsh  v.  Falker:7  "In  all  actions 
for  deceit  the  presumption  is  in  favor  of  innocence  ;  and 
on  that  account  the  intent  or  design  to  deceive  the  plain- 
tiff must  be  affirmatively  made  out  by  evidence." i  But 
courts  of  justice,  while  conceding  to  honest  acts  their  wide 
and  ample  defense,  must  look  through  the  devious  ways 
and   the    thin  gauze,  by  which  fraud  is  sought  to  be  hid- 


Pratt    \.  Pratt,  96  111.  184;    Lalone  6  Shultz  v.  Hoagland,  85  N.  Y.  467; 

'.     Dnited  States,  L64  U.  S.  257.  Bernheiiner  v.   Rindskopf,    116  N.  Y. 

'Lalone   v.  United  States,  164  U.  S.  436,  22  N.  E.  Rep.  1074.     See  Ames  v. 

257.  Gilmore,  59  Mo.  537;  Jewell  v.  Knight, 

Spicer  v.  Spicer,  22  J.  <V  s.  <  X.  Y.)  123  U.  S.  426,  8  S.  C.  Rep.  193. 

281.  MON.  Y.  566. 

lii-t   National   Bank  v.   Irons, '28  "See  Fleming  v.  Slocum,  18  Johns. 

N.  .1.  Eq  48.  (N.  Y.)  403;  Jackson  v.  King,  4  Cowen 

Citing   Grover    v.   Wakeman,    11  (N.  Y.)220;    Starr  v.  Peek,  1  Hill  (N. 

Wend.     (N.  Y.)?188.    's,..    Jones   v.  Y)  270;  Bamberger  v.  Schoolfield,  160 

Simpson,    lit;   r.  s.  615,  6  S.  C.  Rep.  U.  S.  168,  L6  S.  C.  Rep.  225;  Dexter  v. 

Bernheimerv.  Rindskopf,  L16N.  McAfee,  163  111.508. 
Y.   186,  22  N.  E.  Ri  p.  1074;    Baird  v. 
Mayor,  etc.,  of  N.  Y.  96  N.  Y.  567. 


ONUS    \S   TO    FRA1   D. 


I  1 


den,  and  must  not  let  it  go  scot-free   for  want  of  direct, 
explicit  and  positive  testimony.1 

§  6.—  The  badges  and  evidence  of  fraud  will  be  discussed 
presently.2  We  may  here  observe  that  mere  inadequacy 
of  consideration,  unless  extremely  gross,3  does  not  per  se 
prove  fraud.4  The  disparity  as  to  consideration 6  must 
be  so  glaring  as  to  satisfy  the  court  that  the  conveyance 
was  not  made  in  good  faith.6  Neither  can  fraud  be  pre- 
sumed unless  the  circumstances  on  which  such  presump- 
tion is  founded  are  so  strong  and  pregnant  that  no  other 
reasonable  conclusion  can  be  drawn  from  them,'  and  it 
seems  that  even  strong  presumptive  circumstances  of 
fraud  will  not  always  outweigh  positive  testimony  against 


1  Reynolds  v.  Gawthrop,  37  W.  Va. 
13,  16  S.  E.  Rep.  364.  In  Baer  v. 
Rooks,  50  Fed.  Rep.  900,  the  court  say: 
' '  It  is  the  prevailing  practice,  in  cases 
involving  an  issue  of  fraud  in  fact, 
for  the  court  to  repeat  to  the  jury  this 
trite  scrap  of  judicial  phraseology 
[fraud  is  never  presumed  but  must  be 
proved],  and  it  is  commonly  followed 
by  a  statement  that  fraud,  like  any 
other  fact,  may  be  proved  by  circum- 
stantial evidence;  but  it  would  be  an 
unwarranted  impeachment  of  the  in- 
telligence of  the  juries  of  this  country 
to  suppose  that  they  do  not  have  a 
knowledge  of  these  common  truths. 
Every  man  knows  that  fraud,  no  more 
than  murder,  trespass  or  debt,  is  pre- 
sumed against  a  man,  and  that  fraud, 
as  well  as  murder,  trespass"  or  a  debt, 
may  be  proved  by  circumstances  as 
well  [as  by  the  positive  testimony  of 
eye  witnesses." 

2  See  Chap.  XVI. 

3  Cobb  v.  Day,  106  Mo.  300. 17  S.  W. 
Rep.  323. 

4Kempner    v.     Churchill,  8  iWall. 
369  ;  Smith  v.  Henkel,  81  Va.  529. 
5  See  Chap.  XV. 


6Fuller  v.  Brewster,  53  .M.I.  361. 
Compare  Feigley  v.  Feigley,  7  Md. 
537  ;  Copis  v.  Middleton,  2Madd.  410  ; 
Ratcliff  v.  Trimble,  12  B.  Mon.  (Ky.) 
32.  In  Mobile  Savings  Bank  v.  .Mc- 
Donnell, 89  Ala.  447,  8  So.  Rep.  137, 
the  court  say:  "We  are  fully  aware 
that  the  view  we  have  taken  is  some- 
thing of  a  departure  from  the 
ally  received  doctrine  in  other  courts, 
as  well  as  former  dicta  of  this  court, 
which  are  to  the  effect,  in  general 
terms,  that  mere  inadequacy  of  price, 
short  of  a  disparity  so  gross  as  to 
shock  the  conscience  of  mankind,  is 
only  a  badge  of  fraud,  and,  of  itself, 
is  not  to  be  taken  as  establishing  the 
existence  of  evil  intent  ;  l>ut.  in  our 
jurisprudence,  that  doctrine,  it'  any 
weight  i  to  be  given  to  our  repeated 
enunciations  on  the  subject,  or  to  the 
reasons  upon  which  our  decisions  are 
based,  is  and  must  be  confined  to  sales 
other  than  in  the  paymenl  of  antece- 
,  dent'debts  by  insolvent  debtors  drawn 
in  question  by  other  creditors." 

"  Paxton  v.  Boyce,  1    T(  £.  311      Se< 
Clemens  v.  Brillhart,  17  Neb.  337. 


12  I  »NUS    AS    TO    FRAUD.  §  6 

it;1  nor  will  fraud  be  inferred  from  an  act  which  does 
not  necessarily  import  it.2  If  an  honest  motive  can  be 
imputed  equally  as  well  as  a  corrupt  one,  the  former,  as 
we  have  already  seen,  should  be  preferred.3-1 

Good  faith  in  business  transactions  is  a  settled  pre- 
sumption of  law,4  and,  manifestly,  as  we  have  seen,  the 
burden  of  proof  is  on  the  party  who  assails  good  faith  and 
legality.5'1  Many  an  important  case  has  been  wrecked  at 
the  trial,  or  abandoned  by  the  creditor,  on  account  of  the 
great  embarrassments  which  this  formidable  onus  imposed. 
This  presumption  is  the  creditor's  stumbling  block  on  the 
one  hand  and  the  shield  of  unscrupulous  debtors  on  the 
other.  The  creditor  is  constantly  forced  to  carry  the  war 
into  the  enemy's  country,  and  to  take  by  storm  the  forti- 
fications which  the  fraudulent  debtor  or  his  allies  have 
carefully  constructed  to  impede  or  repel  the  attack."  It 
is  said  in  Nicol  v.  Crittenden,0  that  it  is  impossible  for  a 
transfer  to  be  infraud  of  creditors  unless  it  is  made  with 
a  fraudulent  intent,  and  that  the  nature  of  the  intent  will 
not  be  presumed  as  matter  of  law,  but  is  to  be  inferred  by 
the  jury  from  the  facts  in  evidence.7  This  broad  state- 
ment  of  the   principle   is   at   least  debatable  and  will  be 


1  The  Short  Staple,  1  Gall.  104.  31  ;  .Marsh  v.  Falker,  40  N.   Y.  566  ; 

,,  2  Toney  v.  McGehee,  38  Ark.  427.  Starr   v.    Peck,    1    Hill   (N.  Y.)   270; 

Herring  v.    Richards,  1   McCrary,  Beatty  v.  Fischel,  100  Mass.  448  ;  Jones 

574;    Roberts  v.    Buckley,  145  N.  Y.  v.    Simpson,    116  U.    S.    615,  6  S.  C. 

224  :  I  kmstanl   v.  University  of  Roch-  Rep.  538. 
ester,  L33  X.  V.  648.  5Gutzweiler  v.  Lackmann,  39  Mo. 

'Hager    v.   Thomson,  1    Black,  80;  (J1  ;    Silvers  v.  Hedges,  3  Dana  (Ky.), 

Cooper    v.    Galbraith,    3    Wash.  546;  439 ;  Wilson  v.  Lazier,  11  Gratt.  (Va.) 

Blaisdell  v.  Cowell.  M  Me.  870;  <;utz-  477;  Jones  v.  Simpson,  116  U.  S.  615; 

weiller  v.  Lackmann,  39  M<>.  91  ;  Rob-  6  S.  C.  Rep.  538  ;  Bambergerv.  School- 

erte  v.  Guernsey,  3  Granl  (Pa.)  387;  field,  160  U.  S.  149,  16  S.  C.  Rep.  225; 

Dougherty,  7   Yerg.  (Tenn.)  Hasie  v.  Connor,  53  Kan.  721,  37  Pac. 

322;  Richards  v.  Kountze,  4  Neb. 200;  Rep.  128. 
Beel  on  the  Righl  to  Begin  and   Re-         855Ga.497. 

ply,  p.  57;    Williams  v.  Lord,  75  Va.         'See  Jewell  v.   Knight,  123  U.   S. 

Wakeman   v.   Dalley,  51   N.  Y.  426,  435,  8  S.  (J.  Hep.  193. 


§  6  ONUS   AS   TO    FRAUD.  I  3 

considered  presently.1  Then  in  Cummings  v.  Hurlbutt,2 
it  was  asserted  that  to  set  aside  a  written  instrument  on 
the  ground  of  fraud,  the  evidence  of  the  fraud  must  be 
clear,  precise,  and  indisputable.  A  jury  should  not  In- 
permitted  to  find  fraud  sufficient  to  impeach  a  settlement 
in  writing,  on  any  fancied  equity,  or  on  vague,  slight,  or 
uncertain  evidence,  even  though  they  might  think  it  fairly 
and  fully  satisfied  them.  As  a  general  rule  the  transac- 
tion which  is  the  subject  of  attack  has  been  evidenced  in 
writing,  and  the  cases  show  that  a  deliberate  deed  or 
writing,  or  a  judgment  of  a  court,  is  of  too  much  solem- 
nity to  be  brushed  away  by  loose  and  inconclusive  evi- 
dence.3 But  an  instrument  which  is  part  of  the  same 
transaction,  explaining  the  purpose  of  a  deed  absolute  on 
its  face  may  be  relied  upon  to  show  fraud  connected  with 
the  deed  even  though  the  instrument  is  not  of  even  date 
with  the  deed.4 

Fraud,  on  the  other  hand,  is  rarely  perpetrated  openly 
and  in  broad  daylight.  It  loves  darkness  and  is  commit- 
ted in  secret  and  privately,  and  is  usually  shrouded  in 
mystery  and  hedged  in  and  surrounded  by  all  the  guards 
which  can  be  invoked  to  prevent  discovery  and  exposure. 
Its  operations  are  invariably  circuitous  and  difficult  of 
detection.5  The  proof  of  it  is  very  seldom  positive  and 
direct,6  but,  as  we  shall  presently  see,  is  dependent  upon 
very   many  little   circumstances7   and   conclusions  to  be 


1  See  Coleman  v.  Burr,  93  N.  Y.  31,  Adelsberger,  122  N.  Y.  4(57.  25  N.  E. 
and  cases  cited.     See  §§  9,  10.  Rep.  859. 

2  92  Pa.  St.  165.  5  Kaine  v.  Weigley,  22  Pa.  St.  L82. 

3  See  Howland  v.   Blake,  97  U.  S.  6  Strauss  v.    Kranert,   56   111.    254 
624;  Fick  v.  Mulholland,  48  Wis.  413,  Rea  v.  Missouri,  17  Wall.  532  ;  Dens- 
4    N.   W.    Rep.    346;    Kent    v.    Las-  more  v.  Tomer,  11  Neb.  118;    Lock- 
ley,  24  Wis.  654  ;  Harter  v.  Christoph,  hard  v.  Beckley,  10  W.  Va.  87;   Far- 
32  Wis.  246  ;  McClellan  v.  Sanford,  26  mer  v.  Calvert,  44  Ind.  209. 

Wis.  595.  "See   Jewell   v.   Knight,    128  U.S. 

4  Howell  v.  Donegan,  74  Hun  (N.  Y.)  426,  8  S.  C.  Rep.  193;  Reynolds  v. 
410,  26  N.  Y.  Supp.  805.  [See  Knowles  Gawthrop,  37  W.  \'a.  13,  16  S.  E. 
v.  Toone,  96  N.  Y.  534  ;   Kraemer  v.  Rep.  364. 


14  JUDGE    BLACKS   VIEWS.  §  J 

drawn  from  the  general  aspects  of  the  case.1     Hence  the 
field  of  inquiry  must  be  broad.-' 

§7.  Judge  Black's  views.  —  The  learned  Chief  Justice 
Black  urged  that  the  proposition  that  fraud  could  never 
be  presumed,  but  must  be  proved,  could  be  admitted  only 
in  a  qualified  and  very  limited  sense.  The  idea  that  it 
was  a  fundamental  maxim  of  the  law,  incapable  of  modi- 
fication, and  open  to  no  exception,  was  denied,  and  the 
principle,  as  commonly  declared,  was  said  to  have  scarcely 
enough  extent  to  give  it  the  dignity  of  a  general  rule. 
This  vigorous  writer  observes  :  "  It  amounts  but  to  this  : 
that  a  contract,  honest  and  lawful  on  its  face,  must  be 
treated  as  such  until  it  is  shown  to  be  otherwise  by  evi- 
dence of  some  kind,  either  positive  or  circumstantial.  It 
is  not  true  that  fraud  can  never  be  presumed.  Presump- 
tions are  of  two  kinds,  legal  and  natural.  Allegations  of 
fraud  are  sometimes  supported  by  one  and  sometimes  by 
the  other,  and  are  seldom,  almost  never,  sustained  by  that 
direct  and  plenary  proof  which  excludes  all  presumption. 
A  sale  of  chattels  without  delivery,  or  a  conveyance  of 
land  without  consideration,  is  conclusively  presumed  to 
be  fraudulent  as  against  creditors,  not  only  without  proof 
of  any  dishonest  intent,  but  in  opposition  to  the  most 
convincing  evidence  that  the  motives  and  objects  of  the 
parties  were  fair.  This  is  an  example  of  fraud  established 
by  mere  presumption  of  law.  A  natural  presumption  is 
the  deduction  of  one  fact  from  another.  For  instance  : 
a  person  deeply  indebted,  and  on  the  eve  of  bankruptcy, 
makes  over  his  property  to  a  near  relative,  who  is  known 
not  to  have  the  means  of  paying  for  it.  From  these  facts 
a  jury  may  infer  the  fact  of  a  fraudulent  intent  to  hinder 
and    delay   creditors.       A    presumption    of   fraud   is   thus 

'Newman    v.  Cordell,  43  Barb.  (N.         'White  v.  Benjamin,  150  N.  Y.  265 
Y.    us  161.    See  infra,  Chap.   XVI. 
<>n  [ndicia  or  Badges  of  Fraud. 


§  7  JUDGE   BLACK'S    VIEWS.  15 

created,  which  the  party  who  denies  it  must  repel  by  clear 
evidence,  or  else  stand  convicted.  When  creditors  are 
about  to  be  cheated,  it  is  very  uncommon  for  the  perpe- 
trators to  proclaim  their  purpose,  and  call  in  witnesses  to 
see  it  done.1  A  resort  to  presumptive  evidence,  there- 
fore, becomes  absolutely  necessary  to  protect  the  rights 
of  honest  men  from  this,  as  from  other  invasions."  8  The 
popular  statement  that  "fraud  will  not  be  presumed" 
must  be  accepted  understandingly,  for  it  certainly  can  be 
inferred  from  facts  and  circumstances,3  and  from  decep- 
tive assertions  and  incidents,4  and  it  is  considered  to  be 
error  to  charge  a  jury  that  they  cannot  predicate  fraud 
upon  inference  or  implication,5  or  that  the  proof  must  be 
"irresistible,"6  or  "clear  and  undoubted,"7  or  that  it 
must  be  established  beyond  a  reasonable  doubt,8  for  evi- 
dence that  satisfies  the  mind  will  support  a  conclusion  of 
fraud,  although  it  may  not  lead  to  a  conviction  of  abso- 
lute certainty.9  Fraud  is  hardly  ever  proven  positively, 
and  usually  is  shown  by  the  outlook,  the  circumstances 
and  environment  of  the  transaction,  and  the  situation  and 
relations  of  the  parties,  and  must  be  tested  by  ourknowl- 


1  See  Montgomery  Web  Co.  v.  Die-  Sturm  v.  Chalfant,  38  W.  Va.  243,  18 
nelt.  133  Pa.  St.  594,  19  Atl.  Rep.  428.  S.  E.  Rep.  451. 

2  Kaine  v.  Weigley,   22  Pa.  St.  183;  6  Carter  v.  Gunnels,  67  111.  270. 
Goshorn  v.  Snodgrass,  17  W.  Va.  717;  1  Abbey  v.  Dewey,  25  Pa.  St.  413. 
Sturm  v.  Chalfant,  38  W.  Va.  248,  18  8  Kane  v.  Hibernia  Ins.  Co.   39  X. 
S.  E.  Rep.  451.  J.  L.  697;  Lee  v.  Pearce,  68  N.  C.  76; 

3  Lowry  v.  Beckner,  5  B.  Mon.  (Ky.)  Sparks  v.  Dawson,  47  Tex.  13s;  Wash- 
43;  Sturm  v.  Chalfant,  38  W.  Va.  248,  ington  Union  Ins.  Co.  v.  Wilson,  7 
18  S.  E.  Rep.  451;  Goshorn's  Exr.  v.  Wis.  169;  ^Etna  Insurance  Co.  v. 
Snodgrass,  17  W.  Va.  766.  Johnson,  11  Bush  (Ky.)  587. 

4  Sturm  v.  Chalfant,  33  W.Va.  248,  »  Marksbury  v.  Taylor,  10  Bust 
260.18S.  E.  Rpp.  451;  Reynold's  Admr.  (Ky.)  519;  O'Donnell  v.  Segar,  35 
v.  Gawthrop,  37  W.  Va.  13,  16  S.  E  Mich.  367;  Lee  v.  Pearce.  OS  N.  I  \  76; 
Rep.  364.  Linn   v.  Wright,  18  Texas  317;  Lock- 

5  Bullock  v.  Narrott,  49  111.  62:  hard  v.  Beckley,  10  W.  Va.  87;  Young 
O'Donnell  v.  Segar,  25  Mich.  367;  v.  Edwards,  72  Pa.  St.  257;  Bryanl  v. 
Reed  v.  Noxon,  48  111.  323;  Goshorn's  Simoneau,  51  111.  324. 

Exr.    v.    Snodgrass,   17  W.   Va.   766; 


i6 


MoRAI.   TURPITUDE. 


§8 


edge  of  human  nature,  and  the  motives  and  purposes 
which  move  men  in  the  ordinary  transactions  and  affairs 
of  life.1 

§8.  Proof  of  moral  turpitude.  — The  authorities  have 
been  multiplying,  in  certain  quarters  at  least,  to  strengthen 
the  efforts  of  creditors  to  overcome  this  difficulty  arising 
from  the  presumption  of  validity  and  good  faith  in  litiga- 
tions to  reach  property  fraudulently  alienated.  Many  of 
the  cases  attach  little  importance  to  the  sworn  assertion 
of  perfect  good  faith  and  entire  honesty  on  the  part  of 
the  purchaser,'  or  of  the  seller,  and  the  courts  are  trying 
to  unravel  these  forbidden  transfers  without  exacting 
explicit  proof  of  moral  turpitude.3  The  intent  or  intention 
is  regarded  as  an  emotion  of  the  mind,  evidenced  by  acts 
and  declarations,  and,  as  acts  speak  louder  than  words,  if 
a  party  is  guilty  of  an  act  which  defrauds  another,  his 
declaration  that  he  did  not,  by  the  act,  intend  to  defraud, 
is  weighed  down  by  the  evidence  of  his  own  act.4     A  per- 


1  Reynold's  Admr.  v.  Gawthrop's 
Heir-,  37  W.  Va.  13,  16  S.  E.  Rep.  364. 
Sadden  v.  spader,  20  Johns. 
(N.  7.)  573,  573;  Hendricks  v.  Robin- 
son, 2  Johns.  Ch.  (N.  Y.)  300;  Fel- 
lows v.  Fellows,  I  Cow.  (N.  Y.)  709; 
Barrow  v.  Bailey,  5  Fla.  20;  Walter 
x.  Lane,  1  MacAr.  (D.  C.)  275. 

Mr.  May  says:  -'The  statute  is 
directed  nol  only  against  such  trans- 
fer- of  property,  as  are  made  with  the 
express  intention  of  defrauding  credi 
tors,  hut  ....  extends  a-  well  to 
such  as  virtually  and  indirectly  oper- 
ate tli'-  same  mischief,  by  abusing 
their  confidence,  misleading  their 
judgment,  or  secretly  undermining 
their  interests  ;  to  obviate  which  it 
has  gradually  grown  into  a  practice  to 
regard  certain  acts  or  circumstances 
as  indicative  of  a  so-called  fraudulent 
intention  in  the  construction  of  the 


statutes,  although  perhaps  there  was. 
in  fact,  no  actual  fraud  or  moral  tur- 
pitude.  It  is  difficult  in  many  cases 
of  this  sort,  to  separate  the  ingredients 
which  belong  to  positive  and  inten- 
tional fraud  from  those  of  a  mere 
constructive  nature,  which  the  law 
thus  pronounces  fraudulent,  upon 
principles  of  public  policy."  May  on 
Fraudulent  Conveyances,  p.  4. 

*  Babcock  v.  Eckler,  34  N.  Y.  633  ; 
Coleman  v.  Burr,  93  N.Y.  31  ;  Mande- 
ville  v.  Avery,  4  1  N.  Y.  St.  Rep.  4; 
Newman  v.  Cordell,  43  Barb.  (N.  Y.) 
156.  In  Booth  v.  Carstarphen,  107N.  C. 
395,401,13S.  E.  Rep.  375,  thecourtsay: 
"The  fraudulent  intent  of  a  party 
charged  with  fraud  in  any  transac- 
tion or  matter  appears  from,  and 
iim-t  be  determined  by,  acts  done  or 
omitted  to  be  done  —  their  nature,  con- 
nertinns,    purpose  and   effect    in    con- 


§  8  MORAL   TURP]  I  I   DE.  17 

son  would  not  be  likely  to  perform  or  accomplish  an  act 
and  afterwards  proclaim  that  it  was  prompted  by  corrupt 
motives.  The  moral  sense  is  much  weaker  in  some  men 
than  in  others,  and  it  would  be  a  strange  rule  which  made 
the  rights  of  one  man  dependent  upon  the  moral  sense  of 
another  man.  There  are  certain  rules  founded  in  experi- 
ence, and  established  by  law,  for  determining  the  validity 
of  transfers  under  the  statutes  concerning  fraudulent  con- 
veyances  ;  and  a  transgression  of  these  rules  will  justify 
courts  and  juries  in  avoiding  the  transaction  without 
regard  to  the  opinions  of  the  parties  to  it,  and  their  evi- 
dence should  have  little  weight.1 

In  French  v.  French,2  Lord  Chancellor  Cranworth 
remarked  :  "  I  shall  not  say  that  the  transfer  was  volun- 
tary ox  fraudulent,  but  simply  void  as  against  the  credit- 
ors of  William  French,"  Again  he  observed  in  Spackman 
v.  Evans:3  "I  do  not  attribute  moral  fraud  to  the 
appellant,  but  the  whole  transaction  was  fictitious."  So 
in  Backhouse  v.  Jett,4  Chief-Justice  Marshall  said  :  "  The 
policy  of  the  law  very  properly  declares  this  gift  void  as 
to  creditors,  but  looking  at  the  probable  views  of  the 
parties  at  the  time,  there  appears  to  be  no  moral  turpi- 
tude in  it." 5  This  principle  may  be  further  illustrated 
from  Gardiner  Bank  v.  Wheaton,0  where  the  court  say  : 
"  When  we  pronounce  the  transaction  between  the 
defendants,  in   respect  to  the  conveyance   from   Gleason 


templation  of  law.     Such  intent  does  the  thought  and  purpose  of  the  mind — 

not  depend  upon  nor  consist  in,  nor  is  the  intent  —  and  of  this  the  law  takes 

it  to  be  ascertained  from  simply  the  notice.'*     See  Chapter  XIV  on  Inten- 

thought  and  purpose  of  the  mind,  but  tion. 

it  depends  upon,  and  is  to  be  ascer-  '  Potter  v.  McDowell,  31  Mo.  78. 

tained  from  such  thoughts  and  pur-  ■  6  De  G.  M.  &  G.  103. 

poses   evidenced  and   manifested   by  3  L.  R.  3  Eng.  &  Ir.  A  pp.  189. 

and   taken    in    connection   with    the  4 1  Brock.  511. 

acts  done  or  not  done,  and  pertinent  5  See  Logan  v.  Brick,  '3   Del.  <  !h.  206. 

facts  and  circumstances.      It   is  the  6  8  Me.  381.     See  Wheelden    v.  Wil- 

act  or  thing  done  or  not  done  that  son,  44  Me.  11. 
gives  cast,  quality  and  character  to 
2 


[8  M<  IRAL    TURPITUDE.  §  8 

to  Cole,  as  fraudulent,  we  do  not  mean  to  insinuate  that 
there  was  any  moral  turpitude  on  the  part  of  Prince  ;  nor 
do  we  believe  there  was  any  ;  but  though  the  motives  of 
a  party  may  be  good  in  such  a  transaction,  still,  where 
the  design,  if  sanctioned,  would  defeat  or  delay  creditors 
.  .  .  ,  neither  law  nor  equity  can  sanction  the  proceeding  J 
and  on  that  account  it  is  termed  a  legal  fraud,  or  a  fraud 
upon  the  law."1  "  It  was  not  necessary,"  said  Dwight, 
C,  in  Cole  v.  Tyler,2  "that  there  should  be  any  actual 
fraudulent  intent.3  The  requisite  intent  may  be  inferred 
from  the  circumstances  of  the  case."4  The  act  may  be 
adjudged  covinous  although  the  parties  deny  all  inten- 
tion of  committing  a  fraud,5  and  it  is  not  necessary  to 
impute  to  the  parties  "a  premeditated  or  wicked  intention 
to  destroy  or  injure"  the  interests  of  others.0  A  man 
may  commit  a  fraud  without  believing  it  to  be  a  fraud.7 
The  statute,  13  Eliz.,  refers  to  a  legal,  and  not  a  moral 
intent  ;  that  is,  not  a  moral  intent  as  contradistinguished 
from  a  legal  intent.  It  supposes  that  every  one  is  capa- 
ble of  perceiving  what  is  wrong,  and,  therefore,  if  he  does 
that  which  is  forbidden,  intending  to  do  it,  he  will  not  be 
allowed  to  say  that  he  did  not  intend  to  do  a  prohibited 
act.  A  man's  moral  perceptions  may  be  so  perverted  as 
to  imagine  an  act  to  be  fair  and  honest  which  the  law 
justly  pronounces  fraudulent  and  corrupt.8  "  It  is  not 
important  what  motives  may  have  animated  the  parties," 
if  the  necessary  effect  of  the  disposition  is  to  hinder  and 

3<  e  Jenkins  v.   Lockard,   66    Ala.  Smith  v.  Reid,  134  N.  Y.  568,  31  N.  E. 

381;  Bibb  v.  Freeman,  59  Ala.  612.  Rep.  1082. 

•65  X.   Y.  77.      Compare   Smith  v.  6  Kirby   v.    Ingersoll,    1   Harr.    Ch. 

Reid,  134  X.  ¥.568,31  X.  K.  Rep.  1082;  (Mich.)  191. 

Course)    v.  Morton,  132  X.  Y.  556,  30  •■  Kirby  v.  [ngersoll,  1  Don-.  (Mich.) 

X    i:    Rep.  881.  17  7.  493. 

Citing  Mohawk  Bank    v.  A-twater,  '  Emma  Silver  Mining  Co.  v.  Grant, 

54.  L.  R.  17  Ch.  I).  122. 

impare  Watson   v.  Riskamire,  15  BGrover  v.  Wakeman,  11  Wend.  (N. 

Iowa,  238     Coleman  v.  Burr,  93  X.  Y.  Y.)225. 
31  :  Graham  v.  Chapman,  12  C.  B 


§  9  FRAUD    l\    I  A  i    I  . 


19 


delay  creditors.1  It  results  that  the  mental  operation  or 
emotion  of  the  debtor,  and  the  legal  conclusion  from  the 
acts  and  circumstances  may  be  diametrically  opposed.8"" 

§  9.  Fraud  in  fact  and  fraud  in  law. —  Some  of  the  authori- 
ties maintain  that  there  is  not,  for  any  practical  purpose, 
so  far  as  the  validity  of  a  particular  transaction  may  be 
concerned,  any  difference  between  fraud  in  fact  and  fraud 
in  law  ; 3  between  a  fraud  proved  by  direct  evidence,  and 
a  fraud  inferred  by  law  from  facts  which  are  consistent 
with  the  absence  of  an  actual  mental  intent  to  defraud. 
Whenever  the  effect  of  a  particular  transaction  with  a 
debtor  is  to  hinder,  delay,  or  defraud  creditors,  the  law 
infers  or  supplies  the  intent,  though  there  may  be  no 
direct  evidence  of  a  corrupt  or  dishonorable  motive,  but, 
on  the  contrary,  an  actual  honest,  but  mistaken,  motive 
existed.  The  law  interposes,  and  declares  that  every 
man  is  presumed  to  intend  the  natural  and  necessary  con- 
sequences of  his  acts  ;  and  the  courts  must  presume  the 
intention  to  exist,  when  the  prohibited  consequences 
must  necessarily  follow  from  the  act,  and  will  not  listen 
to  an  argument  against  it.4     Hence  it  has  been  remarked 


1  Moore  v.  Wood,  100  111.  451.  standing  the  invalidity  of  a  particular 

2  See  Chap.  XIV  ;  Coleman  v.  Burr,  provision."  Citing  Denny  v.  Bennett, 
93  N.  Y.  17  ;  Roberts  v.  Vietor,  130  N.  128  U.  S.  489,  496,  9  S.  C.  Rep.  134  ; 
Y.  600,  29  N.  E.  Rep.  1025 :  Sutherland  Cunningham  v.  Norton,  125  U.  S.  77. 
v.  Bradner,  116  N.  Y.  410,  22  N.  E.  8  S.  C.  Rep.  804;  Muller  v.  Norton, 
Rep.  554  ;  Johnston  v.  Tuttle  Bros.,  65  132  U.  S.  501,  10  S.  C.  Rep.  117:  I  >ar- 
Miss.  494.  Lhng  v.  Rogers,  22  Wend.  (X.  V 

3  See  §51.  In  Peters  v.  Bain.  133  Howell  v.  Edgar,  4  111.  417.  11'.); 
U.  S.  688,  10  S.  C.  Rep.  354,  the  court  Ellis  v.  Valentine,  65  Tex.  534. 

say:     "We  agree   with    the  Circuit        4Sims  v.  Gaines,  64  Ala.  396  :  I  *■  >i  >•  •  v. 

Court   that,  as  respects  fraud  in  law  Wilson.  7  Ala.  694;  Wiley  v.  Knight, 

as  contradistinguished  from  fraud  in  27  Ala.  336;  Potter  v.  McDowell,  31 

fact,  where  that  which  is  valid  can  be  Mo.  69.     See  Bentz  v.  Rockey,  69  Pa. 

separated  from  that  which  is  invalid,  St.  77;  Harman  v.  Hoskin,  56  Miss. 

without  defeating  the  general  intent,  142;  Allan  v.  McTavish,  8  Ont.  App. 

the  maxim  '  void  in  part,  voidin  toto,'1  Rep.  440,  and  cases  cited  ;  Col'  .'nan  \ 

does  not  necessarily  apply,  and  that  the  Burr,  93  N.  Y.  31,   and   cases  cited; 

instrument  maybe  sustained  notwith-  Schaible  v.  Ardner,  98  Mich.  70,  56  X. 


20  THE    CASKS    CONSIDERED.  §  IO 

that  where  a  conveyance,  by  its  terms,  operates  to  hinder, 
delay,  or  defraud  creditors,  the  intent  to  do  so  is  imputed 
to  the  parties,  and  no  evidence  of  intention  can  change 
that  presumption.  A  different  intent  cannot  be  shown 
and  made  out  by  the  reception  of  parol  testimony,  nor 
deduced  from  surrounding  circumstances.1  What  is 
meant  by  these  cases  is  that,  whether  the  fraudulent 
intent  is  reasoned  out  and  declared  by  the  court,  by  the 
proper  application  of  the  rules  of  legal  construction 
and  interpretation,  to  the  particular  transaction  or  instru- 
ment under  consideration,  or  whether  it  is  found  by  a 
jury  to  exist  as  matter  of  fact,2  in  either  case  the  transfer 
is  made  with  the  intent  to  defraud  creditors,  and  may  be 
avoided.  Hence  it  is  said  that  where  the  fraudulent  intent 
is  not  apparent  on  the  face  of  the  deed,  it  is  a  question 
of  fact  for  the  jury,3  and  the  court  has  not  the  power  to 
infer  the  intent.4 

§  10.  The  cases  considered. —  This   subject   may  perhaps 
be    illustrated    from   the    case    of  Harman    v.    Hoskins,5 


W.   Rep.  1105;  Morrill  v.  Kilner,  113  that   in   such   cases  the  question    of 

111.   318.     Compare  State  v.    Estel,   6  fraud  should  be  one  of  fact." 

Mo.  App.  6.     In   Wilt  v.  Franklin,  1  '  Farrow    v.    Hayes,   51    Md.    505 ; 

Binn.  (Pa.)  517,  the  court  observed  :  Green  v.  Trieber,  3  Md.  11.     See  Sang- 

"  Although   the   statute,    13   Eliz.,   is  stou  v.  Gaither,  3   Md.   40;  Malcolm 

bottomed   on   the  supposition  of  an  v.  Hodges,  8  Md.  418 ;  Inloes  v.  Amer. 

unmoral    intention,   yet  it    has   been  Ex.   Bank,   11   Md.    173;    Barnitz  v. 

judged   necessary  to   determine   that  Rice,  14  Md.  24  ;  Whedbee  v.  Stewart, 

certain  circumstances,  which,  in  their  40  Md,  414. 

nature,    tend    to    deceive    and    injure  -  Nicol    v.   Crittenden,    55    Ga.    497; 

creditors,  shall  be  considered  as  suffi-  Williams  v.  Evans,  6  Neb.  216. 

cii-nt   evidence  of    fraud.''      In   Ingle-  3  Van  Bibber  v.  Mathis,  52  Tex.  409. 

hart   v.  Thousand    [aland  Hotel  Co.,  See  Briscoe  v.  Bronaugh,  1  Tex.  327; 

109  N.   Y.  465,   the  court  say :  "The  Bryant  v.  Kelton,  1  Tex.  415 ;  Peiser 

ture   bas    been   averse    to    the  v.  Peticolas,  50  Tex.  638. 

rule,   at    one    time    adopted    by    the  'Ehrisman    v.    Robert,   GS  Pa.   St. 

courts,  tbat   fraud   in   such  cases  was  308;  Kelly    v.    Lenihan,  56   Ind.  450; 

a  question  of  law.  and  Bought  to  end  Tognini   v.   Kyle,    15   Nev.  468;  Mbn- 

the    controversy,    which    bad    raged  teith  v.  Bax,  4  Neb.  166. 

mosi   bitterly,  by  explicitly  enacting  -56  Miss.  142. 


§  IO  THE   CASKS   CONSIDERED.  21 

where  it  is  laid  down  that  the  intent  may  be  vicious, 
though  the  deed  is  fair  and  regular  upon  its  face,  and  a 
full  price  was  paid.  The  intent  must  then  be  proved 
aliunde.  In  cases  where  the  transaction  on  its  face  is 
fair,  if  it  sprung  from  the  motive  to  "hinder,  delay,  or 
defraud  "  creditors,  then  the  intent  is  purely  a  question 
of  fact  to  be  established  by  the  testimony.  But  a  party 
will  be  held  as  intending  the  natural  and  inevitable  legal 
effects  of  his  acts.  Hence  if  his  deed,  by  its  recitals, 
necessarily  operates  to  interpose  unreasonable  hindrance 
and  delay  to  creditors,  or  to  entirely  defeat  their  claims, 
the  question  of  intent  will  be  practically  a  conclusion  of 
law.1  A  deliberate  act  which  naturally  and  inevitably 
produces  a  certain  result,  must,  in  law,  be  held  to 
have  been  contrived  and  performed  to  carry  out  and  con- 
summate that  result.  The  court  in  such  a  case  arrives  at 
the  conclusion,  by  a  proper  construction  of  the  instrument, 
that  such  is  its  direct  and  inevitable  effect,  and  it  results, 
as  matter  of  law,  that  the  statute  is  satisfied.  In  other 
words,  the  transaction  itself  so  palpably  and  conclusively 
establishes  the  intent  that  testimony  upon  that  point  would 
be  superfluous,  and  a  finding  of  a  jury  of  an  intent  dif- 
ferent from  that  which  the  legitimate  construction  of  the 
instrument  furnishes,  would  be  erroneous.2  Thus  in 
Young  v.  Heermans,3  a  conveyance  by  a  debtor  of  all 
his  property,  real  and  personal,  without  consideration, 
and  in  trust  for  the  grantor's  benefit  during  his  life,  and 
after  his  death  for  the  payment  of  his  debts,  was  declared 
to  be  fraudulent  per  se  ;  no  evidence  aliunde  being  deemed 
necessary  to  establish  the  fraudulent  intent.  Proof  of  the 
intention  to  enter  into  the  prohibited  transaction  is  all 
that  is  requisite.     When  the  courts  declare  an  instrument 

1  Houck  v.  Heinzman,  37  Neb.  463.        3  66  N.  Y.  374.   See  Puller  v.  Brown, 

5  See  Dunham  v.  Waterman,  17  N.     76   Hun  (N.    Y.)  557,  38    N.  V.   Supp. 

Y.  21.  189  ;  Sloan  v.  Birdsall,  58  Hun  (X.  V.) 

321,  11  N.  Y.  Supp.  814. 


THE    CASES   CONSIDERED.  §  IO 

fraudulent  on  its  face,  it  does  not  necessarily  mean  that  it 
was  the  offspring  of  a  corrupt  intent  considered  as  a 
mental  operation,  but  that  u  it  is  an  instrument  the  law 
will  not  sanction  or  give  effect  to,  as  to  third  persons,  on 
account  of  its  susceptibility  of  abuse,  and  the  great 
danger  of  such  contracts  being  used  for  dishonest  pur- 
poses.1 

1 1  may  scarcely  be  proper  to  say  in  these  cases  that  there 
is  a  presumption  or  conclusion  of  law  that  the  transaction 
is  fraudulent,  but  rather  that  the  circumstances  of  the 
transaction,  or  the  transaction  itself,  or  the  necessary  and 
inevitable  inference,  furnish  conclusive  evidence  of  fraud  ; 
and  if,  against  such  evidence,  a  jury,  a  judge,  or  referee 
should  find  that  there  was  no  fraud,  a  new  trial  would  be 
granted,  not  because  any  legal  presumption  or  conclu- 
sion had  been  violated,  but  because  the  finding  was 
aeainst  the  weight  of  evidence  :  against  conclusive  evi- 
dence.'~  The  intent  is  gathered  from  the  instrument,  and 
no  external  aid  is  necessary  to  develop  it.3  The  fraud  is 
self-evident.4  But  to  find  fraud  as  matter  of  law  it  must 
so  expressly  and  plainly  appear  in  the  instrument  as  to  be 
incapable  of  explanation  by  evidence  de/io?'s.° 

Grover,  J.,  an  able  judicial  officer,  and  vigorous  writer, 
ignored  the  distinction  between  fraud  in  law  and  fraud  in 
fact,  in  these  words  :  "A  distinction  is  attempted,  in  some 
of  the  cases,  between  fraud  in  law  and  fraud  in  fact.  I 
think  there  is  no  solid  foundation  for  it.  When  upon  the 
face  of  the  assignment  any  illegal  provision  is  found,  the 
presumption  at  once  conclusively  arises  that  such   illegal 


'(Jay    v.  Bidwell,  7  Mich.  531,  dis-  8  Harman  v.  Hoskins,  56  .Miss.  145. 

Benting  opinion  of  Manning,  J.  *  Hardy  v.  Simpson,  13  Ired.(N.C) 

■Babcocb   v.   Eckler,  24  N.  Y.  632  ;  Law,  132,  L39 ;  Bigelow  on  Fraud,  p. 

[nglehari   v.   Thousand    bland  Hotel  468. 

Co.,  109  N.  Y.  454,:465.     SeeBrunerv.  Cheatham    v.    Hawkins,  76  N.  C. 

n,    189    Id. I.  6 109,  38   N.    E.  835. 

Rep.  818. 


£  IO  THE    CASES   CONSIDERED.  2$ 

object  furnished  one  of  the  motives  for  making  the  assign- 
ment;  and  it  is  upon  this  ground  adjudged  fraudulent 
and  void.  The  result  is  the  same  when  the  illegal  design 
is  established  by  other  evidence.  The  inquiry  is  as  to 
the  intention  of  the  assignor."1  Coleman  v.  Burr  ~  is  an 
extreme  illustration.  The  referee  found  that  the  convey- 
ance was  honest,  but  the  transaction  was  set  aside  because, 
from  the  facts  found,  the  inference  of  fraud  was  inevit- 
able. The  same  principle  is  enunciated  in  Roberts  v. 
Vietor.3 

"  Fraud,"  said  Mr.  Justice  Buller,  in  Estwick  v.  Cail- 
laud,4  "  is  sometimes  a  question  of  law,  sometimes  a 
question  of  fact,  and  sometimes  a  mixed  question  of  law 
and  of  fact."  Perhaps  it  would  be  more  accurate  to  say 
that  fraud  is  never  purely  a  question  of  law,  nor  exclu- 
sively a  question  of  fact,5  though  it  frequently  partakes 
more  largely  of  the  one  quality  than  of  the  other.  Fraud 
is  not  to  be  considered  as  turning  solely  on  intent  as  an 
emotion,  but  as  a  legal  deduction.  "  What  intent,"  said 
Ruffin,  J.,  is  in  law  fraudulent,  the  court  must  inform  the 
jury,  else  the  law  can  have  no  rule  upon  the  doctrine  of 
fraud;  and  every  case  must  create  its  own  law."6  Per- 
haps the  clearest  division  of  fraud  is  into  three  classes  ; 
first,  fraud  that  is  self-evident,  with  which  the  jury  have 
nothing  to  do ;  second,  fraud  which  depends  upon  a 
variety  of  circumstances  usually  connected  with  motive 
and  intent,  which  is  an  open  question  of  fact  for  the  jury, 


1  Oliver  Lee  &  Co.'s  Bank  v.  Talcott,  134  N.  Y.  575,  31  N.  E.  Rep.  1082  ;  Ro- 

19  N.  Y.  148.     See,  in  this  connection,  belts  v.   Victor,   130  N.  Y.  GOO,  29  N. 

Lukins  v.  Aird,  6  Wall.  79,  per  Davis,  E.  Rep.  1025. 

J.;  Burrv.  Clement,  9  Col.  1  ;  Stevens         :;  130  N.  Y.  600,  29  X.  E.  Rep.   L025. 
v.  Robinson,  72  Me.  381  ;    French  v.         *5  T.  R.  420. 

Holmes,  07  Me.  189;  Cunningham  v.  5  Foster  v.  Woodfin,  11  Ired.  i.V  I  .) 

Freeborn,    11    Wend.    (N.     Y.)     252;  Law,  339. 

Peters  v.  Bain,  133  U.  S.  670, 10  S.  C.         6  Leadmau  v.  Barns,  3  Dev.  i  X  I !.) 

Rep.  354.  Law,  146;  Parrish  v.  Danford,  18  Fed. 

-93  N.  Y.  31.     See  Smith  v.  Reid,  Cases.  1231,  1  Bond,  345. 


24 


WORDS    "HINDER,    DELAY,    OR   DEFRAUD. 


II 


with  instructions  as  to  what  constitutes  fraud  ;  third,  pre- 
sumptive fraud  where  the  presumption  may  be  rebutted.1 

§11.  Words  "hinder,  delay,  or  defraud."— To  hinder  and 
delay  creditors  is  to  do  something  which  is  an  attempt  to 
defraud,  rather  than  the  successful  accomplishment  of  a 
fraud  ;  to  put  some  obstacle  in  the  path,  or  interpose 
unjustifiably  some  period  of  time  before  the  creditor  can 
reach  his  debtor's  property  and  apply  it  toward  the 
liquidation  of  the  debt.2  The  words  "  hinder,"  "  delay,"  3 
and  "defraud"  are  not  synonymous.4  A  conveyance 
may  be  made  with  intent  to  hinder  or  delay  without  an 
intent  to  absolutely  defraud.      Either  intent  is  sufficient.5 


Hardy  v.  Simpson,  13  Ired.  (N.  C.) 
Law.  139.  In  Coburn  v.  Pickering,  3 
N.  H.  415,  Richardson,  C.  J.,  lays 
down  the  rule  that  whether  there  was 
any  trust  is  a  question  of  fact,  but  the 
trust  being  proved  or  admitted,  the 
fraud  is  an  inference  of  law  which 
the  court  must  pronounce.  His  exact 
language,  after  a  discussion  of  the 
authorities,  is  as  follows  :  "  It  thus 
seems  to  us,  to  be  settled,  as  firmly 
as  any  legal  principle  can  be  settled, 
that  the  fraud  which  renders  void 
the  contract,  in  these  cases,  is  a  secret 
trust,  accompanying  the  sale.  .  .  . 
It  is,  therefore,  very  clear,  that  fraud 
U  sometimes  a  question  of  fact,  and 
sometimes  a  question  of  law.  When 
the  question  is,  was  there  a  secret 
trust?  it  is  a  question  of  fact.  But 
when  the  fad  of  a  secret  trust  is  ad- 
mitted, or  in  any  way  established,  the 
fraud  is  an  inference  of  law,  which  a 
courl  is  bound  to  pronounce.."  So, 
upon  like  principle,  it  was  held  in 
Phelps  v.  curt..  80  III.  11'.',  not  to  be 

important     what     motive,     may     have 

animated  the  parties,  if  they  have  so 
disposed  of  the  property  thai  the 
necessary  effed  i.  to  binder  ami  delay 


creditors.  Such  a  disposition  is,  in 
judgment  of  law,  a  legal  fraud.  To 
the  same  effect,  also,  is  Power  v.  Al- 
ston, 93  111.  587;  Emerson  v.  Bemis, 
69  111.  53?  ;  Moore  v.  Wood,  100  111. 
454. 

2  Burnham  v.  Brennan,  42  N.  Y. 
Superior  Ct.  63. 

3  In  Read  v.  Worthington,  9  Bosw. 
(N.  Y.)  628,  Robertson,  J.,  said  :  "To 
hinder  any  one  in  bis  course  is,  neces- 
sarily, to  delay  him.  Not  being  able 
to  perceive  the  distinction,  I  must 
hold  that  none  exists.  Many  such 
pleonasms  are  to  be  found  in  old  Eng- 
lish statutes,  where  they  are  intro- 
duced for  caution's  sake,  more  than 
with  any  precise  idea  as  to  what  they 
were  intended  to  effect." 

4  Eickox  v.  Elliott,  22  Fed.  Rep.  21. 

5  Crow  v.  Beardsley,  0*  Mo.  439; 
Iv'upe  v.  Alkire,  77  Mo.  641  :  Buell  v. 
Rope,  6  A  pp.  1  )iv.  (  X.  Y.)  113  ;  Kaufer 
v  Walsb,  88  Wise.  63,  59  N.  W.  Rep. 
460.  But  in  Weber  v.  Mick,  181  111. 
520,  -'::  X.  E.  Rep.  (lie,  it  was  held  that 
an  instruction  to  the  effect  that  it  was 
not  necessary  to  show  that  the  con- 
veyance was  made  to  defraud,  but 
that  intent  to  hinder  and  delay  was 


§11  WORDS    "HINDER,    DELAY,    OR    DEFRAUD."  25 

The  statute  is  in  the  disjunctive  and  attempts  to  attach  a 
separate  and  specific  meaning  to  each  of  the  words  which 
it  employs.1  An  instance  of  hindrance  and  delay  within 
the  statute  is  given  in  a  case  in  Pennsylvania,  where  a 
debtor  departed  from  the  State  leaving  no  property  sub- 
ject to  the  process  of  his  creditor,  and  making  no  provi- 
sion for  the  payment  of  his  debts.2  A  better  illustration 
is  to  be  found  in  a  case  in  the  New  York  Court  of  Appeals, 
where  the  debtor  conveyed  his  property  in  trust  for  his 
own  benefit  during  his  life,  and  after  his  death  for  the 
payment  of  his  debts.3  A  conveyance  made  by  an  embar- 
rassed debtor  with  a  view,  which  was  known  to  the  pur- 
chaser, to  secure  the  property  from  attachment,  is  void  as 
against  creditors,  though  honestly  made,  the  debtor 
intending  that  all  creditors  should  be  paid  in  full.4  The 
authorities  avoiding  assignments  by  the  terms  of  which 
the  assignee  is  empowered  to  sell  upon  credit  are,  per- 
haps, more  in  point  than  any  of  the  illustrations  given. 
A  conveyance  of  real  estate  by  a  debtor  upon  the  under- 
standing that  the  grantee  should  hold  it  in  trust  for  the 
grantor,  and  as  fast  as  money  could  be  realized  therefrom, 
should  apply  it  to  the  payment  of  his  debts,  necessarily 
operates  to  hinder  and  delay  creditors.  A  debtor's  prop- 
erty is,  in  theory  of  law,  subject  to  immediate  process 
issued  at  the  instance  of  his  creditors,  and  the  debtor  will 


sufficient,  was  properly  refused.     In  '  Burgert  v.  Borchert,  59  Mo.  83. 

Dance  v.    Seaman,    11*  Gratt.     (Va.)  *  Heath  v.  Page,  63  Pa.  St.  108. 

778-782,    the  court  say:     "The  fact  3  Young    v.    Heermans,   66    N.   Y. 

that    creditors    may    be    delayed    or  374.     Sees.  p.  Graves  v.  Blondell,  To 

hindered,  is  not  of  itself  sufficient  to  Me.   194;  Henry  v.  Einman,  25  Minn. 

vacate  such  a  deed,  if  there  is  absence  199  ;  Macomber  v.  Peck,  39  Iowa  351  : 

of  fraudulent  intent.     Every  convey-  Lukins  v. Aird, 6  Wall.  78;  Donovan  v. 

ance  to  trustees  interposes  obstacles  Dunning,  69  Mo.  436 ;  Lore  v.  Dieri 

in  the  way  of  the  legal  remedies  of  19  J.  &  S.  (N.  Y.)  11 1. 

the  creditors,  and  may,  to  that  extent,  4  Kimball  v.   Thompson,   58    Mass. 

be  said  to   hinder  and  delay  them."  (4  Cush.)  446. 
See  Keagy  v.  Trout,  85  Va.  394,  7  S. 
E.  Rep.  329. 


WORDS    "HINDER,    DELAY,    OR    DEFRAUD."  §11 

not  be  permitted  to  hinder  or  delay  them  by  any  device 
which  leaves  it,  or  the  avails  of  it,  subject  to  his  control 
and  disposition  ;  and  it  makes  no  difference  that  the 
debtor  intends  to  apply  the  avails  of  it  to  the  payment  of 
his  debts.1  So  a  deed  of  trust  creating  a  lien  upon  person- 
alty for  an  indefinite  period,  the  natural  operation  of 
which  is  to  benefit  the  grantor,  is  fraudulent  as  to  credit- 
ors,- as  is  also  a  sale  on  a  credit  to  a  son  of  the  debtor  on 
the  eve  of  attachment  proceedings.3 

The  statute  seems  to  be  aimed  at  three  things  which  it 
is  supposed  insolvents  would  possibly  be  tempted  to  do 
for  the  purpose  of  avoiding  or  deferring  the  payment  of 
their  debts.  First,  they  might  dispose  of  their  property 
in  such  manner  as  to  interpose  obstacles  to  legal  process, 
with  intent  to  hinder  creditors  in  the  collection  of  their 
demands  ;  or,  second,  to  delay  payment  to  some  future 
period  ;  or,  third,  to  defraud  their  creditors  by  absolutely 
defeating  all  attempts  to  enforce  their  claims.  Any  one 
of  these  purposes  is  sufficient  to  avoid  the  transaction.4 
If  the  desi°m  of  a  transfer  is  a  lawful  one,  it  matters  not 
that  a  creditor  is  thereby  deprived  of  property  which 
mijjht  otherwise  have  been  reached  and  applied  to  the 
payment  of  his  debt.  Hence  it  is  that  a  general  assign- 
ment,5 or  a  preference,6  is  upheld,  though  each  is  often 
made  or  given  to  thwart  some  belligerent  creditor.7  The 
secret  motives  that  prompt  the  act  in  such  cases  are  unim- 


Smithv.Conkwright,28  Minn. 23.  128  O.  S.  273.281.9  S.  C. Rep. 65.  See, 

State  v.  Mueller,    10  Mo.  App.  87.  especially,  the  case  of  Nicholson  v. 

Blum    v.  McBride,  69  Tex.   60,  5  Leavitt,  6  N.  Y.  510,  10  N.  Y.  591. 

s.  W.  Rep.  641.  B  Hoffman  v.    Mackall,  5  Ohio  St. 

•  Burdick  v.   Post,  12  Barb.  (N.  Y.i  124;  Hefner  v.  Metcalf,  1  Eead(Tenn.) 

172;  affi'd  6  N.  Y.  522.    See  Pilling  v.  .")77  ;  Grover  v.  Wakeman,  11  Wend. 

on-.  13  Wis.  195    Burgerl  v.  Borchert,  (N.  V.)  194. 

59  Mo.  80  :  Crow  \.  Beardsley,  ns  Mo.  c  Hall  v.  Arnold.  15  Barb.  (N.  Y.) 

435;    Planters'    Bank    v.  The   Will. a  599;  Hartshorn  v.   Eames,  31  Me.  98. 

Mills.  60Ga,  168;  Sutton  v.  Banford,  'Hartshorn  v.  Eames,  31   Me.  98; 

11    Mich.   518;     Davenporl    v.   Cum-  Bolbird  v.  Anderson,  5  T.  R.  235. 

mings,  15  Iowa  219;  Means  v.  Dowd, 


§12  WORD  "disposed"  construed.  27 

portant.1  Speaking  of  devices  to  aid  the  debtor,  Davis, 
J.,  said  in  Robinson  v.  Elliott:-  "The  creditor  must 
take  care,  in  making  his  contract,  that  it  does  not  contain 
provisions  of  no  advantage  to  him,  but  which  benefit  the 
debtor,  and  were  designed  to  do  so,  and  are  injurious  to 
other  creditors.  The  law  will  not  sanction  a  proceeding 
of  this  kind.  It  will  not  allow  the  creditor  to  make  use 
of  his  debt  for  any  other  purpose  than  his  own  indemnity. 
If  he  goes  beyond  this,  and  puts  into  the  contract  stipula- 
tions which  have  the  effect  to  shield  the  property  of  his 
debtor,  so  that  creditors  are  delayed  in  the  collection  of 
their  debts,  a  court  of  equity  will  not  lend  its  aid  to 
enforce  the  contract."  A  debtor  cannot  take  the  law 
into  his  own  hands  and  attempt  to  secure  the  delay  which 
can  only  be  obtained  by  the  consent  of  the  creditors.3 

§  12.  Word  "disposed  "construed.  —  In  Bullene  v.  Smith,4 
it  appeared  that  section  398  of  the  Revised  Statutes  of 
Missouri,  authorized  an  attachment  to  issue  in  the  follow- 
ing, among-  other  cases  :  Where  the  defendant  had  fraud- 
ulently  conveyed  or  assigned  his  property  so  as  to  hinder 
or  delay  his  creditors  ;  where  the  defendant  had  fraud- 
ulently concealed,  removed,  or  disposed  of  his  property  or 
effects,  so  as  to  hinder  his  creditors.  The  court  held  that 
the  word  disposed,  as  here  used,  covered  all  such  aliena- 
tions of  property  as  might  be  made  in  ways  not  other- 
wise pointed  out  in  the  statute  :  for  example,  pledges, 
gifts,  pawns,  bailments,  and  other  transfers  and  aliena- 
tions which  might  be  effected  by  mere  delivery  and  with- 
out the  use  of  any  writing,  assignment,  or  conveyance. 
Other  species  of  conveyances  were  excluded.      Hence  it 


1  Horwitz  v.  Ellinger,   31  Md.  504;  Means  v.  Dowd,  128  U.  S.  278,  281, 

Pike  v.  Bacon,  21  Me.  280;  Covanho-     9  S.  C.  Rep.  65.    Compare  Buntlej  v. 
van  v.  Hart,  21  Pa.  St.  500.  Kingman,  152  U.  S.  535,  II  S.  C.  Rep. 

-  22  Wall.  523.  G88. 

4  73  Mo.  151. 


28  NO    DEFINITION    OF   FRAUD.  §13 

was  held  that  a  charge  to  a  jury  to  the  effect  that  the 
defendant  had  fraudulently  disposed  of  his  property  was 
not  supported  by  proof  that  he  had  executed  a  fraudulent 
mortgage. 

§  13.  No  definition  of  fraud.—  Fraud  is  as  difficult  to  de- 
fine '  as  it  is  easy  to  perceive.  Courts  of  equity  have  skil- 
fully avoided  giving  a  precise  and  satisfactory  definition 
of  it,2  so  various  is  it  in  its  form  and  color.3  It  is  some- 
times said  to  consist  of  "  any  kind  of  artifice  employed 
by  one  person  to  deceive  another,"  conduct  that  operates 
prejudicially  on  the  rights  of  others,41  or  withdraws  the 
property  of  a  debtor  from  the  reach  of  creditors.5  But 
the  term  is  one  that  admits  of  no  positive  definition,  and 
cannot  be  controlled  in  its  application  by  fixed  and  rigid 
rules.  Fraud  is  "  so  subtle  in  its  nature,  and  so  protean 
in  its  disguises,  as  to  render  it  almost  impossible  to  give 
a  definition  which  fraud  would  not  find  means  to  evade."  6 
It  is  to  be  inferred  or  not,  according  to  the  special  circum- 
stances of  every  case.  Whenever  it  occurs  it  usually 
vitiates  the  transaction  tainted  by  it.7     "Fraud  cuts  down 


1  See  Green  v.  Nixon,  23  Beav.  530;  Tenner  v.  Dickey,  1  Flippin,  36. 
Reyni'll  v.  Sprye,  1  De  G.,  M.  &  G.  Undue  influence. —  So  what  consti- 
691.  Fraud  may  be  passive  as  well  as  tutes  undue  influence  is  a  question  de- 
active.  Holt  v.  Creamer,  34  N.  J.  Eq.  pending  vipon  the  circumstances  of 
189.  each  particular  case.  It  is  a  species  of 
See  Beach  on  Contributory  Neg.,  constructive  fraud  which  the  courts 
§2.  Compare  Chesterfield  v.  Janssen,  will  not  undertake  to  define  by  any 
1  Atk.  852;  Shoemaker  v.  Cake,  83  fixed  principles,  lest  the  very  defini- 
Va.  5,  1  S.  E.  Rep.  387.  tion  itself  f urn  i  si  1  a  finger-board  point- 
Williams  v.  Harris,  4  So.  Dak.  26,  ing  out  the  path  by  which  it  may  be 
■">1  N.  \V.  Rep,  926.  evaded.     The  following  principle,  we 

4  Bunnv.  Ahl,  29  I'a.  St.  390.  think,    is    sound,    both    in    law    and 

McKibbin  v.  Martin,  64  Pa.  St.  356.  morals,  and  though  a  departure  from 

'  Shoemaker  v.  Cake,  83  Va.  5,  1  S.  the  former  rule,  is  sustained  by  the 

E.  Rep.  887.     En  Jewell  v.  Knight,  123  more  modern  authorities.    When  one 

U.  S.  482,  the  court  saj  " The  question  living  in  illicit  sexual  relations  with 

<-f  fraud  or  no  fraud  is  one  necessarily  another,    makes  a  large  gift  of  bis 

compounded  of  fact  and  of  law."  property  to  the  latter,  especially  in 


§  13  NO    l'l.l  INN  [(  '\    I  U    FRA1   D.  29 

everything."  "  Fraud,"  said  De  Grey,  C.  J.,  "  is  an 
extrinsic,  collateral  act,  which  vitiates  the  most  solemn 
proceedings  of  courts  of  justice.  Lord  Coke  says  it 
avoids  all  judicial  acts,  ecclesiastical  or  temporal."  '  It 
is  the  judgment  of  law  on  facts  and  intents.-'  Its  exist- 
ence is  often  a  presumption  of  law  from  admitted  or 
established  facts,  irrespective  of  motive,  and  too  strong 
to  be  rebutted.8  "Fraud,"  said  Story,  J.,  "will  vitiate 
any,  even  the  most  solemn  transactions;  and  an  asserted 
title  to  property,  founded  upon  it,  is  utterly  void." 4 
11  Fraud  is  always  a  question  of  fact  with  reference  to  the 
intention  of  the  grantor.  Where  there  is  no  fraud  there 
is  no  infirmity  in  the  deed.  Every  case  depends  upon 
its  circumstances,  and  is  to  be  carefully  scrutinized.  But 
the  vital  question  is  always  the  good  faith  of  the  trans- 
action. There  is  no  other  test."5  Fraud  does  not  con- 
sist in  mere  intention,  but  in  intention  carried  out  by 
hurtful  acts.6  "  Fraud  or  no  fraud  is  generally  a  question 
of  fact  to  be  determined  bv  all  the  circumstances  of  the 


cases  where  the  donor  excludes  the  '  2  Pettibone  v.  Stevens,  15  Conn.  26  ; 

natural    objects   of    his  bounty,   the  Sturtevant  v.  Ballard,  9  Johns.  (N.Y.) 

transaction  will  be  viewed  with  such  342;   Otley  v.    Manning,    9   East,  64; 

suspicion  by  a  court  of  equity  as  to  Morgan  v.  Elam,  4  Yerg.  (Tenn.  I  V->  ; 

cast  on  the  donee  the  burden  of  prov-  Worseley  v.  Demattos,  1  Burr.  467. 

ing  that  the  donation  was  the  result  of  3  Belford   v.    Crane,    16   N.   J.    Eq. 

free   volition,   and  was  not  superin-  265. 

duced  by  fraud  or  undue  influence.  *  United     States    v.     Amistad,     15 

See  Shipman  v.  Furniss,  69  Ala.  555,  Peters,  594. 

and  cases  cited,  44  Am.  Rep.  528,  and  5Per  Swayne,  J.,  Lloyd   v.   Fulton, 

note  ;  Leighton  v.  Orr,  44  Iowa,  679  ;  91  U.  S.  485. 

Dean  v.  Negley,  41  Pa.  St.  312.  Williams  v.   Davis,  69  Pa.  St.  28  ; 

'Rex   v.    Duchess  of  Kingston,  20  see  Reilly  v.  Barr,  34  W.  \a.  95, 11  S.  E. 

How.  St.  Tr.  544,  2  Smith's  L.  C.  687.  Rep.  750.     The  fraud  against  which  a 

See  Brownsword  v.  Edwards,  2  Ves.  bankruptcy  discharge  is  not  a  defense 

Sen.  246  :  Meddowcroft  v.  Huguenin,  is  "positive  fraud,  or  fraud    in    fact 

4  Moo.  P.  C.  386;  Perry  v.  Meddow-  involving  moral  turpitude  or    inten- 

croft,    10    Beav.    122:     Harrison    v.  tional  wrong,  as  does  embezzlement, 

Mayor   etc,  of  Southampton,  4  De  G.,  and  not   implied   fraud   or   fraud   in 

M.  &  G.  137;  Gill  v.  Carter,  6  J.  J.  law."     Ames  v.  Moir,  138  Q.  S.  311  : 

Marsh  (Ky.)  484;  Hal^v.  Hall,  1  Gill  Noble  v.  Eammond,  129  D".  S.  69. 
(Md.)  391  ;  WilsoD  v.  Watts,  9  Md.  356. 


30  NO   DEFINITION   OF  FRAUD.  £  13 

case."1  Direct  proof  of  positive  fraud  in  the  various 
kinds  of  covinous  alienations  which  we  are  to  discuss,  is 
not,  as  we  shall  presently  see,  generally  attainable,  nor 
is  it  vitally  essential.  The  fraudulent  conspirators  will 
not  be  prompted  to  proclaim  their  unlawful  intentions 
from  the  housetops,  or  to  summon  disinterested  parties 
as  witnesses  to  their  nefarious  schemes.  The  transac- 
tion, like  a  crime,  is  generally  consummated  under  cover 
of  darkness,  with  the  safeguards  of  secrecy  thrown  about 
it.  Hence  it  must  be  scrutinized  and  judged  by  all  the 
surrounding  circumstances  of  the  case.  The  evidence  is 
"almost  always  circumstantial.  Nevertheless,  though 
circumstantial,  it  produces  conviction  in  the  mind  often 
of  more  force  than  direct  testimony."-  In  such  cases, 
where  fraud  is  in  issue,  "  the  field  of  circumstances  ought 
to  be  very  wide."3  From  the  very  nature  of  the  case  it 
can  rarely  ever  be  proved  otherwise  than  by  circumstan- 
tial evidence.4  And  if  the  facts  and  circumstances  sur- 
rounding the  case,  and  distinctly  proven,  are  such  as 
would  lead  a  reasonable  man  to  the  conclusion  that  fraud 
in  fact  existed,  this  is  all  the  proof  which  the  law  re- 
quires.5 It  may  be  observed  that  there  can  be  no  fraud 
unless  there  exist  claims  and  rights  which  can  be  delayed 
and  hindered,  and  which,  but  for  the  fraudulent  convey- 
ance, could  be  asserted.  The  law  takes  no  cognizance  of 
fraudulent  practices  that  injure  no  one.  Fraud  without 
injury  will  not  furnish  a   cause    of  action.      Unless   these 


1  Per  Hunt.  J.,  Humes   v.  Scruggs,  Dec.  (N.Y.)535;  Tumlinv.  Crawford, 

94  U.  s.  22  28.     Bee  McKibbin  v.  -Mar-  Gl  Ga.  128  ;  Engraham  v.  Pate,  51  Ga. 

tin.  64  Pa.  st.  356  ;  Knowlton  v. Mish,  587. 

8  Sawyer,  627.  3  Engraham  v.  Pate,  51  Ga.  537. 

See  Kempner  v.  Churchill,  8  Wall.  4  See  Jewell  v.   Knight,  123  U.  S. 

Newman   v.   Cordell,  48  Barb.  426,  8  S.  C.  Rep.  193. 

(N.  Y.)  156;  Babcockv.  Eckler,24  N.  B  Lockhard  v.   Beckley,  10  W.  7a. 

Harnett  \.  Dundass,  I  Pa.  St.  87:  White  v.  Perry,  14  W.  Va.  86. 
181  .  Warner  v.  Blakeman,  I  A.bb.  A.pp. 


§14  RESTRAINTS    UPON    ALIENATION.  J! 

elements  co-exist,  the  courts  are  powerless  to  render  any 
relief.1 

§14.  Restraints  upon  alienation.— A  conveyance  as  re- 
gards real  property  may  be  defined  to  be  "  the  transfer  of 
the  title  of  land  from  one  person,  or  class  of  persons,  to 
another,"2  or  as  "a  deed  which  passes  and  conveys  land 
from  one  man  to  another." 3  The  usual  incident  of  property 
of  every  kind  owned  or  possessed  by  persons  sui  juris  is 
the  power  of  alienation  ;  generally  speaking,  every  man 
may  in  theory  of  law  do  what  he  pleases  with  that  which 
is  his  own.4  Almost  the  sole  remaining  restraint  upon  the 
power  of  alienation  of  land  is  that  which  adjudges  void 
conveyances  of  real  property  held  adversely  by  a  third 
party  at  the  date  of  the  conveyance.  Statutes  adjudging 
such  conveyances  void  "  were  originally  introduced  partly 
upon  the  theory  that  it  would  be  dangerous  to  permit  the 
transfer  of  disputed  or  '  fighting'  titles,  lest  powerful  and 
influential  persons  might  purchase  and  use  such  titles  as 
a  means  of  oppressing  poor  people."5    But  these  statutes 


•Fellows    v.    Lewis,   65    Ala.    354;  Miles,  23  Wis.  164;  Murphy  v.  Crouch, 

Castle  v.  Palmer,  6  Allen  (Mass.)  401;  24  Wis.  365;    Succession   of  Cotting- 

Legro  v.  Lord,  10  Me.  161;    Foster  v.  ham,  29  La.  Ann.  669.    Compare  Getz- 

McGregor,    11   Vt.    595;    Danforth  v.  ler  v.  Saroni,  18  111.  511;    Currier    v. 

Beattie,  43  Vt.  138;  Crummen  v.  Ben-  Sutherland,  54  N.  H.  475;  Huey's  \\>- 

net,  68  N.  C.  494:    Sears  v.  Hanks,  14  peal,  29  Pa.  St.  219.     See  §£  46-48. 

Ohio  St.  298;  Vaughan  v.  Thompson,  2  Klein  v.  McNamara,  54  Miss.  105. 

17 111.  78  ;  Muller  v.  Inderreiden,  79  111.  3 Brown    v.    Fit/..     13    X.     II.    285. 

382;  Anthony  v.  Wade,  1  Bush.  (Ky.)  "There  is  no  magical  meaning  in  the 

110;  Morton  v.  Ragan,  5  Bush.  (Ky.)  word  'conveyance;'  it  denotes  an  in- 

334;  Lishy  v.  Perry,  6  Bush.  (Ky.)  515;  strument  which  carries  from  one  per- 

Kuevan  v.  Specker,  11  Bush  (Ky.)  1;  son  to  another  an  interest  in   land." 

Vogler   v.   Montgomery,    54  Mo.  577;  Lord   Cairns,    L.    ('.,    in    Credlandjv. 

Smith  v.  Rumsey,  33  Mich.  183;  Hugu-  Potter.  L.  R.  10  Ch.  App.  12. 

nin  v.  Dewey,  20  Iowa,  368;  Edmonson  4  See  §  52. 

v.   Meacham,  50    Miss.   34;    Wood  v.  5  Sedgwick  &  Wait  on  Trial  of  Title 

Chambers,  20  Tex.  247;  McFarland  v.  to  Land  (2d  ed.),  §  190.     See  Sedgwick 

Goodman,  6  Biss.  Ill;  Cox  v.  Wilder,  v.    Stanton,    11    X.  Y.  295;    Urary    v. 

2  Dill.  45;  .Smith  v.  Kehr,  2  Dill.  50;  Goodman,  22  X.  Y.  L77;     McMahan  v. 

Dreutzer  v.  Bell,  11  Wis.  114;  Pike  v.  Bowe,    114]  Mass.    145;     Humbert;  v. 


32  RESTRAINTS    UPON    ALIENATION.  §  14 

are  being  rapidly  abolished,  circumvented,  or  ignored  as 
impracticable  and  unnecessary  in  this  country,  and  even 
this  restraint  upon  alienation  will  soon  be  wholly  super- 
seded.1 The  restriction  which  we  are  about  to  consider 
upon  a  debtor's  power  of  effectual  alienation  of  property 
at  the  expense  of  his  creditor  is  one  that  has  existed 
from  time  immemorial,  and  which  will  not  outlive  its  use- 
fulness so  long  as  people  are  dishonest  or  inclined  to  be 
generous  before  they  are  just.  The  claims  of  creditors, 
it  may  be  observed,  rest  upon  legal  obligations  higher 
than  the  demands  of  affection  or  generosity,  commendable 
as  a  response  to  these  may  be  when  no  duties  which  the 
law  declares  paramount  intervene.2  Creditors,  as  we  have 
said,  have  an  equitable  interest  for  the  payment  of  their 
claims  in  their  debtor's  property,  or  in  "  the  means  he  has 
of  satisfying  their  demands,"3  and  there  is  in  our  juris- 
prudence a  clear  restraint  upon  the  debtor's  right  of 
alienation,  where  it  is  attempted  to  be  exercised  for  the 
purpose  of  hindering,  delaying,  or  defrauding  his  creditors, 
or  defeating  their  lawful  right  to  subject  his  property  by 
legal  process  to  the  satisfaction  of  their  lawful  demands. 
The  cardinal  principle  running  through  all  such  cases  is, 
that  the  property  of  the  debtor  shall  not  be  diverted  from 
the  payment  of  his  debts,  to  the  injury  of  his  creditors  by 
means  of  the  fraud.4  The  law  does  not  restrain  a  man's 
dominion  over  his  own  property  so  long  as  he  acts  with 


Trinity   Church,    24   Wend.     (N.    V.)  W.    Rep.   732,    the    court    say:  "  But 

611;  Blatter  of  Department  of  Parks,  when  a  debtor  lias  incurred  debts  on 

7:;   N.  Y.  560;    Dawley    v.  Brown,  7!)  the  strength  of  his  being  the  owner 

N.  Y.  390;    Williams    v.    Rawlins,    33  of  certain  property,  his  creditors  have 

Ga.  117.  an  equitable  claim  thereon,  and  may 

[bid.  insist  that  lie  use  ins  property  honestly 

Potter  v.    Gracie,  58  Ala.  303;  and  fairly,  ami  without  any  intention 

Sherman  v.  Barrett,  1   McMull.  (8.  C.)  of  hindering  and  delaying  them  in  the 

Law  117.  collection  of  their  claims." 

•Seymour  \.  Wilson,  L9  N.  Y.  418;  «Clements   v.     Moore,  (i  Wall.  812- 

In  Beels  \.  Plynn,  28  Neb.  580,  H  N.  TlM.nii.kin>  v.  Sprout,  55  CaL  36. 


§14  RESTRAINTS    UPON     ALIENATION.  33 

fairness  and  good  faith;  but  it  avoids  all  fraudulent 
alienations  devised  to  secure  property  from  the  pursuit  of 
his  creditors  ;  it  is  fraudulent  to  defeat  them  by  a  reserva- 
tion of  benefit  to  himself;  it  is  equally  fraudulent  to  de- 
feat them  by  benefactions  conferred  upon  others.1 

"  The  current  of  law,"  says  Professor  Gray,2  "  has  for 
centuries  been  in  favor  of  the  removal  of  old  restraints  on 
alienation  ;  in  favor  of  the  disallowance  of  new  ones  ;  and 
especially  in  favor  of  compelling  a  debtor  to  apply  to  his 
debts  all  property  which  he  could  use  for  himself  or  give 
at  his  pleasure  to  others.  The  legislatures  and  the  courts 
have  co-operated  to  this  end.  Family  and  ecclesiastical 
pride,  natural  dishonesty,  and  narrow  precedents  have 
been  formidable  obstacles  to  this  movement,  but  its  general 
success  has  been  unmistakable."  The  debtor  must  devote 
all  his  property  absolutely  to  the  payment  of  his  debts  ; 
reserve  no  control  for  himself;5  provide  for  no  benefit 
to  himself,4  other  than  what  may  result  from  the  payment 
of  his  debts  ;  impose  no  condition  upon  the  right  of  the 
creditors  to  participate  in  the  fund  ;  authorize  no  delay 
on  the  part  of  the  trustee.5  A  debtor  may  be  said  to  sus- 
tain two  distinct  relations  to  his  property  :  that  of  owner 
and  quasi  trustee  for  his  creditors.  As  owner  he  may 
contract  debts  to  be  satisfied  out  of  his  property,  create 
liens  upon  it,  and  sell  or  give  it  to  others  at  pleasure,  and, 
as  we  shall  presently  see,  so  far  as  he  is  personally  con- 
cerned, he  will  be  bound  by  his  own  acts.  The  law,  how- 
ever, lays  upon  him  an  obligation  to  pay  his  debts,  and  in 


•Lockhard  v.  Beckley,  10  W.  Va.  436;  Fisher  v.  Henderson,  8  N.  B.  K 

96;  Hunters  v.  Waite,  3  Gratt.  (Va.) 26.  175;  .Means  v.  Dowd,  128  O.  S.  381,  9 

2  Restraints   on   the   Alienation     of  S.  C.  Rep.  65. 

Property,    by    John   Chipman   Gray,  *See    Lukins  v.   Ainl,  6  Wall.  79; 

Esq.,  Story  Professor  of  Law  in  Har-  Wooten  v.  (lark.  28  Miss.  75;   Arthur 

Sard  University.  v.   Com.   &   R.    Bank,   IT   Mi-s.  :;'.il  ; 

3  West  v.  Snodgrass,    17   Ala,  554;  Towle  v.  Hoit,  11  N.  H.  61. 

Riggs  v.  Murray,  2  Johns.  Ch.  (N.  Y.)         501iver    I <&  Co.'a   Bank  v.   Tal- 

565;    Donovan   v.    Dunning,    69  Mo.  cott,  19  N.  V.  148. 


J4  FRAUDULENT  CONVEYANCES.  §  IS 

behalf  of  his  creditors  holds  him  to  the  exercise  of  good 
faith  in  all  transactions  relating  to  the  fund  upon  which 
they  necessarily  depend  for  payment.  The  debtor,  there- 
fore, cannot  be  permitted  to  create  fictitious  debts,  or  to 
do  any  of  the  acts  specified  mala  fide  to  the  prejudice  of 
his  creditors. 

^  15.  Fraudulent  conveyances  —  Characteristics  and 
classes. —  A  fraudulent  conveyance  may  be  defined  to  be 
a  conveyance  the  object,  tendency,  or  effect  of  which  is 
to  defraud  another,  or  the  intent  of  which  is  to  avoid  some 
duty  or  debt  due  by  or  incumbent  upon  the  party  making 
it.1  As  was  said  by  Lord  Mansfield  in  Cadogan  v.  Ken- 
nett:2  "The  question  in  every  case  is,  whether  the  act 
done  is  a  bona  fide  transaction,  or  whether  it  is  a  trick  and 
contrivance  to  defeat  creditors."  The  same  test  has  been 
referred  to  as  decisive  by  Mr.  Justice  Story3  and  Chief- 
Justice  Marshall.4  As  we  shall  presently  see,  to  consti- 
tute such  a  disposition  of  property,  three  elements  must 
concur  —  first,  the  thing  disposed  of  must  be  of  value,  out 
of  which  the  creditor  could  have  realized  all  or  a  portion 
of  his  claim  ;  second,  it  must  be  transferred  or  disposed  of 
by  the  debtor  ;  and  third,  this  must  be  done  with  intent  to 
defraud.5      Stated  in  another  form  :  in   order  to  bring  a 

Si  •  3  K<  Qt's  I  "in.  440  .  J  M.  402.  4  Unite!  States  v.  Hooe,  3  Cranch, 
"  One  of  the  suresl  fcesteof  a  fraudu-  73.  "The  test  as  to  whether  aeon- 
lent  conveyance  is  thai  it  reserves  to  veyance  is  fraudulent  or  void  as  to  a 
the  grantor  an  advantage  inconsistent  creditor  is,  dors  it  binder  him  in  en- 
witb  its  avowed  purpose,  or  an  un-  forcing •  liis  deht?  Does  it  deprive  him 
usual  indulgence."  Thompson  v.  of  aright  which  would  be  legally  ef- 
FniT.  57  Miss.  484;  see  Bent/,  v.  fective  if  the  conveyance  or  device 
EJockey,  69  Pa.  St.  ?i  ;  Edwards  had  no!  been  resorted  to?"  Wagner 
v.  Stinson,  59  Ga,  443;  Mitchell  v.  v.  Smith,  13  B.  J.  Lea  (Tenn.)  569. 
Stetson,  64  Ga.  143.  Such,  for  in-  Hoyl  v.  Godfrey,  88  N.  Y.  669. 
stance,  as  a  support.  Graves  v.  Bl<>n-  S<-<-  I'lornne  Sewing  Machine  Co.  v. 
dell,  70  Me.  194;  Benry  v.  Binman,  Zeigler,  58  \la.  224;  Blake  v.  Bois- 
25  Minn.  199;  Young  v.  Beermans,  joli,  51  Minn.  296,53  X.  W.  Rep.  637. 
66  N.  Y.  374.  See  Baldwin  v.  Rogers,  29  Minn.  544, 
»wp.  434.  11  N.  w.  Rep.  77.  See  §  23. 
I  (j,  Jur.  .'  353. 


§  15  FRAUDULENT   CONVEX  \\(  IS.  35 

case  within  the  terms  of  the  statute,  there  must  exist 
a  creditor  to  be  defrauded,  a  debtor  intending  to  defraud, 
and  a  conveyance  of  property  which  is  appropriable  by 
law  to  the  payment  of  the  debt  due.1  Usually,  to  avoid 
the  transaction  there  must  be  some  interest  in  the  prop- 
erty left  in  the  debtor  ;~  some  reservation  inconsistent 
with  a  true  sale  ;  or  some  hiding  or  cloaking  of  the 
surplus  so  as  to  cover  it  up  for  the  benefit  of  the 
debtor  or  his  family.3  Whether  a  conveyance  be 
fraudulent  or  not,  as  against  creditors,  depends  on 
whether  it  was  made  on  good  consideration  and 
bona  fide.  It  is  not  enough  that  it  be  on  good  con- 
sideration or  bona  fide;  it  must  be  both.  If  it  be 
defective  in  either  particular,  though  good  between  the 
parties  and  their  representatives,  it  is  voidable  as  to 
creditors.4  It  has  been  observed  that  to  avoid  a  fraud- 
ulent transfer  three  things  are  necessary  :  Fraud  on  the 
part  of  the  vendor ;  fraud  on  the  part  of  the  vendee  ;  and 
an  injury  to  the  party  complaining.5  This,  as  we  shall 
see,  is  too  general  a  statement,  for  in  certain  cases  of 
voluntary  alienations  proof  of  actual  participation  in  the 
fraud  by  the  vendee  is  not  essential  to  annul  the  trans- 
action. Again,  these  covinous  alienations  with  respect 
to  the  rights  of  the  creditors,  existing  and  subsequent, 
and  the  character  of  the  debtor's  interest,  are  divisible 
into  three  classes.  (1).  Where  a  debtor  conveys  a  title 
in  fraud  of  creditors.  (2).  Where  a  person  not  indebted 
alienates  property  with  the  intention  to  defraud  future 
creditors.      (3).  Where   the   property  is   paid  for  by  the 

1  O'Connor  v.  Ward,  60  Miss.  1036.      Monell,  19  Hun  (N.  Y.)362  :   Young  \ 

2  Means  v.    Dowd,  128  U.  S.   281,  9      Willis,  82  Va.  396. 

S.  C.  Rep.  65  :  Young  v.  Willis,  82  Va.  *  Randall    v.   Vx l,  30    N.  J.    Eq 

296  ; . McCormick  v.   Atkinson,  78  Va.  358;  1  Story's  Eq.  Jur.  :  353  .  Sayre  v. 

8;  Wray  v.  Davenport,  79  Va.  19.  Fredericks,    L6  X.  J.    Eq.  205;  Smith 

3  See  Hobbs  v.   Davis,   50  Ga.  214;  v.  Muirheid.  34  X.  J.  Eq.  6. 

Price  v.  Pitzer,  44  Md.  527;    Todd  v.  5Guidry  v.   Grivot,  2  Martin  X.  s. 

(La.)  13 


6  STATUTES    DECLARATORY    OF  THE   COMMON    LAW.         §  16 


debtor,  but  the  conveyance  is  taken  in  the  name  of  a 
third  part)'.  Dillon,  J.,  observed:  "Any  instrument  is 
fraudulent  which  is  a  mere  trick  or  sham  contrivance,  or 
which  originates  in  bad  motives  or  intentions,  that  is 
made  and  received  for  the  purpose  of  warding  off  other 
creditors."1  In  another  case  ~  this  language  may  be 
quoted  :  "  Whether  the  contract  be  oral  or  in  writing  ; 
whether  executed  by  the  parties  with  all  the  solemnities 
of  deeds  by  seal  and  acknowledgment ;  whether  in  form 
of  the  judgment  of  a  court,  stamped  with  judicial  sanc- 
tion, or  carried  out  by  the  device  of  a  corporation 
organized  with  all  the  forms  and  requirements  demanded 
by  the  statute  in  that  regard,  if  it  be  contaminated  with 
the  vice  of  fraud  the  law  declares  it  to  be  a  nullity. 
Deeds,  obligations,  contracts,  judgments,  and  even  cor- 
porate bodies  may  be  the  instruments  through  which 
parties  may  obtain  the  most  unrighteous  advantages. 
All  such  devices  and  instruments  have  been  resorted  to 
to  cover  up  fraud,  but  whenever  the  law  is  invoked  all 
such  instruments  are  declared  nullities  ;  they  are  a  perfect 
dead  letter ;  the  law  looks  upon  them  as  if  they  had  never 
been  executed.  They  can  never  be  justified  or  sanctified 
by  any  new  shape  or  cover,  by  forms  or  recitals,  by  cov- 
enants or  sanctions  which  the  ingenuity,  or  skill,  or 
genius  of  the  rogue  may  devise.-'  In  a  case  before  the 
Supreme  Court  of  Maine  it  is  said  that  "a  fraudulent 
transfer,  however  perfect  in  form,  is  void  "  as  to  creditors.3 

§  16.  Fraudulent  conveyances  at  common  law  —  Statutes 
declaratory.—  By  the  rules  of  the  common  law  all  convey- 
ances made  in  fraud  of  creditors  were  regarded  as  voida- 
ble  at   the   instance   and   suit   of    such   creditors.4      The 


Bughes  v.  Cory,  20  Iowa,  105.  'See    notes    t<>    Twyne's    Case    (8 

Booth  v.  Bunce,  38  N    Y".  156.  Rep.  80),  1   Smith's   Leading  Cases  1. 

'Skowhegan     Bank    v.   Cutler,  4!)     continued    from   186<j  to  1879,  in   18 

Me.  8  American    Law  Register  N.  S.  187; 


c?  1 6        STATUTES   DECLARATORY   OF   THE   COMMON    LAW. 


37 


famous  statutes  of  Elizabeth,  to  be  presently  considered, 
avoiding  fraudulent  conveyances,  were  merely  declaratory 
of  the  common  law  j1  the  same  result  would  have  been 
worked  out  without  the  aid  of  the  statutes.2  The  stat- 
utes were  not  necessary  to  this  result  ;:f  but  are  to  be  re- 
ceived when  such  transfers  are  brought  in  question  only 
as  a  true  and  accurate   declaration  of  the  common   law.' 


Cadogan  v.  Kennett,  2  Covvper,  432  ; 
Curtis  v.  Leavitt,  15  N.  Y.  124  ;  Cle- 
ments v.  Moore,  6  Wall.  299,  312  ;  Nel- 
lis  v.  Clark,  20  Wend.  (N.  Y.)  27; 
Black  man  v.  Wheaton,  13  Minn.  326  ; 
Stoddard  v.  Butler,  20  Wend.  (N.  Y.) 
516  ;  Clark  v.  Douglass,  62  Pa.  St  416  ; 
Brice  v.  Myers,  5  Ohio,  121  ;  Baker  v. 
Humphrey,  101  U.  S.  499;  Hamilton 
v.  Russel,  1  Cranch,  310.  In  Califor- 
nia a  sale  of  this  character  is  held  to 
be  absolutely  void.  Mason  v.  Vestal, 
88  Cal.  396,26Pac.  Rep.  213;  Tapscott 
v.  Lyon,  103  Cal.  310,  37  Pac.  Rep.  225. 

1  Clements  v.  Moore,  6  Wall.  312  ; 
Davis  v.  Turner,  4  Gratt.  (Va.)  429. 
See  §§  18-21. 

2  Cadogan   v.  Kennett,  2  Cowp.  432. 

3  Baker  v.  Humphrey.  101  U.  S. 
499  ;  Clements  v.  Moore.  6  Wall.  299. 

4  Clark  v.  Douglass,  62  Pa.  St.  416  ; 
Rickards  v.  Attorney  Genl.,  12  CI.  & 
F.  44.  See  Barton  v.  Vanheythuysen, 
11  Hare,  126-132  ;  Ryall  v.  Rolle,  1 
Atk.  178  ;  TJtterson  v.  Vernon,  3  T.  It. 
546.  In  Gardner  v.  Cole,  21  Iowa, 
209,  Dillon,  J.,  after  remarking  that 
the  statutes  13  Eliz.  and  27  Eliz.  had 
never  been  legislatively  re-enacted  in 
Iowa,  said  :  "  But  antedating  as  these 
statutes  do  the  settlement  of  this 
country,  and  being  mainly,  if  not 
wholly,  declaratory  of  the  common 
law,  which  sets  a  face  of  flint  againsl 
frauds  in  every  shape,  they  constitute 
the  basis  of  American  jurisprudence 
on  these  subjects,  and  are,  in  this 
State,  part  of  the  unwritten  law." 
In  McClellen  v.  Pyeatt,  32  U.  S.  App. 


104,  107,  Sanborn,  J., says  :  "On  Maj  2, 
1890,  then,  for  the  firsl  time  in  tin1 
Indian  Territory,  the  law  declares 
that  a  voluntary  conveyance  bj  a 
debtor  to  delay  or  defraud  his  credit- 
ors '  shall  be  void.'  In  the  absence 
of  such  a  statute  it  was  perfectly  com- 
petent for  an  insolvent  debtor  to  give 
his  property  to  his  wife  or  to  his  friend, 
and  thus  to  deprive  his  creditors  of  an 
opportunity  to  enforce  the  collection 
of  their  claims  from  any  of  his  prop 
erty  upon  which  they  had  fasti  ned  no 
liens.  The  debtor's  right  of  disposi 
tion  was  unrestricted  in  tins  respect, 
and  it  was  undoubtedly  the  frauds 
that  this  condition  of  the  law  per- 
mitted that  originally  induced  the 
enactment  of  the  statute  13  Elizabeth 
in  England,  and  the  adoption  of  the 
provisions  of  that  statute  in  the  vari- 
ous States  of  this  Nation."  Certainly 
this  statement  ignores  the  settled  doe- 
trine  that  the  statute  of  Elizabeth  is 
merely  declaratory  of  the  common 
law,  and  that  the  same  result  could 
have  been  worked  out  without  the 
enactment  of  this  famous  statute. 
Experience  has  shown  that  the  pro 
mulgation  by  statutory  enactment  of 
a  well  formulated  principle  of  the 
common  law  has  a  salutary  influence 
in  enforcing  an  observance  of  what 
was  theretofore  the  unwritten  law. 
Perhaps  it  may  he  argued  in  the  case 
just  quoted  that  the  common  law  did 
prevail  in  the  Indian  Territory,  but 
the  conclusion  of  the  COUrl  is  not 
founded  upon  that  theory. 


38  STATUTES    DECLARATORY    OF   THE   COMMON    LAW.         §  16 

Lord  Coke1  comments  on  the  word  "declare"  in  the 
statute  as  showing  that  this  was  the  case,  and  Lord 
Mansfield,  in  Cadogan  v.  Kennett,'-'  said  that  "  the  prin- 
ciple and  rules  of  the  common  law,  as  now  universally 
known  and  understood,  are  so  strong-  against  fraud  in 
every  shape,  that  the  common  law  would  have  attained 
every  end  proposed  by  the  statutes  13  Eliz.  c.  5  and  27 
Eliz.  c.  4."3  And  Chancellor  Kent  asserted  that  the 
"  statute  of  Elizabeth  "  was  "  only  in  affirmance  of  the 
principles  of  the  common  law."4  This  feature  of  our 
jurisprudence  is  of  the  highest  importance,  and  creditors 
are  justified  in  invoking  it  in  cases  where  it  is  sought  to 
defeat  their  claims  as  not  coming  exactly  within  the  pre- 
cise wording  of  the  statute  avoiding  a  particular  kind  of 
transfer.  The  flexible  principles  of  the  common  law  sup- 
plement and  support  the  technical  framework  of  the 
statute,  and  constitute  the  deep  and  broad  foundation 
upon  which  the  creditor's  rights  are  founded.  The  mere 
omission  of  a  provision  embracing  "goods,  chattels,  and 
things  in  action,"  from  a  section  of  the  statute  declaring 
void  conveyances  and  assignments  of  estates  or  interests 
in  land,  made  with  intent  to  hinder,  delay,  or  defraud 
creditors,  will  not  be  construed  to  be  a  repeal  of  the 
common-law  rule  which  renders  a  conveyance  of  goods 
and  chattels,  made  with  such  intent,  fraudulent  and  void 
as  to  creditors.5  In  Fox  v.  Hills,0  the  statute  concern- 
ing fraudulent  conveyances  was  construed  not  to  compre- 
hend claims  founded  on   tort,  but  it  appearing  that  a  vol- 


1  Co.  Litt.  76a,  290b;  Twyne's  Case,  equity  is  that  a  provision  lor  die  wife, 

3  Rep.  82b  (2  <  Soke,  219).  contrived  t<>  conceal  the  means  of  the 

■.*  Cowp.  434  husband  from  his  creditors  by  placing 

S.c   Clements   v.    Moore,   6  Wall,  the  ostensible  title  in  her,  though  not 

299  ,   Staiin  v.  Kelly,  ss  N.   V.  421.  within  the  statute  of  Iran. Is,  is  void  as 

*  Sands  v.  Cod  wise,  4  Johns.  (N.  Y.)  to  creditors,  by  the  unwritten  law." 

508     1  Am.  Dee.  313.  Bernheim  v.  Beer,  56  .Miss.  151. 

Blackman   v.  Wheaton,   13  .Minn.  6 1  Conn.  298. 
331.     "The  principle  of  the  courl  of 


§  l6        STATUTES    DECLARATORY    OF   THE   COMMON    LAW.  39 

untary  deed  had  been  given  to  avoid  such  a  claim,  the 
instrument  was  promptly  adjudged  void  at  common  law 
as  to  the  creditor.  In  Lillard  v.  McGee,1  which  was  a 
suit  to  set  aside  a  conveyance  at  the  instance  of  a  creditor 
whose  claim  was  a  judgment  for  damages  in  an  action  of 
slander,  the  court  said  :  "  Fraud  is  one  of  the  main  pillars 
of  the  jurisdiction  of  a  court  of  equity,  and  there  is  no 
question  of  its  competency,  prior  to  the  statute,  to  give 
relief  in  a  case  of  this  sort.  Now  as  the  statute  is  made 
in  affirmance,  not  in  derogation  of  the  common  law,  it 
cannot  have  the  effect  of  taking  from  a  court  of  equity  its 
jurisdiction  ;  for  it  is  a  settled  rule  that  an  affirmative 
statute  does  not  repeal  the  common  law." 

"The  common  law  of  England,"3  says  Roberts, 
"  abhors  every  species  of  covin  and  collusion  ;  but  being 
tender  of  presuming  fraud  from  circumstances,  statutes 
have  been  specially  framed  to  suit  the  exigencies  of  the 
times,3  which  are  as  fertile  in  the  artifices  of  concealment 
as  in  the  opportunities  of  deceit.  It  was  the  prevention 
and  not  the  punishment  of  fraud  in  which  the  common 
law  was  defective,  for  there  is  no  instrument  or  act  which 
is  not  liable  by  the  law  of  this  country  to  be  rendered 
absolutely  void  by  clear  and  explicit  evidence  of  fraud- 
ulent intention.  So  general,  indeed,  is  the  condemnation 
of  all  fraudulent  acts  by  the  law  of  England,  that  a 
fraudulent  estate  is  said,  in  the  masculine  language  of 
the  books,  to  be  no  estate  in  the  judgment  of  the  law," 

These  words  are  employed  in  Alabama:  "The  right 
of  the  creditor  to  subject  property  of  his  debtor,  fraud- 
ulently conveyed,  is  founded  in  that  principle  of  the 
common  law  which  enjoins  integrity  as  a  virtue  para- 
mount to  generosity."  4 

1  4  Bibb  (Ky.)  1G6  temporibus sunt  inhonesta,  Cic.  de <  >il\ 

2  Roberts   on    Fraudulent    Convey-      lib.  3. 

ances  (ed.  1807),  p.  120.  'Planters   &    Merchants'    Bank    v. 

3  Qute  natura  videnturhonestaesse,     Walker,  7  Ala.  946. 


40  COVINOUS   TRANSFERS    OF   CHOSES    IN    ACTION'.  §  17 

§  17.  Covinous  transfers  of  choses  in  action. —  By  the  law 
of  England,  before  the  American  Revolution,  as  estab- 
lished by  decisions  of  Fortescue,  M.  R.,  Lord  Hardwicke, 
and  Lord  Northington,  fraudulent  conveyances  of  choses 
in  action,  though  not  specified  in  the  statute,  were  void- 
able equally  with  transfers  of  tangible  assets,  but  from 
the  nature  of  the  subject-matter  the  remedy  of  the  credit- 
ors must  be  sought  in  equity.1 

Gray,  C.  J.,  in  the  opinion  in  Drake  v.  Rice,~  says: 
"Of  the  only  case  before  our  Revolution  cited  in  the 
learned  argument  for  the  claimant,  we  have  but  this  brief 
note  :  '  A  man,  being  much  in  debt,  six  hours  before  his 
decease  gives  ^600  for  the  benefit  of  his  younger  children  ; 
this  is  not  fraudulent  as  against  creditors ;  though  it 
would  have  been  so  of  a  real  estate,  or  chattel  real.'3 
The  report,  having  been  published  in  1740,  cannot  have 
been  unknown  to  the  eminent  English  judges  who  made 
the  decisions  already  cited  ;  and,  as  observed  by  Lord 
Redesdale,  the  book  is  anonymous  and  of  not  much 
authority.4  The  opinions  of  the  English  and  Irish 
courts  of  chancery  since  our  Revolution,  cited  for  the 
claimant,  cannot  outweigh  the  cases  above  referred  to,  as 
evidence  of  the  law  of  England  at  the  time  of  the  sepa 
ration  of  the  colonies  from  the  mother  country.  In  the 
case  at  bar,  it  is  agreed  that  the  law  of  New  York 
respecting  fraudulent  conveyances  is  the  same  as  the 
common  law  and  the  law  of  Massachusetts  ;  and  that  by 
the   law  of    New  York   choses    in    action,    although    they 


■Drake    v.    Rice,    130    Mass.    410;  18  N.  H.  109 ;  Sargent  v.  Salmond,  27 

Taylor  v.  Jones,  2  Atk.600;  King  v.  Me.  539.    See  §  33,  and  cases  cited. 

Dupine,  2    \\k.   608,    note:    Horn   v.  *  130  Mass.  U3. 

Horn,  Ajnbler,  79;  Etyall  \.  Rolle,  1  Duffin    v.    Furness.  Sel.  ("as.  Ch. 

AiL.   166,  1    Ves.  Sen.  348;  Partridge  216. 

\.   Qopp,   1     Eden,    163,    Aml.l.   596;  » Barstow  v.  Kilvington,  5  Ves.  593, 

i          Hoffman,    1    Johns.   Ch.  598;  Hovenden  v.   Lord  A.nnesley,  2 

(N.   Y      150;    Hadden   v.   Spader,  20  Sch.  &  Lef .  607,  634. 
Jol,,,-,  (N.  Y.i.Vil :  Abbotl  v.  Tenney, 


§  18  i  .Alii  \    STAT1    i  i:s.  1 1 

cannot  be  attached  or  levied  upon,  yet  may,  after  exe<  u- 
tion  issued  on  a  judgment  at  law,  be  reached  by  proceed- 
ings before  a  magistrate  in  the  nature  of  proceedings 
under  the  poor  debtor  acts  of  this  commonwealth,  and  by 
the  appointment  of  a  receiver  to  take  and  dispose  of  the 
debtor's  property."1 

§  18.  Early  statutes  avoiding  fraudulent  conveyances.  — 
The  widely  known  statute,  13  Eliz.  c.  5  (1570),  perpetu- 
ated by  29  Eliz.  c.  5  (1587),  was  not,  by  any  means,  as 
many  suppose,  the  first  legislative  attempt  to  formulate 
and  declare  the  principles  of  the  common  law  on  this  sub- 
ject, or  to  repress  covinous  transfers  by  statutory  enact- 
ment. By  3  Hen.  VII.  c.  4  (1487),  "all  deeds  of  gift  of 
goods  and  chattels  made  or  to  be  made  of  trust  to  the  use 
of  the  person  or  persons  that  made  the  same  deed  of 
gift,"  are  declared  "void  and  of  none  effect."  And  the 
prior  act  of  50  Edw.  III.  c.  6  (1376),  reads  as  follows  : 
"  Divers  people  ....  do  give  their  tenements  and 
chattels  to  their  friends,  by  collusion  to  have  the  profits 
at  their  will,  and  after  do  flee  to  the  franchise  of  West- 
minster, of  St.  Martin-le-Grand  of  London,  or  other  such 
privileged  places,  and  there  do  live  a  great  time  with  an 
high  countenance  of  another  man's  goods  and  profits  of 
the  said  tenements  and  chattels,  till  the  said  cred- 
itors shall  be  bound  to  take  a  small  parcel  of  their 
debt,  and  release  the  remnant,  it  is  ordained  and 
assented,  that  if  it  be  found  that  such  gifts  be  so 
made  by  collusion,  that  the  said  creditors  shall  have  exe- 
cution of  the  said  tenements  and  chattels  as  if  no  such 
gift  had  been  made."  The  statute,  2  Rich.  II.,  stat.  2, 
c.  3  (1379),  contained  provisions  on  the  same  subject,  and 
from  its  recitals  was  evidently  framed  to  repress  the  hypo- 


]See  Donovan  v.  Finn,  1  Hopkins'      especially    the   Learned    note  a<    page 
Ch.    <N.    Y.)   59,    14    Am.    Dec.    531,      542.     See  §  33. 


EARLY    STATUTES. 


§  18 


critical  religious  zeal  of  fraudulent  debtors,1  and  to  fur- 
nish a  method  of  substituted  service  of  process.2  The 
quaint  provisions  of  these  early  statutes  show  conclusively 
that  fraudulent  conveyances  are  not  entirely  the  offspring 
of  our  modern  civilization.  Fraud,  which  the  common 
law  so  greatly-abhorred,  was  so  much  practiced  by  debtors 
upon  creditors  in  early  times  as  to  attract  the  attention  of 
Parliament,  and  to  constitute  a  subject  of  frequent  legis- 
lation. "  These  statutes,"  said  Lord  Mansfield,  "  cannot 
receive  too  liberal  a  construction,  or  be  too  much  extended 
in  suppression  of  fraud."3  It  maybe  observed  in  explana- 
tion of  this  early  legislation  against  fraudulent  transfers 
that  these  statutes  were  enacted  to  more  clearly  formu- 
late the  common  law,  with  a  view  to  suppress  voluntary 
conveyances  and  secret  trusts  made  by  debtors  who  had 
escaped  arrest  for  debt,  or  avoided  service  of  process  by 
fleeing  to   sanctuaries  or  holy  ground.     The  number  of 


1  "  Item,  in  ease  of  debt,  where  the 
debtors  make  feigned  gifts  and  feoff- 
ments of  their  goods  and  lands  to 
their  friends  and  others,  and  after 
withdraw  themselves,  and  flee  into 
places  of  holy  church  privileged,  and 
there  hold  them  a  long  time,  and  take 
the  profit  of  their  said  lands  and  goods 
so  given  by  fraud  anil  collusion, 
whereby  their  creditors  have  been 
long  and  yel  Ik-  delayed  of  their  debts 
and  recovery,  wrongfully  and  against 
good   faith  and  reason  ;  it  is  ordained 

and  established, That  after  that  the  said 

creditors  have  thereof  broughl  their 
writs  of  debt,  and  thereupon  a  capias 

au  aided,  and  the  slierill'  shall  make 
bis  return  that  he  hath  not  taken  the 
-aid  persons  because  of  sneh  places 
privileged   in  which  they  lie  or  shall 

!»■    entered,    then       ....     another 

writ  shall  he  granted    ....    that 

proclamation    be    made   openly  at    the 

i  if  i  he  place  so  privileged,  where 
uch  persons  be  entered,  bj  five  weeks 


continually,  every  week  once,  that 
the  same  person  be  at  a  certain  day, 
.  .  .  .  before  the  King's  justices, 
and  ....  if  the  said  persons  called 
come  not  ....  judgment  shall  be 
given  against  them  upon  the  principal 

for  their  default Executions 

shall  be  made  of  their  goods  and  lands, 
being  out  of  the  place  privileged,  as 
well,  that  is  to  say,  of  those  lands  and 
goods  so  given  by  collusion,  as  of  any 
other  out  of  the  same  franchise,  after 
that  such  collusion  or  fraud  be  duly 
found  in  the  same  manner  as  that 
ought  to  have  been,  if  no  devise  bad 
been   thereof  made,   notwithstanding 

the  same  devise." 

2  By  a  Manx  statute  "  all  fraudu- 
lent assignments,  or  transfers  of  the 
debtor's  goods  or  effects,  shall  be  void, 
and  of  no  effect  against  bis  just  cred- 
itors." Mills'  Statute  Law  of  Isle  of 
.Manx,  p.  238.  Corlett  v.  Radcliffe,  1  1 
.Moo.  P.  C.  121-132. 

sCadogan  v.  Kennett,  Cowp.  434. 


§  19  STATUTE    [3    ELIZABETH.  43 

these  conveyances,  however,  was  comparatively  small,  and 
their  appearance  is  said  to  have  been  spasmodic  and  pre 
mature,  and  "  far  in  advance  of  the  time  for  their  normal 
natural  development."  Sanctuaries,  or  cities  of  refuge 
for  fraudulent  and  absconded  debtors,  do  not  seem  to 
have  been  wholly  abolished  until  during  the  reign  of 
James  I.,  and  one  such  sanctuary,  the  noted  White-friars 
which  flourished  in  the  reign  of  that  monarch,  has  been 
immortalized  by  Sir  Walter  Scott  in  his  "  Fortunes  of 
Nigel."  » 

§  19.  Statute  13  Eliz.  c.  5,  and  its  object. —  This  statute 
was  passed  for  the  protection  of  creditors,  and  is  the  great 
model  which  has  been  re-enacted  in  substance,  or  copied 
wherever  Anglican  law  prevails.  It  was,  in  its  perfected 
form,  an  offspring  of  the  brilliant  Elizabethan  age,  and 
adds  to  the  lustre  of  the  achievements  of  that  unsurpassed 
period  of  the  world's  development.  The  leading  object 
of  the  statute  was  to  prevent  those  collusive  transfers  of 
legal  ownership  which  place  the  property  of  a  man 
indebted  out  of  the  reach  of  his  bona  fide  creditors,  and 
leave  to  him  the  beneficial  enjoyment  of  that  which  ought 
in  conscience  to  be  open  to  their  legal  remedies.'  It  was 
meant  to  prevent  deeds  "  fraudulent  in  their  concoction," 
says  Lord  Ellenborough/'  By  its  provisions  all  convey- 
ances and  dispositions  of  property,  real  or  personal,  made 
with  the  intention  of  defrauding  creditors,  are  declared  to 
be  null  and  void  as  against  the  creditors.4  Mr.  Reeves 
says  that  several  acts  had  been  formerly  passed  on  the 
subject  of  fraudulent  conveyances,  "but  none  of  them  had 
gone   so   far"   as   the  statutes  13    Eliz.  and   27   Eliz.  "to 


1  Essay  by  John  Reynolds,  Esq.,  on         2  Roberts  on     Fraudulent   Convey- 
Fraudulent    Conveyances,   etc.,   read      ances,  p.  554. 

before  New  York  State  Bar  Associa-         :1  Meux  v.  Howell,  I    East,  1  I       See 
tion,  Nov.  18,  1879.  Moore  v.  Hinnant.  89  N.  C.  159. 

4  See  Drake  v.  Rice,  130  Mass.  410. 


44 


STA  fUTE    13    ELIZABETH. 


19 


restrain  these  feigned  gifts."  1  Mr.  Justice  Story  observes 
that  this  statute  (13  Eliz.)  "has  been  universally  adopted 
in  America  as  the  basis  of  our  jurisprudence  "  upon  the 
subject.2  It  maybe  found  enacted  almost  intact  in  many 
of  our  statute-books,  and  is  still  popularly  called  "  the 
statute  of  Elizabeth,"  just  as  statutory  remedies  for  the 
trial  of  title  to  real  property  are  known  by  the  familiar 
title  of  ejectment.  Professor  Pomeroy  says:3  "The 
operative  statute  in  England,  which  is  also  the  basis  of 
all  legislation  and  judicial  decision  in  the  United  States, 
is  the  celebrated  act  13  Eliz.  c.  5."  The  historic  name  of 
the  eccentric,  but  fortunate,  queen  is  constantly  linked 
with  the  struggles  of  creditors  to  enforce  the  payment  of 
honest  demands.  The  general  interpretation  placed  upon 
the  statute  of  Elizabeth  is  well  illustrated  in  an  import- 
ant case  in  Maine,4  in  which  the  court  say  :  "  We  derived 
our  law  in  relation  to  conveyances  fraudulent  as  to  credit- 
ors, from  the  stat.  13  Eliz.  c.  5,  which  has  been  adopted 
here  as  common  law.5  This  statute,  declaring  that  con- 
veyances  made  with  intent  to  '  delay,  hinder,  or  defraud 
creditors,'  shall  be  '  deemed  and  taken  (only  as  against 
creditors,  etc.)  to  be  clearly  and  utterly  void,  frustrate, 
and  of  none  effect,'  has  been  invariably  construed  as 
plainly  implying  that  they  are  valid  as  between  the  par- 


1  5  Reeves'  Bisk  Eng.  Law.  pp.  ^44, 
345. 

'-'  Story's  Eq.  Jur.  ?  353.  In  Peters 
v.  Bain,  133  D.  S.685,  108.  C.  Rep.  354, 
Chief  Justice  Fuller  says:  "The 
statute  of  Elizabeth,  <•.  •">.  againsl 
fraudulent  conveyances  has  been  uni- 
versally adopted  in  American  law  as 
the  basis  of  our  jurisprudence  on  thai 
subject  (Story  Eq.  Jur.  sj  353),  and 
re-enacted  in  terms,  or  nearly  so,  or 
with  some  change  of  language,  l>y 
the  legislatures  of  the  several  states.'" 


In  Clements  v.  Moore,  6  Wall.  312,  the 
court  say  :  "The  statute  of  the  13th 
Elizabeth  has  been  substantially  enac- 
ted in  Texas."  The  statutes  of  Eliza- 
beth for  the  prevention  of  fraudulent 
conveyances,  are  in  full  force  in  the 
1  hstrict  of  Columbia,  and  stood  with- 
out a  single  amendment  until  Feb. 
24,1893.  Kansas  City  PackingCo.  v. 
Hoover,  1  I).  C.  Ct.  Ap|).  270. 

8  2  Pom.  Eq.  §  968. 

'  Butler  \.  Moore,  7:5  Me.  154. 

j  Howe  v.  Ward,  1  Me.  196.  199. 


§  2° 


STATUTE    [3    1.1.1/ \  r,l    III. 


43 


ties  and  their  representatives;1  and  can  be  avoided  only 
by  creditors  on  due  proceedings ; ~  or  their  representa- 
tives, such  as  assignees  in  bankruptcy  or  insolvency  of 
the  grantor,3  and  the  executors  or  administrators  of  grant- 
ors since  deceased  whose  estates  have  been  declared 
insolvent.4  And  notwithstanding  the  words  '  utterly  void,' 
etc.,  applied  to  such  conveyances,  they  are  not,  even  as 
to  creditors,  void  but  voidable;5  and  all  the  courts  con- 
cur in  holding  that  if  the  fraudulent  grantee  convey  the 
premises  to  a  bona  fide  purchaser  for  a  valuable  considera- 
tion before  the  creditor  moves  to  impeach  the  original 
conveyance,  the  purchaser's  title  cannot  be  disturbed."0 

§20.  Its  interpretation  and  construction.— "  Notwithstand- 
ing," says  Mr.  Roberts,  u  these  laws  are  greatly  penal,  the 
rule  still  holds  of  p-ivino;  them  an  extended  and  liberal 
exposition."7  Statutes  in  suppression  of  deceit  and  covin 
should  be  equitably  expounded,  although  they  are  highly 
penal.8     In  McCulloch  v.  Hutchinson,9   Sergeant,  J.,  said  : 


1  Nichols  v.  Patten.  18  Me.  231  ;  An- 
drews v.  Marshall,  43  Me.  274  ;  Ben- 
jamin on  Sales,  3d  Am.  ed.,  p.  476, 
and  note. 

8  Miller  v.  Miller,  23  Me.  22;  Thorn p- 
son  v.  Moore.  36  Me.  47  ;  Stone  v. 
Locke,  46  Me.  445. 

3  Freeland  v.  Freeland,  102  Mass. 
475,  477. 

4  McLean  v.  Weeks,  65  Me.  411,  418. 

5  Andrews  v.  Marshall,  43  Me.  272. 

6  Neal  v.  Williams,  18  Me.  391  ; 
Hoffman  v.  Nohle.  6  Met,  (Mass  )  68  ; 
Bradley  v.  Ohear.  10  N.  H.  477. 

'•  Roberts  on  Fraudulent  Convey- 
ances, p.  542.  In  hits  enim  quaesunt 
favorabilia  animce,  quamvis  sunt 
damnosa  rebus, fiat  aliquando  extensio 
statuti.  In  Riggs  v.  Palmer,  115 
N.  Y.  511,  Karl,  J.,  says  :  "  All  laws, 
as  well  as  all  contracts,  may  be  con- 
trolled in  their  operation  and  effect 
by  general,  fundamental  maxims  of 


the  common  law.  No  one  shall  l»' 
permitted  to  profit  by  bis  own  fraud, 
or  to  take  ad  vantage  of  his  own  wrong, 
or  to  found  any  claim  upon  bis  own 
iniquity,  or  to  acquire  property  by  bis 
own  crime.  These  maxims  are  dic- 
tated by  public  policy,  have  their 
foundation  in  universal  law  adminis- 
tered in  all  civilized  countries,  and 
have  nowhere  been  superseded  by 
statutes.  They  were  applied  in  tin' 
decision  of  the  case  of  the  New  York 
Mutual  Life  Insurance  Company  v. 
Armstrong  (117  U.  S.  591).  There  it 
wa>  held  that  the  person  who  pro- 
cured a  policy  upon  the  life  of  another, 
payable  at  bis  death,  and  then  mur- 
dered the  assured  to  make  the  policy 
payable,  could  not  recover  thereon  " 

n  Wimbish  v.  Tailbois,  Plowd.  <  lorn, 
59.  Sec  Roy  v.  Bishop  of  Norwich, 
Hob.  75:  Brice  v.  Myers,  5  Ohio,  128, 

"7  Watts  (Pa.)  435. 


46 


STATUTE    13    ELIZABETH. 


§20 


"  The  statutes  on  this  subject  are  liberally  expounded  for 
the  protection  of  creditors,  and  to  meet  the  schemes  and 
devices  by  which  a  fair  exterior  may  be  given  to  that 
which  is  in  reality  collusive."  1  "  The  statute,"  says  Allen, 
[.,  "  has  always  had  a  liberal  interpretation  for  the  preven- 
tion of  frauds."2  The  law  "loves  honesty  and  fair  deal- 
ing," and  "  so  construes  liberally  statutes  to  suppress 
frauds,3  as  far  as  they  annul  the  fraudulent  transaction."4 
As  early  as  Twyne's  Case,5  it  was  resolved  that  "  because 
fraud  and  deceit  abound  in  these  days  more  than  in  former 

times all     statutes     made    against    fraud     should 

be  liberally  and  beneficially  expounded  to  suppress  the 


1  See  Cadogan  v.  Kennett,  2  Cowp. 
432  ;  Gooch's  Case,  5  Rep.  60  (3  Coke, 
121)  :  Allen  v.  Rundle,  50  Conn.  31. 

Young  v.  Heernians,  66  N.  Y.  383. 
See  Pennington  v.  Seal,  49  Miss.  525. 
An  innocent  construction  of  an  in- 
strument will  be  favored  in  prefer- 
ence to  one  that  will  impute  a  fraudu- 
lent intent.  Roberts  v.  Buckley,  145 
N.  Y.  21o-224,  39  N.  E.  Rep.  966. 

'Citing  Twyne's  Case,  3  Rep.  80b 
(2  Coke,  212);  Cadogan  v.  Kennett, 
2  Cowp.  432-434. 

4  Bishop  on  the  Written  Laws, 
§  192.  "Statutes  against  frauds  are 
to  be  liberally  and  beneficially  ex- 
pounded. This  may  seem  a  contra- 
diction to  the  last  ride  [that  penal 
statutes  are  to  be  construed  strictly] ; 
mosl  statutes  against  frauds  being  in 
their  consequences  penal.  But  this 
difference  is  here  to  be  taken  :  where 

the  statute  acts  upon  tl ffender  and 

inflicts  a  penalty,  as  a  pillory  or  a  fine, 
it  ie  then  to  be  taken  strictly  :  but 
when  the  statute  acts  upon  the  offense, 
by  setting  aside  the  fraudulent  trans 
action,  here  it  is  to  be  construed  lib- 
erally." 1  HI.  <om.  88.  See  Carey  v. 
<  tiles,  9  <  la.  253  ;  <  Summing  \  Fryer, 
Dudley  iCa.i  182  ;  Ellis  v.  Whitlock, 
10  Mo.  781.     In  Riggs  \.  Palmer,  115 


N.  Y.  510,  22  N.  E.  Rep.  188,  the  court 
say  :  "  Such  a  construction  ought  to 
be  put  upon  a  statute  as  will  best  an- 
swer the  intention  which  the  makers 
had  in  view,  for  qui  hceret  in  litera, 
turret  i»  corticc."  In  People  v.  Cren- 
nan,  141  N.  Y.  241,  this  language  is 
used,  "whatever  is  necessarily  im- 
plied in  a  statute  is  just  as  much  a 
part  thereof  as  if  written  therein." 
See  People  v.  Utica  Ins.  Co.,  15  Johns. 
(N.  Y.)  358.  In  construing  statutes, 
it  is  a  well  established  rule  that  resort 
must  be  had  to  the  natural  significa- 
tion of  the  words  employed,  and  if 
they  have  a  definite  meaning,  which 
involves  no  absurdity  or  contradic- 
tion, there  is  no  room  for  construction, 
and  courts  have  no  right  to  add  or 
take  away  from  that  meaning.  Tomp- 
kins v.  Hunter.  149  N.  Y.  122,  citing 
Newell  v.  People,  7  N.  Y.  9,  97:  Mc- 
Cluskey  v.  Cromwell,  11  N.  Y.  593, 
mil  ;  People  v.  Woodruff,  32N.Y.  355, 
364;  Matter  of  Miller.  110  N.  Y.  216. 
A  statute  will  be  held  to  abrogate  the 
common  law  only  in  so  far  as  the  clear 
import  of  the  language  absolutely  re- 
quires  it.  Fitzgerald  v.  Quann,  109 
X.  V.  441. 
5  3  Rep.  82a  (2  Coke,  219). 


§21  .  STATUTE  27  ELIZABETH.  47 

fraud."  It  may  be  suggested  that,  in  construing  statutes 
to  prevent  frauds,  suppress  public  wrongs,  or  effect  a  pub- 
lic good, —  objects  which  the  law  favors, —  there  is  a  pres- 
sure toward  a  liberal  interpretation  ;  but  if  they  also 
provide  a  penalty,  which  is  a  thing  odious  to  the  law, 
there  is  another  pressure  toward  the  strict  rule  ;  so  the 
balance  may  be  in  equipoise,  or  the  one  scale  or  the  other 
may  preponderate,  according  to  the  special  circumstances 
of  the  case,  or  the  views  of  the  particular  judge.1 

The  provisions  of  the  statute  are  considered  to  be  so 
plain  that  "he  that  runs  may  read."  3  In  Federal  tri- 
bunals, and  in  the  Supreme  Court  of  the  United  States, 
in  controversies  arising  under  this  statute,  involving  as 
they  do,  the  rights  of  creditors  locally,  and  a  rule  of 
property,  the  conclusions  of  the  highest  judicial  tribunal 
of  the  State  are  accepted  as  controlling.3 

§21.  Statute  27  Eliz  c.  4. —  This  statute  was  enacted  in 
favor  of  purchasers,  and  renders  void,  as  against  subse- 
quent purchasers  of  the  same  land,  all  conveyances,  etc., 
made  with  the  intention  of  defeating  them,4  or  contain- 
ing a  power  of  revocation.  Mr.  May  observes5  that  "  in 
one  respect,  however,  both  these  statutes  were  moulded 
in  strict  conformity  with  the  rules  of  the  common  law  ; 
for  if  'simplicity  was  the  striking  feature  of  the  common 


'Compare  Taylor  v.  United  States,  See   Savage    v.   Knight,  92    N.   < '. 

3  How.  197;    Fairbanks  v.  Antrim,  2  497. 

N.  H.   105;  Abbott  v.  Wood,  22  Me.  Peters  v.  Bain,  133  U.  S  686,  10  S. 

541;  Sickles  v.  Sharp,  13  Jobns.  (N.  C.  Rep. 354,  citing  Jaffraj  y.McGehee, 

Y.)497;  Van  Valkenburgh  v.  Torrey,  107  U.  S.  361,  364,  2  S.  < '.  Rep.  361  . 

7  Cow.  (N.  Y.)  252     In  construction  Lloyd   v.    Fulton,  91   U.  S.    179,    185; 

the  courts  will  strive  "to  make  atone-  Allen  v.  Massey,  17  Wall.  351 
nient  and  peace  among  the  words."         4See    Anderson    v.   Etter,   102    lud. 

It  may  be  recalled  that  an  assignment  120.     Compare  Cathcarl  v.  Robinson, 

is  to  be  construed  like  any  other  con-  5  Pet.  264;    Pence  v.  (roan.  51   End. 

tract.     Crook  v.  Rindskopf,  105  N.  Y.  336. 

476-485, 12  N.  E.  Eep.  174.  5  May  on  Fraudulent  Conveyances 

(London,  1871),  p.  3. 


48  I W  \  NE'S    CASE.  §  22 

law,' 1  it  was,  in  an  almost  equal  degree,  the  chief  feature 
of  the  statutes  of  Elizabeth,  which  are  couched  in  very 
general  terms,  so  as  to  include,  and  allow  their  applica- 
tion by  the  courts  to  any  fraudulent  contrivances  to 
which  the  fertility  of  man's  imagination  might  have 
resorted,  as  a  means  of  eluding  a  more  precise  and  inflex- 
ible law."  "' 

§  22.  Twyne's  Case.y  —  This  celebrated  case  is  the  credit- 
or's beacon-light  in  suits  to  annul  covinous  transfers. 
The  decision  was  promulgated  in  i6or,  thirty  years  after 
the  enactment  of  the-  statute  13  Eliz.  c.  5.  Brilliant 
statesmanship  and  diplomacy,  signal  success  in  battle 
against  threatened  foreign  invasion,  and  the  birth  of 
immortal  literary  and  dramatic  productions,  were  not  the 
only  characteristics  of  this  fascinating  period  in  English 
history.  Evidently  covinous  dispositions  of  property 
were  at  that  time  beginning  to  attract  attention  and  be- 
come troublesome,  for,  as  already  shown,  it  was  resolved 
that  "  because  fraud  and  deceit  abound  in  these  days 
more  than  in  former  times,  all  statutes  made  against 
fraud  should  be  liberally  and  beneficially  expounded  to 
suppress  the  fraud."      It  appeared,  in  this  case,  that  P.  was 


■Citing  Sugden  on  Powers,   Intro-  any  pretence,  color,  feigned  considera- 

duction,  p.  1.  tion,  expressing  of  use,  or  any  other 

•As  to  the  interpretation  of  these  matter  or  thing  to  the  contrary.  By 
statutes  as  applied  to  bona  fide  pur-  the  27  Eliz.  c.  4,  conveyances  made  to 
chasers,  Bee  Bean  v,  Smith,  2  Mason,  defraud  subsequent  purchasers  are 
272,  per  Story.'J.,  reviewing  Roberts  declared  void  as  to  persons  defrauded. 
v.  Anderson,  3  Johns.  ( !h.  (N.  Y.)  371,  In  both  Btatutes  a  penalty  is  provided 
per  Chancellor  Kent.  In  Mulford  v.  for,  which  parties  to  such  convey- 
Peterson,  35  N.  .1.  Law.  133,  the  court  ances,  or  such  as  are  privy  to  or  knpw- 
Baid :"  The  statute,  13  Eliz.  c.  5,  makes  ing  of  such  fraud,  incur,  who  shall 
utterly  void,  frustrate,  and  of  no  ef-  put  in  use  or  maintain,  justify,  or  de- 
fect, every  feoffment,  gift,  grant,  fend,  such  conveyances  as  made  bona 
alienation,  bargain,  and   conveyance  fide  or  upon  good  consideration." 

of  lands,  tenements,  g Is,  and  chat-  3  Rep.  80  (2  Coke,  212);  1  Smith's 

tela,  oranj  of  them,  devised  and  con-  Lea.  Cas.  1,  18  Am.  Law  Reg.  N.  8. 

trived   to  delay,   hinder,  or  defraud  137. 
creditors,  ae   against   such  creditors, 


§  22  I  W\  NE'S    I    \>i  .  49 

indebted  to  T.  in  ,£400,  and  was  indebted  also  to  C.  in 
,£200.  C.  brought  an  action  of  debt  against  P.,  and  pend- 
ing the  writ  P.,  being  possessed  of  goods  and  chattels  of 
the  value  of  ,£300,  secretly  made1  a  general  deed  of  gift 
of  all  his  goods  and  chattels,  real  and  personal  whatso- 
ever, to  T.,  in  satisfaction  of  his  debt;  notwithstanding 
which  P.  continued  in  possession  of  the  goods,  some  of 
which  he  sold  again,  sheared  the  sheep,  and  marked  them 
with  his  own  mark.  Afterwards  C.  had  judgment  against 
P.  and  took  out  a  fieri  facias  directed  to  the  sheriff  of 
Southampton,  who,  by  force  of  the  writ,  came  to  levy  upon 
the  goods.  Divers  persons,  by  the  command  of  T.,  resisted 
the  sheriff  by  force,  claiming  the  goods  as  the  goods  of  T. 
by  virtue  of  the  gift ;  and  whether  the  gift,  on  the  whole 
matter,  was  a  good  gift,  or  fraudulent  and  void  within  the 
13  Eliz.  c.  5,  was  the  question.  It  was  determined  by  the 
Lord  Keeper  of  the  Great  Seal,  by  the  Chief-Justices,  and 
by  the  whole  Court  of  Star  Chamber,  that  the  gift  was 
fraudulent  within  the  statute.  And  as  the  signs  and 
marks  of  fraud,  it  was  said  by  the  court :  (1).  That  the  gift 
was  general,  without  exception  of  the  donor's  apparel,  or  of 
anything  of  necessity.  (2).  The  donor  continued  in  posses- 
sion, and  used  the  goods  as  his  own  ;  and  by  means  thereof 
traded  with  others,  and  defrauded  and  deceived  them.  (3  ) 
It  was  made  in  secret.  (4).  It  was  made  pending  the  writ. 
(5).  There  was  a  trust  between  the  parties  ;  for  the  donor 
possessed  all,  and  used  them  as  his  proper  goods  ;  and  fraud 
is  always  apparelled  and  clad  with  a  trust,  and  a  trust  is  the 
cover  of  fraud.  (6).  The  deed  expressed  that  the  gift  was 
made  honestly,  truly  and  bona  fide ;  et  clausula-  inconsueta 
semper   inducunt  suspicioncm.'1      This   case   is    popularly 


1  See  Huntley  v.   Kingman,  152  U.  Rep.  237.  Lord  Eldon,  in  Kidd  v.  Raw- 

S.  533,  14  S.  C.  Rep.  688.  linson,  2  Bos.  <&  P.  59,  cited  with  ap- 

-  See  Roberts  on    Fraudulent  Con-  proval  from  Buller'8  Nisi  Prius,  w  here 

veyances  (ed.  1845),  pp.  544,  545  ;  Da-  the   following   synopsis    of    Twyne's 

vis  v.  Schwartz,  155  U.  S.  639,  15  S.  C.  Case  maj  be  found:     "A.,  being  in 

4 


5<d  twyne's  CASE.  §  22 

regarded  as  the  fountain  from  which  our  modern  law  as 
to  fraudulent  conveyances  (lows,  and  the  profession  fre- 
quently refer  to  and  draw  from  it  in  preference  to  select- 
ing from  the  "myriad  of  precedents"  and  "single 
instances  "  which  financial  crises  and  the  oreed  of  dishon- 
est  debtors  have  since  called  into  being.  The  leading 
doctrine  taught  by  this  case  has  been  practically  super- 
seded in  England,  but  it  still  holds  a  prominent  place  in 
our  jurisprudence.  This  may  be  likened  to  the  use  of 
statutory  real  writs  in  parts  of  the  United  States  after 
their  complete  abandonment  in  the  mother  country.1 
The  exact  point  decided  in  Twyne's  Case  is  that  a  con- 
veyance by  a  debtor  of  tangible  property,  if  actually 
fraudulent,  is  void  as  to  existing  creditors.  The  impres- 
sion that  the  principles  of  this  case  are  sufficient  to  meet 
the  exigencies  of  our  modern  jurisprudence  is  clearly 
erroneous.  Though  Twyne's  Case  has  been  characterized 
as  a  "  wonderful  decision,"  and  amazement  has  been 
expressed  that  the  question  involved  should  have  come 
up  for  adjudication  at  such  an  early  period,  yet  it  must 
be  conceded  that  the  facts  of  the  case  were  too 
restricted  to  enable  the  court  to  furnish  rules  suffi- 
cient to  answer  all  the  varying  imperative  demands  of 
creditors  at  the  present  day.  Since  this  great  deci- 
sion was  rendered  its  principles  have  been  extended,  as 
we  shall  presently  see,  to  avoid  covinous  conveyances  not 


debtedtoB,  hv£400,  andtoC.  in  £200,  within  the  proviso,  for  though  it   La 

C.  brings  debt,  and  hanging  the  writ,  made  on  a  good  consideration,  yd  it 

A.  makes  ;i  secrel  conveyance  of  all  is  not  bona  fide.     Bui  ye1   the  donoi 

his  goods  and  chattels  to  B.  in  satis-  continuing  in  possession,  is  not  in  all 

faction  of  Ids  debt,  bul  continues  in  cases  a  mark  of  fraud;  as  where  a 

possession,   and    sells   some,    and    sets  donee  lends  Ins  donor   money  to  buy 

his  mark  on  other  sheep;  and  it  was  goods,  and  at   the  same  time  takes  a 

hoi  den   to  !»■  fraudulent    within  tins  bill  of  sale  of  them  for  securing  the 

act;   (1)  because  the  gifl   is  general;  money."     Bull.  Nisi  Prius,  p.  258. 

-'    the  donor  continued  in  possession  'See    Sedg,    &    Wait    on   Trial    of 

and  used  them  as  his  own  ;  (3)  it  was  Title  to  Land,  2d  ed<,  £?  72-76,  c.  II. 
made  pending  t  he  wril ,  and  it  is  nol 


§  22  twyne's  case.  51 

only  as  to  existing  creditors,  but  in  certain  cases  as  to  sub- 
sequent creditors,1  and  even  as  to  contingent  subsequent 
creditors  ;2  so  it  has  been  held  to  embrace  creditors  who 
were  suing  the  debtor  for  tort,:i  as  for  slander,1  or  assault 
and  battery,5  or  the  misapplication  of  trust  moneys  more 
than  fifteen  years  before  the  conveyance.0  The  statutes 
"are  not  limited  in  their  operation  by  any  Procrustean 
formula."  r  The  doctrine  of  the  case  has  been  enlarged 
to  cover  transfers  of  intangible  rights  and  choses  in  action, 
such  as  stocks,8  transfer  of  an  annuity,9  of  a  policy  of  life 
insurance,10  of  an  equity  of  redemption,11  of  certificates  of 
stock,1"  of  a  legacy,13  insurance  premiums,14  and  all  mere 
choses  in  action.15  Even  an  allowance  for  support  to  a  wife 
under  a  judgment  for  a  divorce  maybe  reached  by  her  cred- 
itors.10 Still  Twyne's  Case  has  taken  deep  hold  in  our  law, 
and  the  main  principles  that  control  the  determination  of 
the  different  phases  of  fraudulent  conveyances  can  gener- 
ally be  traced  to  this  parent  root.     That  the  case  should  at 

'See    Laughton  v.  Harden,  68  Me.  Hadden  v.  Spader,  20  Johns.  (N.  Y.) 

212;  Day  v.  Cooley,  118  Mass.  527.  554;    Weed  v.  Pierce,  9  Cow.  iN.  Y.) 

2  See  Jackson  v.    Seward,    5  Cow.  723,  per  Chancellor   Walworth;    Ed- 
(N.  Y.)  71;    Pennington  v.    Seal,  49  meston  v.  Lyde,  1  Paige  (N.  Y.)  641  . 
Miss.  525;  Hoffman  v.  Junk,  51  Wis.  Beckwith  v.  Burrough,  14  R.  I.  3(i<>. 
614,  8  N.  W.  Rep.  493.    See  Chap.  VI.  '  Norcutt  v.  Dodd,  1  <  !r.  &  I'M.  100. 

3  See  Post  v.  Stiger,  29  N.  J.  Eq.  10  Stokoe  v.  Cowan,  29  Beav.  637: 
558:  Weir  v.  Day,  57  Iowa,  87,  ION.  Skarf  v.  Soulby,  1  Macn.  &  (!.  364  . 
W.  Rep.  304  ;  Langford  v.  Fly,  7  Hum.  In  re  Trustee  Relief  Act,  5  DeC.  &  s. 
(Tenn.)  585  ;  Walradt  v.  Brown,  6  111.  1 ;  Burton  v.  Farinholt,  86  N.  C.  260 
397;  Gebhart  v.  Merfeld,  51  Md.  325:  Mtna,  Nat.  Bank  v.  Manhattan  Life 
Cooke  v.  Cooke,  43  Md.  522;   Fox  v.  Ins.  Co.,  24  Fed.  Rep.  769. 

Hills,  1  Conn.  295.  »  Sims  v.  Gaines,  64  Ala.  397. 

4  Jackson  v.Myers,  18  Johns.  (N.Y.)         '-Scott     v.      Indianapolis     Wagon 
425  ;    Cooke  v.    Cooke,   43  Md.  531  ;      Works,  48  Ind.  78. 

Wilcox  v.  Fitch,  20  Johns.  (N.Y.)  472.  '•  Bigelow  v.  Ayrault.  46  Barb.  (N. 

5  Ford  v.   Johnston,  7  Hun  (N.  Y.)      Y.)  143. 

567;  Slater  v.  Sherman,  5  Bush  (Ky.)  "  Mtna  Nat.  Hank  v.  United  States 

206.  Life  Ins.  Co.,  24  Fed.  Rep.  770. 

6Strong  v.  Strong,  18  Beav.  408.  IB  Greenwood  v.  Brodhead,  8  Barb. 

1  Beckwith    v.   Burrough,   14  R.I.  (N.  Y.)  597 ;    Drake  v.  Rice,  130  Mass 

368.  410. 

8  Bayard  v.  Hoffman,  4  Johns.  Ch.  "Stevenson   v.   Stevenson,  34   Bun 

(N.    Y.)    450,    per    Chancellor  Kent;  (N.  Y.)  157. 


5? 


TWYNE  S   CASE. 


^  22 


this  late  day  be  so  widely  cited  and  relied  upon  ]  is  con- 
clusive proof  that  it  embodies  a  forcible  exposition  of 
sound  and  necessary  rules  affecting  covinous  transfers, 
which  neither  lapse  of  time  nor  change  in  circumstances 
can  supersede.  The  case  attains  the  same  relative  promi- 
nence as  a  precedent  in  the  authorities  that  is  accorded  to 
the  statute  13  Eliz.  c.  5,  as  a  model  for  modern  legislative 
enactments.  It  seems  indeed  strange  that  so  many  evi- 
dences and  badges  of  fraud,  common  with  us  now,  should 
have  been  concentrated  in  such  an  early  case,  and  should 
have  been  so  swiftly  and  skilfully  detected  and  labeled. 
If  the  facts  of  this  case  are  not  partially  fictitious,  and 
there  is  little  reason  to  credit  the  intimation  that  they  are, 
then  it  follows  that  the  methods  and  devices  of  the  fraudu- 
lent debtor  have  undergone  few  alterations  since  this 
remarkable  decision  was  promulgated. 


1  In  Davis  v.  Schwartz,  155  U.  S. 
638,  15  S.  C.  Rep.  237,  Mr.  Justice 
Brown  said:  'It  lias  been  the  accepted 
la  w  ever  since  Twyne's  Case,  3  Coke, 
80,  that  good  faith  as  well  as  a  valua- 
ble consideration  is  necessary  to  sup- 
port a  conveyance  as  against  cred- 
itors. In  that  case  Pierce,  being  in- 
debted to  Twyne  in  £400,  was  sued 
by  a  third  party  for  £200.  Pending 
such  suit  lie  conveyed  all  his  prop- 
erty to  Twyne  in  consideration  of 
his  debt,  but  continued  in  possession, 
sold  certain  sheep  and  set  his  mark  on 
others.  It  was  resolved  to  lie  a  fraud 
ulent  gift,  though  the  deed  declared 
that  it  was  tnsAe  bona  fide.  Mosf  of 
the  cases  illustrative  of  this  doctrine, 
however,  have  been  like  that  of 
Twyne,  wherein   a   debtor,  knowing 

thai  an  execution  was  to  he  taken  out 
against  him.  ha'l  sold  his  property  to 
a    vendee    having    knowledge    of     the 

pet-.  i"i  the  express  purpose  of 
avoiding  a  levy,  or  receiving  a  con- 
sidi  ration  which  could  not  he  reached 
i,\  ex<  cution.     In  such  cases  the  facl 


that  he  receives  a  good  consideration 
will  not  validate  the  transaction,  un- 
less at  least  the  creditor  has  obtained 
the  benefit  of  the  consideration.  A 
like  principle  applies  where  a  mort- 
gage is  given  and  withheld  from 
record  in  order  to  give  the  mortgagor 
a  fictitious  credit.  Cadogan  v.  Ken- 
net  t,  Cowp.  432;  Blennerhassett  v. 
Sherman,  10.">  U.  S.  117;  Sayre  v. 
Fredericks,  16  X.  J.  Eq.  205;  Sweet 
v.  Wright,  57  Iowa.  514.  ION.  W.  Pep. 
870;  1  Story's  Eq.  Juris.  §  353;  Klein 
v.  Hoffheimer,  132  U.S.  367,  10  S.  C. 
Rep.  130;  Holt  v.  Creamer,  34  X.  .1.  Eq. 
181;  Clements  v.  Moore,  6  Wall.  299; 
Wickham  v.  Miller,  12  Johns.  (X.  Y. ) 
320;  Pulliam  v.  Newberry,  41  Ala. 
168:  Robinson  v.  Holt,  39  N.  H.  557. 
In  Twyne's  Case,  the  facts  that  the 
sale  was  accompanied  by  a  secret 
trust  in  favor  of  the  debtor,  and  thai 
the  vendor  remained  in  possession, 
showed  that   it   was   not    intended   a-  a 

bona  fide  preference  to  the  creditor, 
hut  merely  as  a  trick  to  keep  the  prop- 
erty away  from  the  other  creditors." 


CHAPTER  II. 


PROPERTY  SUSCEPTIBLE  OF  FRAUDULENT  ALIENATION. 
AVAILABLE  TO  CREDITORS. 


ASSETS 


Powers,    when   assets   for  cred- 
itors. 

statutory  change  as  to  |.ow  ers  in 
New  York. 

Cifts  of  small  value. 

Debts  forgiven  or  canceled. 

Enforcing  promises  of  third  par- 
ties. 

Tracing  the  fund. 

Income  of  trust  estate 

Rule  as  to  exempt  property. 

Fraudulent  purchases  of  exempt 
property. 

Covinous  alienations  of  exemp- 
tions. 

Conflicting  cases. 

Abandoned  exemptions. 
What  cannot  be  reached. 
Payments  made  to  a  debtor. 


£23.  Interests  available  —  Life  insurance.  —  Having  con- 
sidered the  principles  of  the  common  law  and  the  early 
statutes  and  authorities  relating-  to  covinous  alienations,1 
and  taken  a  general  view  of  the  subject,  it  becomes 
necessary  next  to  discuss  the  various  classes  of  property, 
and  the  rights  and  equitable  interests  of  debtors,  which 
may  constitute  the  subject-matter  of  fraudulent  aliena- 
tions, or  which  can  be  reached  by  creditors'  bills  or  other 
appropriate  remedies,  or  through  the  instrumentality  of 
a  receiver,  liquidator,  or  assignee.  We  have  already 
seen  that  in  general  one  of  the  requisites  of  a  fraudulent 


§  23. 

Interests  available  —  Life 
ance. 

insur- 

g  39 

24. 

Tangible  property  and  intangible 

40. 

interests. 

25. 

Englisb  statutes  and  autborities. 

41. 

26. 

Recovering   improvements  — 

42. 

Rents  and  profits. 

43. 

27. 

Rule  as  to  crops. 

28. 

Property  substituted  or  mingled. 

44. 

29. 

Estates  in  remainder  and 

rever- 

45. 

sion. 

46. 

30. 

Equitable  interests. 

47. 

31. 

Equity  of  redemption. 

32. 

Reservations. 

48. 

33. 

Choses  in  action. 

34. 

Claims  for  pure  torts — Damages. 

49. 

35. 

Seats  in  stock  exebanges. 

50. 

36. 

Trade-marks. 

50a 

37. 

Reacbing  book  royalties. 

506. 

38. 

Patent  rights. 

1  See  §§  19-22. 


54  INTERESTS  AVAILABLE  —  LIFE    INSURANCE.  §23 

transfer  which  will  persuade  the  courts  to  interfere  is 
that  the  property  or  thing  disposed  of  by  the  debtor 
should  be  of  some  value,  out  of  which  the  creditor  might 
have  realized  the  whole  or  a  portion  of  his  claim.1  Hence, 
where  a  debtor  canceled  upon  his  books,  without  con- 
sideration, an  old  account  against  one  who  was  insolvent, 
it  was  declared  that  the  transaction  did  not  amount  to  a 
disposition  of  property  with  intent  to  defraud  creditors." 
The  foundation  of  this  ruling  is  self-evident.  The  court 
will  not  interest  itself  in  any  attempt  to  extend  relief  to 
a  creditor  unless  its  process  and  judgment  can  be  ren- 
dered practically  effectual,  and,  as  a  result  of  its  action,  a 
substantial  benefit  can  be  conferred  upon  the  creditor. 
If  the  property  transferred,  and  sought  to  be  reached  and 
subjected  to  the  process  of  the  court,  is  not  liable  to 
execution,3  or  if  the  debtor  has  no  beneficial  interest  in  it, 
the  court  will  not  inquire  into  the  modes  or  motives  of 
its  disposition.  Such  an  inquiry  would  be  futile.  Hence, 
it  was  held  in  Minnesota,  that  a  conveyance  of  real 
estate  encumbered  for  more  than  its  value  would  not  be 
declared  void  at  the  instance  of  creditors  of  the  grantor, 
though  made  with  the  intent  to  put  the  real  estate  beyond 
their  reach.4  In  Hamburger  v.  Grant,5 it  appeared  that  the 
amount  of  the  indebtedness  to  the  complainant  was  three 
dollars  and  fifty  cents.  In  an  action  to  cancel  a  fraudu- 
lent conveyance,  Kelly,  J.,  observed  :  "  The  interposition 
of  a  court  of  equity  ought  not  to  be  asked  to  set  aside  a 
deed  on  the  ground  of  fraud  for  such  a  small  sum  of 
money."'      The  value  of  the  assigned  property  is  always 

L5.  Compare  Ithaca  Gas  Light  Co.  v. 

Hoyl  v.  Godfrey,  ss  N.  Y.  669.  Treman,  93  N.  Y.  6G0 ;  Chapman   v. 

16.  Hanker  &  Tradesman    Pub.  Co.,  128 

'Aultman  &   T.  Co.    v.    Pikop,   56  Mass.   4?s :  Smith   v.    Williams.    1  Hi 

Minn.  581,  58  N.  W.  Rep.  r,r,\  ■   Blake  Mass.  510,513;  National  Tel.  Mfg.  Co. 

v.    Boisjoli,    51    Minn.    296,   53    N.    W.       v.   Du    Hois,    165   Mass.    117;    42  N.    E. 

1;.  p  687.  Rep.  510. 

1  h  Oregon,  1-.' 


CHAPTER  II. 


PROPERTY  SUSCEPTIBLE  OF  FRAUDULENT  ALIEN- 
ATION.—ASSETS  AVAILABLE  TO  CREDITORS. 


23.  Interests  available  —  Life  insur- 

ance. 

24.  Tangible  property  and  intangible 

interests. 

25.  English  statutes  and  authorities. 

26.  Recovering  improvements  — 

Rents  and  profits. 

27.  Rule  as  to  crops. 

28.  Property  substituted  or  mingled. 

29.  Estates  in  remainder  and  rever- 

sion. 

30.  Equitable  interests. 

31.  Equity  of  redemption. 

32.  Reservations. 

33.  Choses  in  action. 

34.  Claims  for  pure  torts — Damages. 

35.  Seats  in  stock  exchanges. 

36.  Trade-marks. 

37.  Reaching  book  royalties. 

38.  Patent  rights. 


§  39.  Powers,    when    assets  for  cred- 
itors. 

40.  Statutory  change  as  to  powers  in 

New  York. 

41.  Gifts  of  small  value 

42.  Debts  forgiven  or  canceled. 

43.  Enforcing  promises  of  third  par- 

ties. 

44.  Tracing  the  fu  in  I. 

45.  Income  of  trust  estate. 

46.  Rule  as  to  exempt  property. 

47.  Fraudulent  purchases  of  exempt 

property. 

48.  Covinous  alienation  of    exemp- 

tions. 

49.  Conflicting  cases. 

50.  Abandoned  exemptions. 
50a.  What  cannot  be  reached. 
50b.  Payments  made  to  a  debtor. 


Havinof  con- 

o 


§  23.  Interests  available  —  Life  insurance, 
sidered  the  principles  of  the  common  law  and  the  early- 
statutes  and  authorities  relating  to  covinous  alienations,1 
and  taken  a  general  view  of  the  subject,  it  becomes 
necessary  next  to  discuss  the  various  classes  of  property, 
and  the  rights  and  equitable  interests  of  debtors  which 
may  constitute  the  subject-matter  of  fraudulent  aliena- 
tions, or  which  can  be  reached  by  creditors'  bills  or  other 
appropriate  remedies,  or  through  the  instrumentality  of 
a  receiver,  liquidator,  or  assignee.  We  have  already 
seen  that  in  general  one  of  the  requisites  of  a  fraudulent 


1  See  §§  19-22. 


54  INTERESTS   AVAILABLE —  LIFE    INSURANCE.  §23 

transfer  which  will  persuade  the  courts  to  interfere  is 
that  the  property  or  thing  disposed  of  by  the  debtor 
should  be  of  some  value,  out  of  which  the  creditor  might 
have  realized  the  whole  or  a  portion  of  his  claim.1  Hence, 
where  a  debtor  canceled  upon  his  books,  without  con- 
sideration, an  old  account  against  one  who  was  insolvent, 
it  was  declared  that  the  transaction  did  not  amount  to  a 
disposition  of  property  with  intent  to  defraud  creditors.2 
The  foundation  of  this  rule  is  self-evident.  The  court 
will  not  interest  itself  in  any  attempt  to  extend  relief  to 
a  creditor  unless  its  process  and  judgment  can  be  ren- 
dered practically  effectual,  and  as  a  result  of  its  action,  a 
substantial  benefit  can  be  conferred  upon  the  creditor. 
If  the  property  transferred,  and  sought  to  be  reached  and 
subjected  to  the  process  of  the  court,  is  not  liable  to 
execution,"  or  if  the  debtor  has  no  beneficial  interest  in 
it,  the  court  will  not  inquire  into  the  modes  or  motives  of 
its  disposition.  Such  an  inquiry  would  be  futile.  Hence, 
it  was  held  in  Minnesota,  that  a  conveyance  of  real 
estate  encumbered  for  more  than  its  value  would  not  be 
declared  void  at  the  instance  of  creditors  of  the  grantor, 
though  made  with  the  intent  to  put  the  real  estate  beyond 
their  reach.1  In  Hamburger  v.  Grant,5  it  appeared  that  the 
amount  of  the  indebtedness  to  the  complainant  was  three 
dollars  and  fifty  cents.  In  an  action  to  cancel  a  fraudu- 
lent conveyance,  Kelly,  J.,  observed  :  "  The  interposition 
of  a  court  of  equity  ought  not  to  be  asked  to  set  aside  a 
deed  on  the  ground  of  fraud  for  such  a  small  sum  of 
money."       The  value  of  the  assigned  property  is  always 

r>.  *  Compare  Ithaca  Gas  Light  Co.  v. 

1 1. .u  v.  Godfrey,  ^s  X.  Y.  069.  Trenian,  93  N.  Y.   G60  ;  Chapman  v. 

;  I'i.  Banker  &  Tradesman  Pub.  Co.,  128 

»Aultman  A:  T.  Co.   v.   Pikop,  56  Mass.    ITS;  Smith   v.    Williams,   116 

Minn.  581,  58  X.  W,  Rep.  551  ;  Blake  Mass.  510,  513  ;  National  Tel.  Mfg.  Co. 

v.  Boisjoli,  51    Minn.  896,58  X.    W.  v.  Du   Bois,  L65  .Mass.   117,  42  N.  E. 

Rep.  •  Rep.  510. 

-  Oregon,  1 


24      TANGIBLE    PROPERTY    AND    [NTANGIBLE    INTERESTS. 


57 


may  here  observe,  according  to  some  authorities,  has  a 
right  to  devote  a  reasonable  portion  of  his  earnings  to 
life  insurance  for  the  benefit  of  his  family,1  though  the 
statutes  vary  and  the  courts  are  not  entirely  in  harmony 
on  the  subject.3 

It  has  been  said  to  be  a  well-settled  rule  that  a  credit- 
or's bill,  filed  for  the  purpose  of  removing  a  fraudulent 
obstruction,  must  show  that  such  removal  will  enable  the 
judgment  to  attach  upon  the  property;'5  hence  a  valid 
general  assignment  will  supplant  -a  creditor's  proceed- 
ings to  cancel  an  instrument  4such  as  a  mortgage5  if  the 
assignee  and  not  the  creditor  would  be  the  party  bene- 
fited by  a  successful  issue  in  the  suit. 

§24.  Tangible  property  and  intangible  interests. —  What 
interests  then  can  be  reached  by  creditors  ?  Manifestly  all 
tangible  property,  whether  real  or  personal,  which  would 


1  Washington  Central  Bank  v. 
Hume,  128  U.  S.  195,  9  S.  C.  Rep.  41. 
Contra,  Friedman  v.  Fennell,  94  Ala. 
270,  10  So.  Rep.  649  ;  Merchants  & 
Miners'  Trans.  Co.  v.  Borland,  53  N.  J. 
Eq.  287,  31  Atl.  Rep.  272.  In  the 
latter  case  the  court  say  :  "  I  am  un- 
able to  discover  any  principle  or 
well  considered  authority  upon  which 
such  a  transaction  can  be  sustained 
against  creditors.  To  do  so  would, 
as  it  seems  to  me,  be  to  run  coun- 
ter to  principles  so  well  settled 
and  familiar  as  hardly  to  require  re- 
cital. A  husband  cannot  settle  money 
or  property  in  any  shape  upon  his 
wife  while  he  is  indebted.  If  he  at- 
tempts it  the  creditors  are  entitled  to 
the  aid  of  this  court  to  reach  the  prop- 
erty so  settled,  in  whatever  form  it 
may  be  found."  The  notion  that  credi- 
tors could  only  recover  the  amount  of 
their  premiums  (^tna  Nat.  Bank  v. 
United  States  Life  Ins.  Co.,  24  Fed. 
Rep.  770 ;  Hise  v.  Hartford  Life  Ins. 
Co.,  90  Ky.  102  ;  Pence  v.  Makepeace, 


65  Ind.  345),  is  not  accepted  by  the 
writer  of  an  article  in  Vol.  25,  Aruer. 
Law  Rev.  185,  where  the  subject  is 
reviewed  anil  the  decision  in  Wash- 
ington Central  Bank  v.  Hume,  128 
U.  S.  195,  is  criticized.  Examine  in 
this  general  connection  McCutcheon's 
Appeal,  99  Pa.  St.  133;  Stokes  v. 
Coffey,  8  Bush  (Ky.)  533.  In  the  lat- 
ter case,  the  debtor  exchanged  a 
policy  on  his  life  in  his  own  favor  for 
a  similar  policy  payable  to  his  wife, 
it  was  held  that  this  transaction  was 
void  as  to  antecedent  creditors. 

2  See  Barbour  v.  Conn.  Mutual,  61 
Conn.  248 ;  Friedman  v.  Fennell,  94 
Ala.  571.  Id  So.  He,,,  (ill). 

:  Spring  v.  Short.  90  N.  Y.  545.  See 
Geery  v.  Geery.  63  N.  Y.  252  :  South- 
ard v.  Benner,  72  N.  Y.  424. 

4Childs  v.Kendall,  17 Weekly  Dig. 
(N.  Y.)  546. 

'Spring  v.  Short,  12  Weekly  Dig. 
(N.  Y.)  360  :  affi'd  90  N.  Y.  545.  But, 
see  Leonard  v.  Clinton,  26  Hun  (N. 
Y.)  288. 


58         fANGIBLE    PROPERTY    A.ND    [NTANGIBLE    [NTERESTS.      §24 


have  been  subject  to  levy  and  sale  under  execution,  is  sus- 
ceptible of  fraudulent  alienation,  and  may  be  reclaimed  and 
recovered  by  the  creditor  where  it  has  been  transferred  by 
the  debtor  with  the  requisite  fraudulent  intention.  The 
line  is  not  drawn  here,  however.  The  manifest  tendency 
of  the  authorities  is  to  reclaim  every  species  of  the  debtor's 
property,  prospective,  expectant1  or  contingent,  for  the 
creditor.  If  a  conveyance  of  land  is  set  aside,  the  pro- 
ducts of  the  land  may  also  be  reached.'  As  has  been 
shown,  transfers  of  intangible  interests3  and  rights  in 
action,  stocks,4  annuities,5  life  insurance  policies,0  promis- 
sory notes,7  book  royalties/  patent  rights,1'  property  of 
imprisoned  felons,10  legacies,11  money,  bank  bills,12  and 
choses  in  action  generally,13  may  be  reached.  It  has  been 
observed  M  that  the  principle  toward  which  the  highest 


'See  Read  v.  Mosby,  *7  Terra.  759, 
11  s   \v.  Rep.  940. 

State  v.  McBride,  105  Mo.  265, 
15  S.  W.  Rep.  72. 

A  ]>ar<'  possession  or  possibility 
cannot  be  reached  by  creditors:  Smith 
v.  Kearney,  -i  Barb  Ch.  (N.  Y.)  533; 
Waggoner  v.  Speck,  3  Ohio,  293;  nor 
can  they  enforce  a  moral  claim  which 
;i  debtor  may  bave  upon  the  con- 
science of  an  executor.  Sparksv.  De 
La  <  merra,  18  <  !al.  <>7(i. 

1  Baj  ard  v.   I  [off  man,  I  Johns.  <  !h. 

i.\.  V.  1  150  :  W I  v.  Pierce,  9  Cow. 

(N.    Y.i    723;  Edmeston    v.    Lyde,  1 
Paige  1  N.  Y.  1  641, 

Nbrcutl  \.  Dodd,  1  Craig  &  Ph. 
100. 

6  Burton  v.  Farinholt,  86  X.  C  260; 
Stokoe  \.  Cowan,  29  Beav.  637  1  Jen 
kyn  v.  Vaughn,  3  Drew.  419  ;  Anthra- 
cite In-  1  ...  v.  Sears,  109  Mass  383. 

'La  Crosse  Nal  Bank  \.  Wilson,  7* 
Wis.  391.  18  N.  W.  Rep.  158  .  Bragg 
■  .  1  ..,■,  nor,  85  Wis.  168,  55  N.  W. 
Rep.  919;  Johnson  v.  Alexander,  L25 
End.  575,  25  N.  E.  Rep,  706. 


Lord  v.  Barte,  lis  Mass.  271. 

'Barnes  v.  Morgan,  3  Hun  (X.  Y.i 
704. 

'"Matter  of  Nerac,  35  Cal.  392. 

"Bigelow  \.   Ayrault,  46  Barb.  (N 
Y.  I  143. 

See  Bayard  v.  I  lull  man.  4  Johns 
ch.  (X.  Y.)  4.J1  :  Spader  v.  Davis,  ! 
Johns,  ch.  (N.  V.i  280;  Badden  v 
Spader,  20  Johns.  (N.  Y.)554;  Shain 
wald  v.  Lewis,  i;  Fed.  Rep.  770. 

I  Drake  \  .  Rice,  CH)  .Mass. 
Pendleton  \.  Perkins,  4!»  Mm. 
Powell  v.  Howell,  63  N.  C.  283 
meston  v.  Lyde.  1  Paige  (N.  Y.  1 
Stinson  v.  Williams.  ;:;.  ( la.  1  70  ;  Rog- 
ers v.  Jones,  1  Neb.  417  t'ii\  lit'  New- 
ark v.  Funk,  15  Ohio  Si.  462  ;  llitt  v. 
Ormsbeet14Hl.  233  ;  Tantuxn  v.  <  rreen, 
21  N.  .1.  Eq.  864.  Bui  compare  Stew- 
art v.  English,  1;  I  ml  1  ;<; ;  Wallace  v. 
Lawyer,  54  [nd.  501 :  Grogan  v.  Cooke, 
2  Hall  &  B.238 ;  Nantes  v.  Corrock, !) 

Ves.    188. 

II  Esaaj    by   John    Reynolds,    Esq., 
cited  supra. 


410; 

565  : 

Ed- 

037; 


§25  ENGLISH    STATUTES    \\1»     AUTHORITIES.  59 

courts  in  England  and  in  all  the  States  arc  more  or  less 
rapidly  working  is:  "That  the  entire  property  of  which 
a  debtor  is  the  real  or  beneficial  owner,  constitutes  a  fund 
which  is  primarily  applicable,  to  the  fullest  extent  of  its 
entire  value,  to  the  payment  of  its  owner's  debts.  And 
the  courts  will  not  allow  any  of  that  value  to  be  with- 
drawn from  such  primary  application,  if  they  can  find  any 
legal  or  equitable  ground  on  which  to  prevent  such 
withdrawal." 

Creditors  should  remember  that  whether  an  equitable 
interest  in  real  estate  is  liable  to  be  appropriated  by  legal 
process  to  the  payment  of  the  debts  of  the  beneficiary  is 
to  be  determined  by  the  local  law  where  the  property  has 
its  situs} 

§25.  English  statutes  and  authorities.  —  Mr.  May,  an 
English  writer  upon  this  general  subject  of  fraudulent 
alienations,  speaking  of  the  kinds  of  property  or  interests 
which  may  be  reached  by  creditors,  says:2  "The  pre- 
amble of  the  13  Eliz.  c.  5,  declares  it  to  be  made  'for 
the  avoiding  and  abolishing  of  feigned,  covinous,  and 
fraudulent  feoffments,  gifts,'  etc.,  'as  well  of  lands  and 
tenements  as  of  goods  and  chattels,'  made  to  delay  or 
defraud  creditors  ;  and  it  seems  that  under  this  descrip- 
tion are  included  all  kinds  of  property,  real  and  personal, 
legal  and  equitable,3  vested,  reversionary,4  or  contin- 
gent,5 which  are  subject  to  the  payment  of  debts,  or 
liable  to  be  taken  in  execution  at  the  time  of  the  fraudu- 
lent conveyance.0     Generally  speaking,  the  same  general 


'Spindle  v.  Shreve,  111  U.  S.  542;  4  Ede  v.  Knowles,  2  Y.  A:  C.  N.  R. 

Nichols  v.    Levy,    5  Wall.  433.     See  172. 

Nichols  v.  Eaton,  91  U.S.  716-729.  b French  v.  French,  6  De  G.    M.   & 

2  May  on  Fraudulent  Conveyances,  G.  95. 

p.  17.  "  "Sims   v.  Thomas,   12  A.dol.  &    El. 

"Ashfield    v.     Ashfield,    2    Vern.  536 ;  Turnley  v.  Hooper,  2  Jur.  (N.  S.) 

287.  1081. 


6o 


tMPROVEMENTS  —  RENTS    AND    PROFITS. 


§26 


principle  and  rule  of  interpretation  may  be  deduced  from 
the  American  authorities.1 

£  26.  Recovering  improvements  —  Rents  and  profits.— An 
extreme  illustration  of  the  disposition  of  the  courts  to 
favor  creditors  is  the  familiar  and  salutary  rule  that 
improvements  placed  by  a  debtor  upon  real  property  of 
another,  acting  in  concert  with  him  to  defraud  creditors, 
can  be  followed,  and  the  realty  charged  in  favor  of 
creditors  of  the  debtor  with  the  value  of  such  improve- 
ments.'-' In  Isham  v.  Shafer,8  Johnson,  J.,  said  :  "Where 
no   debt   has  been    created    between    the    parties    to    the 


1  Mr.  May  further  observes  :  "  B3  1 
and  '2  Vict.  c.  110,  many  kinds  of 
property  have  been  made  available  to 
creditors  for  the  payment  of  debts. 
s.i  that  now  copyhold  land  [1  and  2 
Vict.  c.  110,  s.  11,  and  see  Bott  v. 
Smith,  21  Bear.  511],  money  and 
bank  notes  [ibid.  i  12,  Barrack  v. 
McCulloch,  :J.  K.  &  J.  110;  Colling- 
ridgev.  Paxton,  11 C.  B.  683](whether 
of  the  Bank  of  England  or  of  any 
other  bank  or  bankers),  and  any 
cheques,  Mil-  of  exchange,  promis- 
sorj  notes,  bonds,  specialties,  or  other 
securities  for  money  [Spirett  v.  Wil- 
lows, 11  Jur.  (N.  s.i  70],  and  stock 
and  shares  in  public  funds  and  public 
companies  [1  and  2  Vict.  c.  110,  §§   11 

and   I.".:    Warden    v.  Jones.  2  De  6.   & 

J.  76;  Goldsmith  v.  Russell,  5  De  Gr. 
M.  &  <;.  547],  are  to  he  considered  as 
dsand  chattels '  wit hin  t he  mean- 
ing of  this  section  [13Ehz.  c.  ■">.  js  1 1." 
May  on  Fraudulent  Conveyances,  p. 
21. 

Rose  \  Brown,  1 1  W.  Va. 
137;  Seasongood  v.  Wan-,  104  Ala. 
212  ;  Heck  \.  Fisher.  78  Ky.  644  ; 
Robinson    \.    Huffman,    15   B.    Mom. 

I  Ky.  1  82  !    A t  li.y    v.  Knoits,  (i  I'..  Mom. 

K\ .)    29;     Sexton    \.     Wheat  on,    8 

Wheat.  229  .  Kirby  v.  Bruns,  45  Mo. 

284  :  Lockhard  v.  Beckley,  10  W.  Va. 


P7;  Burt  v.  Timmons,  29  W.  Va.  458, 
2  S.  E.  Rep.  780;  Dietz  v.  Atwood, 
10  Brad.  (111.)  99 ;  Isham  v.  Schafer, 
60  Barb.  (N.  Y.)  317;  but  compare 
Webster  v.  Hildreth,  33  Vt.  457  : 
Caswell  v.  Hill,  47  N.  II.  407.  In 
Humphrey  v.  Spencer,  36  W.  Va.  11, 
18  ;  US  E.  Rep.  410,  the  court  say  : 
"That  money  of  a  husband  diverted 
from  payment  of  his  debts,  and 
expended  in  permanent  improve- 
ments on  his  wife's  land,  can  be  fol- 
lowed by  his  then  creditors,  whether 
the  act  he  done  with  fraudulent  pur- 
pose or  not,  I  regard  settled  in  tins 
State.  Lockhard  v.  Beckley,  10 W.  Va. 
ST:  Rose  v.  Brown.  1  1  W.  Va  K37:  Kan- 
awha  Valley  Bank  v.  Wilson,  25  W. 
Va.  242  ;  Burl  v.  Timmons.  2!)  W.  Va. 
111.  2  s.  E.  hep.  780.  .Mr.  Bishop,  in 
his  work  on  Law  of  Married  Women 
(volume  2,  §  1 7  J  ■ .  expresses  tin  ■..pinion 
that  it  is  only  where  a  fraudulent 
purpose  on  the  part  of  the  wife  is 
shown  that  her  land  can  he  so 
charged  ;  )>ut  he  admits  that  this 
opinion    does    not    accord    with  the 

weight    of    authority.     This    doctrine 

is  opposed  in  the  cases  of  Webster  v. 
Hildreth,    :;:;    Vt.    457  ;    Corning    v. 

Fowler.  24   la.  584  :    h'ohinson  v.  Huff- 
man. 15  B.  Mon.  (Ky.)  80." 
»60  Barb.  (N.  Y.)  :«0. 


§26  IMPROVEMENTS  —  RENTS    AND    PROFI1    .  6l 

fraudulent  transaction,  and  the  personal  property  of  the 
judgment-debtor  has  merged  in,  and  become  part  of 
the  real  estate  of  another  in  this  way,  the  appropriate,  if 
not  the  only  remedy  is  to  fasten  the  judgment  upon  the 
real  estate  to  the  extent  of  the  judgment-debtor's  property 
thus  made  part  of  the  realty."  In  a  New  Hampshire  case 
it  was  held  that  a  guardian  could  not  purchase  property 
and  place  it  on  the  land  of  his  ward  to  the  injury  of  his 
creditors  j1  but  the  property  was  not  attached  to  the  free- 
hold, and  the  doctrine  may  well  be  doubted  whether  an 
infant's  land  can  be  subjected  to  the  claims  of  creditors 
against  a  debtor  who  has  placed  improvements  on  it.2 
In  Lynde  v.  McGregor,3  where  it  appeared  that  an  insol- 
vent husband  had  made  extensive  expenditures  upon 
lands  belonging  to  his  wife,  and  had  increased  the  value 
of  the  estate,  Gray,  J.,  observed:  "The  amount  of  such 
increase  in  value,  for  which  no  consideration  has  been 
paid  by  the  wife,  and  which  has  been  added  to  her  estate 
by  the  husband  in  fraud  of  his  creditors,  in  equity  belongs 
to  them,  and  may  be  made  a  charge  upon  the  land  for 
their  benefit."  Temporary  or  perishable  improvements,4 
which  do  not  add  to  the  permanent  value  of  the  land,  can- 
not ordinarily  be  reached. 

It  is  certainly  reasonable,  and  it  seems  to  be  clear,  that 
rents  and  profits  can  be  recovered  from  a  fraudulent  gran- 
tee who  holds  the  property  under  a  secret  trust  for  the 
debtor.5     A  creditor,  by  filing  a  bill  after  the  return  of  an 


1  Tenney  v.  Evans,  14  N.  H.  343,  Title  to  Land,  (2d.  ed.)  §  702  ;  Dick  v. 
40  Am.  Dec.  194.  Hamilton,  1  Deady,  322. 

2  Mathes  v.  Dobschuetz,  72  111.  438.  5  Marshall  v.  Croon.  60  Ala.  121. 
Compare  Washburn  v.  Sproat,  16  See  Kipp  v.  Hanna,  2  Bland's  Ch. 
Mass.  449.  (Md.)  26  ;  Robinson  v.  Stewart.  10  N. 

3 13  Allen  (Mass.)  182;  Seasongood  Y.    190.     Compare   Edwards  v.   Ent- 

v.  Ware,  104  Ala.    212,    16  So.    Rep.  wisle.  2  Mackey  (D.  C.)  43;  Hadley 

51;  Humphrey  v.  Spencer,  36  W.  Va.  v.  Morrison,  39  III.  392;  Thompson  v. 

11.  Bickford,  19  Minn.  17:  McGahan  \. 

4  See  Sedgwick  &  Wait  on  Trial  of  Crawford  (S.  <  .  i  25  S.  E.  Rep.  123. 


62  RULE   AS   TO   CROPS.  §  2*] 

execution  unsatisfied,  may  also  obtain  a  lien  upon  the 
rents  and  profits  of  the  real  estate  of  his  judgment-debtor, 
which  accrued  during  the  fifteen  months  allowed  bylaw  to 
redeem  the  premises  from  a  sale  by  the  sheriff  on  execu- 
tion, and  satisfaction  of  the  judgment  may  be  decreed 
out  of  such  rents  and  profits.  The  chancellor  said  :  "Upon 
what  principles  of  justice  or  equity  can  the  debtor  claim 
to  retain  the  whole  rents  and  profits  of  a  large  real  estate, 
for  the  period  of  fifteen  months,  when  such  rents  and 
profits  are  necessary  to  pay  the  debts  which  he  honestly 
owes  to  his  creditors?"1  In  Loos  v.  Wilkinson,2  Earl, 
J.,  used  these  words:  "These  debtors  could  no  more 
give  away  the  rents  and  profits  of  their  real  estate  than 
they  could  give  away  the  real  estate  itself."3 

§  27.  Rule  as  to  crops. — The  same  general  principle  per- 
vades the  cases  as  to  growing  crops.  Thus,  in  Fury  v. 
Strohecker/  it  was  decided  that  a  judgment-creditor  was 
entitled  to  resort  to  crops  grown  upon  the  land  of  his 
debtor  after  it  had  been  transferred  in  fraud  of  his  rights, 
so  far  at  least  as  the  fraudulent  orantor  retained  an  interest 
in  them,  by  an  understanding  with  the  grantee  ;  and  where 
there  was  reason  to  suppose  such  collusion  existed  all 
doubts  should  be  solved  in  the  creditor's  favor.5  And  in 
Massachusetts  it  was  decided  that  if  a  debtor  conveyed 
land  to  his  wife,  with  a  design  to  defraud  his  creditors, 
and  the  wife  participated   in  the  intent,   hay  cut  on   the 


1  Farnham    v.  Campbell,   10  Paige  8  But  compare  Robinson  v.  Stewart, 

(N.    Y.)   598-601.      See  Campbell    v.  L0  N.  Y.  189  ;  Collumb  v.  Read,  24  N. 

Genet,  2   Hilt.   (N.    Y.)  396;    Dow  v.  Y.  505. 

Platner,  16  N.  Y.  565;  Scbermerhorn  'II  Mich.  337. 

\.  Merrill,!  Barb.  (N.  Y.)  517:  Strong  5  Compare  Pierce   v.  Hill,  35  Mich. 

v.  Skinner,  t  Barb.  (N.  Y.  1  558.  201  ;  Petera  v.  Light,  7(5  Pa.  St.  289 

■in>  N.   Y.   214,   inn.   E    Rep.99.  Jones  v.  Bryant,  13  N.  H.  53  ;  Garbutt 

ad  appeal,  LIS  N.  Y  485,  21  N.  E.  v.  Smith,  40  Barb.  (N.  Y.)  22. 
Rep.  '■'<'->2,  involving   rules  as  to  an  ac- 
count Lng  bj  a  fraudulent  grantee. 


§28  PROPERTY    SUBSTITUTED   OR    MINGLED.  63 

land  was  liable  to  be  taken  on  execution  to  satisfy  the 
claim  of  a  creditor  of  the  husband,  upon  a  debt  contracted 
subsequent  to  the  conveyance.1  Even  if  the  land  itself 
is  exempt,  the  crops  growing  thereon,  if  subject  to  levy, 
can  be  reached  in  the  hands  of  a  fraudulent  grantee.'*1 
The  rule  here  laid  down  applies  also  to  the  product  of 
mineral  lands.3 

§  28.  Property  substituted  or  mingled. —  Property  cannot 
be  placed  beyond  the  reach  of  creditors  by  a  change  in  its 
form  or  character.  It  may  be  traced  and  identified.  In 
McClosky  v.  Stewart,4  the  creditor  sought  to  reach  cer- 
tain machinery,  tools,  etc.,  constituting  the  "plant"  of  a 
business  fraudulently  transferred,  and  the  defendant 
attempted  to  limit  the  recovery  to  such  property  as  was 
in  existence  at  the  time  of  the  transfer.  The  court 
declined  to  apply  this  rule  to  the  new  tools  and  machin- 
ery which  had  been  purchased  for  the  purpose  of  supply- 
ing the  waste  incident  to  ordinary  wear  and  tear.  The 
parties  in  possession  having  had  the  benefit  of  the 
machinery  and  tools,  and  having  partially  worn  them  out 
in  the  business,  might  be  said  to  have  had  the  benefit  of 
the  waste,  and  there  was  no  reason  in  law  or  in  equity 
why  the  repairs  and  new  tools,  which  were  rendered  neces- 
sary to  supply  such  waste,  should  not  follow  the  property 
itself.5  

1  Dock!  v.  Adams.  125  Mass.  398.  A  same  case  that  where  a  fraudulent 
mortgage  of  crops  by  which  an  in-  transferee  mingled  his  own  property 
terest  is  reserved  to  the  moi'tgagor  is  with  that  which  he  had  fraudulently 
void.  Merchant's  &  M.  Sav.  Bank  v.  received,  he  would  not  be  allowed  to 
Lovejoy,  84  Wis.  601,  55  N.  W.  Rep.  claim  that  the  property  so  mingled 
108.  should  subsequently  be  assorted  and 

2  Erickson  v.  Paterson,  47  Minn,  set  aside  for  the  payment  of  the  credi- 
525,  50  N.  W.  Rep.  699.  tors.     The  inference  seems  to  be  that 

3  State  v.  McBride,  105  Mo.  265,  15  he  would  lose  it  all.  If  the  property 
S.  W.  Rep.  72.  could  be  readily  identified  and  sepa- 

463  How.  Pr.  (N.  Y.)142.     See  Leh-      rated,  it  is  difficull  to  sec    why    this 

man  v.  Kelly,  68  Ala.  192.  harsh  rule  should  be  applied.     Com- 

5  It    was    further    decided   in  this     pare  Hooley  v.  Gieve,  affirmed  82  N. 


64  ESTATES    IX    REMAINDER    AND    REVERSION.  §  29 

?  29.  Estates  in  remainder  and  reversion. —  A  vested 
remainder  in  fee  is  liable  for  debts  in  the  same  way  as  an 
estate  vested  in  possession.  Though  the  time  of  posses- 
sion is  dependent  upon  the  termination  of  a  life  estate, 
this  only  lessens  its  value  for  the  time  being.  The  lia- 
bility of  the  estate  to  creditors  is  not  in  the  least  affected. 
In  Nichols  v.  Levy,1  Swayne,  J.,  delivering  the  opinion  of 
the  United  States  Supreme  Court,  said  :  "It  is  a  settled 
rule  of  law  that  the  beneficial  interests  of  the  cestui  que 
(rust,  whatever  it  may  be,  is  liable  for  the  payment  of  his 
debts.  It  cannot  be  so  fenced  about  by  inhibitions  and 
restrictions  as  to  secure  to  it  the  inconsistent  character- 
istics of  right  and  enjoyment  to  the  beneficiary  and 
immunity  from  his  creditors.  A  condition  precedent,  that 
the  provision  shall  not  vest  until  his  debts  are  paid,  and  a 
condition  subsequent  that  it  shall  be  divested  and  for- 
feited by  his  insolvency,  with  a  limitation  over  to  another 
person,  are  valid,  and  the  law  will  give  them  full  effect. 
Beyond  this,  protection  from  the  claims  of  creditors  is 
not  allowed  to  go."-  In  French  v.  French,3  it  was  held 
that  a  contingent  reversionary  interest  is  within  the 
statute.4  An  assignment  without  consideration  of  an 
estate  in  expectancy  by  an  insolvent  heir  apparent  has 
been  held  to  be  fraudulent.5  The  husband's  half  or  por- 
tion in  an  estate  in  entirety  can  be  reached  by  his  creditors.6 


Y.  625,  on  opinions  iif  New  York  Com-  eon,    18  Ves.  420:  Piercy   v.  Roberts, 

mon   Plea-  ;    3.  C,   9  Abb.    X.   C.  (N.  1  Mylne  &  K.  4;  Dirk  v.  Pitchford,  1 

Y.)   8,   41,  and   aote   of   the   editor;  Dev.  &  Bat.  (N.  C.)  Eq.  484, 

Dow   v.    Berry,    IT    Fed.    Rep.    121;  GDeG.  M.  &  G.  95.     See   Neale 

Smith  v.  Sanborn,  6  Gray(Mass.)  L34  ;  v.  Day,  28  L.  J.  Ch.  45. 

The  "  Idaho,"  93  U.  S.  575.  4A    contingent    remainder    is    not 

1 5  Wall.  4:5:1  subject    to     execution.    Jackson    v. 

'Citing  Graves  v.  Dolphin,  1  Simon,  Middleton,   52  Barb.  'X.  Y.)9;  Wat- 

66    Biebane   v.  Mebane,    1    [red.    Eq.  son  v.  Dodd,  68  N.  C.  528. 

(X.  C.)  181  :  Bank  v.  Forney,   2  [red.  Read   v.  Mosby,  87Tenn.759,  11  S. 

Eq.    (N.    C.)    L81   ivl:    Snowdon    v.  W.  Rep.  940. 

Dales,  6  Simon,  524  ;  Foley  v.  Burnell,  'Newlove    v.  Callaghan,   86  Mich. 

1  Bro.   0.  C.  374  :  Brandon  v.    Robin-  297,  18  X.  \V.  Rep.  1096. 


§  30  EQUITABLE    INTERESTS.  65 

§30  Equitable  interests. —  Equitable  interests  constitute 
a  frequent  subject-matter  of  creditors'  suits.  In  Sanford 
v.  Lackland,1  the  learned  Dillon,  J.,  held  that  if  property 
was  given  to  trustees  to  hold  for  A.  until  he  reached  the 
age  of  twenty-six  years,  when  it  was  to  be  paid  over  to 
him,  and  A.  became  bankrupt  before  he  arrived  at  twenty- 
six,  his  assignee  in  bankruptcy  was  entitled  to  the  prop- 
erty. Chief-Justice  Gray,  in  Sparhawk  v.  Cloon,3  says, 
that  "the  equitable  estate  for  life  is  alienable  by  and 
liable  in  equity  to  the  debts  of  the  cestui  que  trust,  and 
that  this  quality  is  so  inseparable  from  the  estate  that  no 
provision,  however  express,  which  does  not  operate  as  a 
cesser,  or  limitation  of  the  estate  itself,  can  protect  it 
from  his  debts."3  We  shall  presently  consider  the  cases, 
which  must  be  distinguished  from  the  ones  just  cited,  in 
which  it  is  held  that  the  founder  of  a  trust  may  secure  the 
enjoyment  of  it  to  other  persons,  the  objects  of  his 
bounty,  by  providing  that  it  shall  not  be  alienable  by 
them,  or  be  subject  to  be  taken  by  their  creditors,  and 
that  his  intentions  in  this  regard  will,  in  certain  cases,  be 
respected  by  the  courts.4 

A  creditor's  bill,  through  the  instrumentality  of  a  re- 
ceiver, will  reach  the  interest  of  the  debtor  in  his  deceased 


>  2  Dillon,  6.  Wall.  433,   441  ;  Fox  v.  Peck,  151   111. 

2 125  Mass.  266.  226,    37  N.    E.    Rep.    873.     Compare 

3  See  Brandon  v.  Robinson,  18  Ves.  Potter  v.  Couch,  141  U.  S.  296,  11  S.  C. 

429,      1     Rose,     197;      Rochford     v.  Rep.  1005. 

Hackman,    9   Hare,    475  ;  2  Spence's  4See  Sparhawk  v.  Cloon,  125  Mass. 

Eq.  Jur.  89,  and  cases  cited  ;  Tilling-  266  ;    White    v.    White,    30  Vt.    338, 

hast  v.  Bradford,  5  R.  I.  205  ;  Mebane  344  ;  Arnwine  v.  Carroll,  8  N.  J.  Eq. 

v.Mebane,   4   Ired.    Eq.  (N.  C.)  131  ;  620,    625  ;  Holdship   v.   Patterson,    7 

Heath  v.  Bishop,  4   Rich.   Eq.  (S.  C.)  Watts.  (Pa.)  547;  Brown  v.  William- 

46  ;  Smith  v.  Moore,  37  Ala.  327  ;  Mc-  son,  36   Pa.    St.  338  ;  Rife   v.    Geyer, 

Ilvaine  v.  Smith,  42  Mo.  45  :  Sanford  95   Pa.    St.  393  ;  Nichols  v.  Eaton.  91 

v.    Lackland,  2  Dillon,  6  ;  Walworth,  U.  S.  716,  727-729  ;  Hyde  v.  Woods, 

C,  in  Hallett  v.  Thompson,  5   Paige  94   U.   S.    523,    526;    Broadway    Nat. 

(N.    Y.)    583,    585  ;  Comstock,    J.,  in  Bank  v.  Adams,  133  Mass.  171 ;  Spin- 

Bramhall  v.  Ferris,  14  N.  Y.    41,   44  ;  die  v.    Shreve,    9  Biss.    199,   4    Fed. 

Swayne,  J.,    in   Nichols  v.    Levy,    5  Rep.  136.     See  §§  39,  40. 

5 


66  EQUITY    OF    REDEMPTION  —  RESERVATIONS.       §§31,32 

father's  estate  ; ]  so  an  inchoate  interest  such  as  a  tenancy, 
by  the  courtesy,-  and  a  widow's  dower,3  may  be  reached 
by  the  aid  of  a  court  of  equity. 

§  31.  Equity  of  Redemption.  —  In  a  controversy  which 
arose  in  Alabama,4  it  was  said  that,  aside  from  constitu- 
tional and  statutory  exemptions,  a  debtor  could  not  own 
any  property  or  interest  in  property  -which  could  not  be 
reached  and  subjected  to  the  payment  of  his  debts,  and 
that  an  equity  of  redemption  was  property,  and  was  a  valu- 
able right  capable  of  being  subjected  to  the  payment  of 
debts,  in  courts  of  law  and  in  equity  ;  and  hence  a  transac- 
tion by  which  an  embarrassed  debtor  concealed  the  exist- 
ence of  such  an  interest  from  his  creditors  must  necessarily 
hinder  and  delay  them.5 

§  32.  Reservations  —  Debtors  often  make  reservations 
in  conveyances  for  their  own  benefit,  but  such  subterfuges 
are  idle  so  far  as  subserving  the  debtors'  personal  interest 
is  concerned.6  In  Crouse  v.  Frothin£ham,7  the  debtor 
reserved  the  right  to  use  and  occupy  a  part  of  the  premises 
conveyed  for  three  years  without  rent,  and  it  was  shown 
that  such  use  and  occupation  were  worth  $750.  The 
court  held  that  if  the  reservation  was  effectual  to  vest  in 
the  debtor  a  legal  interest  in  the  premises  to  the  extent 
stated,  his  judgment-creditors  could  reach  it.  And  if  the 
debtor  merely  had  a  parol  lease  for  three  years,  which  was 
void  by  the  statute  of  frauds,  the  consideration  being  fully 
paid,  equity  would  decree  a  specific  performance  of  it,  and 


1  Mr  Arthur  v.   Hoysradt,  11  Paige  5  See  Chautauque  County  Bank  v. 

(N.  Y.)  495.  Risley,    19   N.   Y.    369;    Campbell   v. 

»  Ellsworth    v.    ('<»»k,    s    Paige  (N.  Fish,  8  Daly  (N.  Y.)  102. 

Y.)643;    Beamish   v.    Hoyt,   2   Root.  6  Young  v.  Heennans,  66  N.  Y.  382, 

(N.  Y.)  307.  and  cases  cited;  Todd  v.  Monell,  19 

Tompkins  v.  Fonda,  4  Paige  (N.  Hun   (N.  Y.)  362. 

Y.)  447;  Payne  v.  Becker,  87  N.  Y.  7  27  Hun  (X.  Y.)  125;    reversed,  97 

157.  N.  Y.  105.    See  Elias  v.  Farley,  2  Abb. 

Suns  v.  Gaines,  64  Ala.  393.  Ct.  App.  Dec.  (N.  Y.)  11. 


§  33  CHOSES   IN   ACTION.  67 

thus  the  debtor  would  have  an  equitable  interest  of  some 
value  which  the  creditors  miodit  reach.  The  court  of  last 
resort,  however,  reversed  the  decision  on  the  insufficiency 
of  the  evidence.1 

§  33.  Choses  in  action. —  While  the  books  and  cases  are 
full  of  general  expressions  to  the  effect  that  intangible 
interests  fraudulently  alienated  by  the  debtor  may  be 
reclaimed  by  the  creditor,  yet  the  rule  that  choses  in 
action  can  be  reached  by  creditors  and  subjected  to  the 
payment  of  debts,  has  not  been  established  without  a 
struggle,  and  is  not  even  now  universal  in  its  operation. ' 
When  we  consider  that  vast  fortunes  may  be  concentrated 
in  this  species  of  property,  it  manifestly  becomes  of  para- 
mount importance  to  a  creditor  to  know  whether  his 
process  will  cover  it.  Cases  can  be  found  holding  that 
even  equity  is  ordinarily  powerless  to  require  the  debtor 
to  apply  choses  in  action  in  liquidation  of  debts,3  but  it 
seems  to  us  that  the  better  authority  by  far  is  to  the  effect 
that  such  interests  can  be  reached  by  creditors,4  and 
many  cases,  more  or  less  founded  upon  statutory  provi- 
sions, upholding  the  creditors'  right  to  reach  this  class  of 
assets    might  be  cited.5      Thus  creditors  may  reach  the 


1  Crouse  v.  Frothingham,  97  N.  Y.  4  Drake    v.    Rice,    130    Mass.  410  ; 

105.  Bragg  v.  Gaynor,  85  Wis.  468  ;  55  N. 

'2  See  §  17  ;  Greene   v.  Keene,  14  R.  W.   Rep.  919,  case    citing    the   text  ; 

I.  388  ;  Clapp  v.  Smith,   16  R.   I.  717,  Bayard  v.  Hoffman,  4  Johns.  Cli.  (N. 

19  Atl.  Rep.  330.  Y.)  450;  Powell  v.  Howell,  03  N.  C. 

;iGrogan   v.   Cooke,    2   Ball.    &    B.  283  ;  Ahbott  v.  Tenney,  18  N.  H.  109: 

2:::;  ;  Nantes  v.  Currock,  9  Ves.  188 ;  Sargent    v.    Salmond,    27    Me.    539  ; 

Rider  v.  Kidder,  10  Ves.  368  ;  McCar-  Stinson    v.    Williams,    35    Ga.      170: 

thy    v.    Goold,    1   Ball.    &    B.    387;  Rogers  v.  Jones.  1  Neb.  417  ;  Pend I e- 

Dundas   v.   Dntens,    1   Ves*.    Jr.    196;  ton  v.  Perkins,  49  Mo.  565  ;  Edmeshm 

McFerran  v.  Jones,  2  Litt.  (Ky.)  219;  v.  Lyde,  1  Paige  (N.  V.)  637  ;  Hadden 

Green  v.  Tantnm,  19  N.  J.  Eq.  105  ;  v.    Spader,   20  Johns.    (N.    Y.)    554; 

Wallace    v.    Lawyer,    54    Ind.    501  ;  Mtna  Nat.   Bank  v.  Manhattan  Life 

Stewart  v.  English,  6  Ind.  176  ;  Wat-  Ins  Co.,  24  Fed.  Rep.  769. 

kins  v.  Dorsett,   1  Bland's  Ch.    (Md.)  5City  of  Newark  v.  Funk,  15  Ohio 

533.     See  Greene  v.   Keene,  14  R.  I.  St.    462 ;   Bryans   v.   Taylor,    Wright 

388.  (Ohio)  245  ;  Davis   v.   Sharron,  15  B. 


68  CLAIMS    FOR    PURE    TORTS.  §34 

proceeds  of  a  fraudulently  transferred  insurance  policy.1 
The  principle  running  through  these  cases  is  highly  im- 
portant, for  under  it  the  creditor  may  impound  money  of 
the  debtor  in  the  hands  of  a  sheriff,2  money  earned  but 
not  yet  due,3  money  due  to  heirs  or  distributees  in  the 
hands  of  personal  representatives,4  and  dower  before 
admeasurement.5  And  creditors  of  a  corporation  may 
sustain  a  bill  to  compel  stockholders  to  pay  their 
subscriptions.6 

§  34.  Claims  for  pure  torts  — Damages.  —  The  mere  right 
of  action  of  a  judgment-debtor  for  a  personal  tort,  as  for 
assault  and  battery,  slander,  or  malicious  prosecution,  can- 
not, in  the  nature  of  things,  be  reached  by  a  complainant 
in  a  judgment-creditor's  action.7  Nor  will  a  claim  of  this 
kind  pass  to  a  receiver  under  the  usual  assignment  by  the 
defendant  in  such  a  suit.8  This  rule  proceeds  upon  the 
theory  that  such  claims  or  rights  of  action  are  non-assign- 
able. It  must  be  remembered  in  this  connection,  how- 
ever, that,  in  the  case  of  a  tort,  causing  an  injury  to  the 


Mon.  (Ky.)  64;  Hitt  v.  Ormsbee,  14  106:  Ryan  v.  Jones,  15  111.  1  ;    Sayre 

111.283:    Burnes   v.    Cade,    10  Bush.  v.  Flournoy,  3  Ga.  541. 

(Ky.)  251  ;  Tantum  v.   Green,  21  N.  ''  Stewart   v.  McMartin,  5  Barb.  (N. 

J.   Eq.    364.     "The   words  '  cliose  in  Y.)  438  ;  Tompkins  v.  Fonda,  4  Paige 

action'    might   be   broad  enough   to  (N.  Y.)  448.     See  note  to  Donovan  v. 

include  even  actions  for  damages  in  Finn,  14  Am.  Dec.  542. 

torts,  were  it  no1  that  they  probably  6Miers  v.  Zanesville  &  M.  Turnp. 

have  never  been  regarded  strictly  as  Co.,    11    Ohio    273,     13    Ohio,     197 ; 

property;    nor  as  assignable."    Ten-  Henry   v.    Vermilion   R.    R.  Co.,    17 

Broeck  v.  Slue,  13  Bow.  Pr.  (X.   V.)  Ohio  187;  Hatch  v.  Dana,  101  U.  S. 

30.     See    Budson    v.  I'rets,  11   Paige  205;    Ogilvie  v.    Knox   Ins.    Co.,    22 

V.  I  ISO.     Sec  £  34.  How.  380  ;  Pierce  v.  Milwaukee  Con- 

•iEtna    Nat.    Bank    v.    Manhattan  struetjon    Co.,    38    Wis.    253.       See 

l.itv  In-,  (o    24Fed.  Rep.  769.  Marsh  v.  "Burroughs,  1  Woods,  467. 

Brennan  v.  Burke,  •'-  Rich.  Eq.(S.  7  Hudson  v.  Plets,  11   Paige  (N.  V.) 

J00.  is:;  ;  Ten  Broeck  v.  Sloo,  13  How.  Pr. 

Thompson   v.   Nixon,  3  Edw.  Ch.  (X.  Y  )  30.     See  Garretson  v.  Kane, 

(N.  Y.i  457.     S<«-  Browning  v.  Bettis,  87  N.  .1.  Law,  211. 

8  Paige     N    y.)568  8  Benson  v.  Flower,  Sir  W.  Jones' 

>Moorea  v.   White,   3  Gratt.   (Va.)  Rep.  215  ;   Budson   v.   Plets,  11  Paige 

139;  Caldwell  v.  Montgomery,  8  Ga.  (N.  Y.)  183. 


§35  SEATS    IN   STOCK    EXCHANGES.  69 

property  of  the  judgment-debtor,  accruing  before  the  filing 
of  the  creditor's  bill,  by  means  of  which  injury  certain 
property  to  which  the  creditor  was  entitled  to  resort  for 
the  payment  of  his  debts  has  been  disminished  in  value 
or  destroyed,  the  right  of  action  appears  to  be  such  an 
interest  as  may  properly  be  reached  and  applied  to  the 
payment  of  the  complainant's  claim.1 

§  35.  Seats  in  stock  exchanges.—  Counsel  have  contended 
in  many  cases  that  a  membership  of  a  stock  exchange  was 
a  mere  personal  privilege  or  license,  and  was  not  property 
or  a  right  to  property  which  the  creditors  of  the  member 
could  reach.  Probably  the  enormous  pecuniary  value 
which  not  infrequently  attaches  to  such  a  membership  has 
inspired  the  courts  to  consider  this  so-called  privilege  as  a 
species  of  property,  the  value  of  which  the  debtor  should 
not  be  allowed  to  withhold  from  his  creditors.  It  maybe 
said  to  differ  from  the  membership  of  a  social  club  in  that 
the  latter  has  no  general  value  or  marketable  quality, 
there  being  usually  no  provision  for  its  transfer,  and  noth- 
ing remaining  after  the  member's  death.  Stock  exchange 
memberships,  on  the  other  hand,  being  held  for  pur- 
poses of  pecuniary  gain,  may,  ordinarily,  be  bought  and 
sold  subject  to  the  regulations  of  the  association,  and, 
after  the  owner's  death,  may  be  disposed  of  and  the 
proceeds  distributed.  For  these  reasons  such  inter- 
ests are  held  to  be   assets,2  and,  in  a  certain  sense,  prop- 

1  Hudson  v.  Plets,  11  Paige  (N.  Y.J  Grant.  42  L.  T.  (N.   S.)  387,  22  Alb. 

184.     See  Ten  Broeck  v.  Sloo,  13  How.  L.  J.  70.     In  re  Gallagher,   19  N.  B. 

Pr.  (N.  Y.)  30.  R.  224,  it  was  decided  that  a   license 

'2  See  Grocers'  Bank    v.  Murphy,  60  or  permit  to  occupy  certain  stalls  in 

How.    Pr.    (N.   Y.)    426;    Matter    of  Washington  Market,  New  York  City, 

Ketchum,  1  Fed.  Rep.  840 :  Ritterband  was   property  that   passed   to  an   as- 

v.   Baggett,   42  Superior  Ct.  (N.  Y.)  signee.     But  In  re  Sutherland,  6  Bis 

556;  Colby  v.  Peabody,  52  N.  Y.  Su-  sell,  526,   on  the  contrary,  maintains 

perior,  394  ;  Piatt  v.  Jones,  96  N.  Y.  that  a  right  of  membership  of  a  board 

29  ;  Smith  v.  Barclay,  14  Chicago  Leg.  of  trade  does  not  become  vested  in  an 

News,  222;  and  compare  Ex  parte  assignee.      Compare    Barry   v.   Ken- 


JO  SEATS   IN    STOCK    EXCHANGES.  §  35 

erty.1  In  Hyde  v.  Wood,2  such  a  membership  is  character- 
ized as  an  incorporeal  right  which,  upon  the  bankruptcy  of 
the  member,  passed,  subject  to  the  rules  of  the  stock  board, 
to  an  assignee.  It  is  said,  however,  not  to  be  a  matter 
of  absolute  purchase  or  sale,  but  is  to  be  taken  with  the 
incumbrances  and  conditions  which  its  creators  imposed 
upon  it.  Hence,  a  provision  that  debts  due  other  mem- 
bers shall  be  first  paid  is  valid  and  must  be  carried  out. 
In  Powell  v.  Waldron,3  Finch,  J.,  one  of  the  most  facile 
judicial  writers,  declared:  "Although  of  a  character 
somewhat  peculiar,  its  use  restricted,  its  range  of  pur- 
chasers narrow,  and  its  ownership  clogged  with  conditions, 
it  was  nevertheless  a  valuable  right,  capable  of  transfer 
and  correctly  decided  to  be  property.  It  was  something 
more  than  a  mere  personal  license  or  privilege,  for  it  could 
pass  from  one  to  another  of  a  certain  class  of  persons  and 
belong  as  fully  to  the  assignee  as  it  did  to  the  assignor. 
That  characteristic  gave  it  not  only  value  which  might 
attach  to  a  bare  personal  privilege,  but  market-value 
which  usually  belongs  only  to  things  which  are  the  sub- 
jects of  sale.  However  it  differed  from  the  incorporeal 
rights  earlier  recognized  and  described,  it  possessed  the 
same  essential  characteristics.  It  could  be  transferred 
from   hand  to  hand   and  all  the  time  keep  its  inherent 


nedy,  11   Abb.  Pr.  N.  S.  (N.  Y.)  421.  seat  in  the  board  of   brokers  is  not 

It  seems  clear  that  the  seat  or  license  property  subject  to  execution  in  any 

is  not  liable  to  legal  proceedings  on  form.     It  is  a  mere  personal  privilege, 

fit  ri  facias  or  execution;  Eliot  v.  Mer-  perhaps  more  accurately  a  license  to 

chants'  Exchange  of  St.  Louis,  38  Alb.  buy  and  sell  at  the  meetings  of  the 

L.  J.  512.     In  Thompson  v.   Adams,  board.      It    certainly    could    not    be 

93    Pa.   St.   55,    66,  in  a  per  curiam  levied  on  and  sold   under  a  ft.  fa." 

opinion  in  which  the  learned  Justice  There  is   a   tendency  in  these  cases 

Sharswood   participated,   it  is    said:  that  is  to  be  regretted. 

"  The  seat  is  not  property  in  the  eye  '  Piatt  v.  Jones,  96  N.  Y.  29. 

of  t  lie  law;  it  could  not  be  seized  in  294  U.    S.  524.      See  Sparhawk  v. 

execution  for  the  debts  of  the  mem-  Yerkes,  142  U.  S.  12,  12  S.  C.  Rep.  104. 

bers."     Again,  it  is  observed  in  Pan-  3  89  N.  Y.  331.     See  Piatt  v.  Jones, 

coast   v.   Gowen,  93  Pa,   St.  71:  "A  96  N.  Y.  29,  and  cases  cited. 


§  t,6  TRADE-MARKS.  7 1 

value,  and  be  as  freely  and  fully  enjoyed  by  the  permitted 
purchaser  as  by  the  original  owner.  We  should  make  of 
it  an  anomaly,  difficult  to  deal  with  and  to  understand,  if 
we  fail  to  treat  it  as  property.  The  authorities  which 
determine  it  to  be  such  seem  to  us  better  reasoned  and 
more  wisely  considered  than  those  which  deny  to  it  that 
character,  although  the  subject  of  ownership,  of  use,  and 
of  sale."  The  cases  upon  this  subject  are  fully  reviewed 
by  the  St.  Louis  Court  of  Appeals,  in  Eliot  v.  Merchants' 
Exchange  of  St.  Louis,1  and  the  court  in  conclusion  say  : 
"There  can  be  no  doubt  that  the  weight  of  authority  is, 
that  the  seat  of  a  member  in  a  stock  board  or  merchants' 
exchange  is  a  species  of  property  not  subject  to  ordinary 
execution,  but  which  may  be  reached  by  equity  processes 
in  such  a  way  as  to  respect  the  rules  of  the  exchange  and 
the  rights  of  all  parties  interested,  and  at  the  same  time, 
by  proceedings  in  aid  of  the  execution,  to  compel  an  insol- 
vent member  to  transfer  his  seat  under  the  rules  of  the 
board,  and  apply  the  proceeds  to  the  satisfaction  of  the 
debts  of  his  judgment-creditor."  ~ 

§36.  Trade-marks. —  It  seems  to  be  regarded  as  settled 
law  that  the  right  to  use  a  trade-mark,  in  connection  with 
the  business  in  which  it  has  been  used,  is  property  which 
will  be  protected  by  the  courts,  and  which  may  be  sold 
and  transferred.3  In  Sohier  v.  Johnson,4  the  right  to  use 
a  trade-mark  was    recognized   as   property  which  would 


1  28  Alb.  L.  J.  512.  Cadyi  14  How.  528  ;  Powell  v.  Wald- 

2  In  Sparhawk  v.  Yerkes,  142  U.  S.  ron,  89  N.  Y.  328  ;  Belton  v.  Hatch, 
12,  12  S.  C.  Rep.  104,  Chief  Justice  109  N.  Y.  59:5,  17  N.  E.  Rep.  225  ; 
Fuller,  writes  concerning  membership  Habenicht  v.  Lissak,  78  Cal.  351,  20 
seats  :  "While  the  property  is  pecu-  Pac.  Rep.  874  ;  Weaver  v.  Fisher,  110 
liar  and  in  its  nature  a  personal  privi-  111.  146." 

lege,  yet  such  value  as  it  may  possess,  3  Warren  v.  Warren  Thread  Co.,  28 

notwithstanding    the  restrictions  to  Alb.  L.  J.  278,  134  Mass.  247  ;  Enier- 

which  it  is  subject,  is  susceptible  of  son  v.  Badger.  101  Mass.  82  ;  Oilman 

being  realized  by  creditors.     Ager  v.  v.  Hunnewell,  122  Mass.  139. 

Murray,  105   U.   S.  126  ;  Stephens  v.  4  111  Mass.  238. 


REACHING    BOOK    ROYALTIES.  §37 

pass  to  an  assignee,  as  an  incident  under  a  transfer  of 
the  business  and  good-will.1  The  fact  that  the  trade- 
mark bears  the  owner's  name  and  portrait  does  not  render  it 
unassignable.^  The  same  general  principle  may  be  found 
in  the  English  law,  and  it  has  been  held  that  under  the 
bankrupt  law  a  trade-mark  passes  to  the  assignee  of  the 
owner.8  It  may  be  doubted  whether  mere  personal  trade- 
marks, the  use  of  which,  by  any  person  other  than  the 
originator,  would  operate  as  a  fraud  upon  the  public,  are 
subject  to  this  rule.  Where,  however,  the  trade-marks  are 
mere  signs  or  symbols  designating  the  place  or  the  estab- 
lishment at  which  the  goods  are  manufactured,  and  not 
implying  any  peculiar  skill  in  the  originator  as  the  manu- 
facturer, or  importing  necessarily  that  the  goods  are 
manufactured  by  him,  they  constitute  property  and  pass 
to  an  insolvent  assignee.4 

§  37  Reaching  book  royalties.— An  instructive  case,  illus- 
trative of  the  nature  of  creditors'  remedies,  is  Lord  v. 
Harte.5     The  plaintiff  was  a  judgment-creditor  of  Bret 


1  Kidd  .v.  Johnson,  100  U.  S.  617  ;  tured  at  a  particular  establishment  and 
Trade-mark  Cases,  100  U.  S.  82;  War-  acquires  a  special  reputation  in  con- 
ren  v.  Warren  Thread  Co.,  28  Alb.  L.  nection  with  the  place  of  manufac- 
J.  278.  line,  and  that  establishment  is  fcrans- 

2  Richmond  Nervine  Co.  v.  Rich-  f erred  either  by  contract  or  operation 
niond,  159  U.  S.  293,  16  S.  C.  Rep.  30  ;  of  law  to  others,  the  right  to  the  use  of 
I  i-h  Bros.  Wagon  Co.  v.  La  Belle  the  trade-mark  may  be  lawfully  trans- 
Wagon  Works  82  Wis.  546,  ■">2  X.  W.  ferred  with  it.  Its  subsequent  use  by 
Rep.  595;  Brown  Chemical  Co.  v.  the  person  to  whom  the  establishment 
Meyer,  139  U.  S.  540,  11  S.  C.  Rep.  625.  is  transferred  is  considered  as  only  in- 

8  Leather  Cloth   Co.    v.    American  dicating  that  the  goods  to  which  it  is 

Cloth  Co.,  11    II.  L.  Cas.  523;  Motley  affixed  are  manufactured  at  the  same 

v.  Downman,  3  Myl.  &Cr.  1  ;  Hudson  place  and  are  of  the  same  character  as 

\.  Osborne,  39  L.  J.  Ch.  79.  those  to  which  the  mark  was  attached 

1  Warren  v,  Warren  Thread  Co.,  134  by  its  original  designer."     See  Trade- 

247.  Sec  ( 'ovcll  v.  ( 'had  wick,  L53  .Mark  <  'ases,  100  U.  S.  82  ;  Royal  Bak- 

267;  Prince's  Metallic  Paint  Co.  ing  Powder  Co.  v.  Sherrell,  93N.  Y.  334; 

v.  Prince  Mfg.  Co.,  57  I'd.  Rep.  942.  Richmond  Nervine  Co.  v.  Richmond, 

I,,   Kidd  v.  Johnson.   LOO  U.  S.  617,  L59  U.  S.  293,  16  S.  C.  Rep.. 30. 

the   court    said:     "When   the   trad.-  '■  1  IS  Mass.  271. 

mark  is  affixed  to  articles  manufac- 


§33 


PATENT    RIGHTS. 


73 


Harte,  the  well-known  writer  of  prose  and  poetry,  and 
the  bill  in  question  was  filed,  under  the  General  Statutes 
of  Massachusetts,1  against  Harte  and  his  publishers,  to 
reach  moneys  due  or  that  might  thereafter  accrue  to  him 
for  royalties  upon  books  sold  by  the  publishers.  Devens,  J., 
after  observing  that  the  defendant  Harte  had  a  valu- 
able interest  under  an  existing  contract  which  could  not 
be  attached,  said  :  "  Any  remedy  which  the  plaintiffs 
may  have  by  the  trustee  process,  and  no  other  is  sug- 
gested, is  uncertain,  doubtful  and  inadequate,  and  there 
is,  therefore,  presented  a  case  for  relief  by  this  bill."  ' 

§  38  Patent  rights. —  The  monopoly  which  a  patent  con- 
fers is  considered  as  property  ; 3  the  interest  of  the 
patentee  may  be  assigned  by  operation  of  law  in  case  of 
bankruptcy  of  the  patentee,4  and  it  may  be  subjected  by 
a  bill  in  equity  to  the  payment  of  his  judgment  debts,5 


1  Gen.  Sts.  c.  113,  §  2. 

'2  See  Stephens  v.  Cady,  14  How. 
531. 

3Gayler  v.  Wilder,  10  How.  477, 
per  Taney,  Chief-Justice  ;  Ager  v. 
Murray,  105  U.  S.  126 ;  Barnes  v. 
Morgan,  3  Hun  (N.  Y.)  704.  See 
Railroad  Co.  v.  Trimble,  10  Wall.  367. 

4  Hesse  v.  Stevenson,  3  Bos.  &  P. 
565  ;  Bloxam  v.  Elsee,  1  Car.  &  P.  558 ; 
6  Barn.  &  C.  169  ;  Mawman  v.Tegg,  2 
Russ,  385  ;  Edelsten  v.  Vick,  11  Hare, 
78  ;  Campbell  v.  City  of  Haverhill,  155 
U.  S.  619,  15  S.  C.  Rep.  217,  and  cases 
cited  ;  Barton  v.  White,  144  Mass.  281, 
10  N .  E.  Rep.  840.  In  the  latter  case 
the  court  say  (p.  283):  "  In  Stearns 
v.  Harris,  8  Allen  (Mass.),  597,  it  was 
said  that  '  the  words  of  the  insolvent 
law,  describing  and  enumerating  the 
property  and  rights  of  property  which 
pass  by  the  assignment,  are  large 
and  comprehensive,  and  have  always 
been  liberally  construed  by  the  court, 
so  as  to  include  every  valuable  right 
in    property,    real    or    personal,  not 


clearly  excepted,  whether  legal  in- 
equitable, absolute  or  conditional, 
which  could  have  been  enforced  by 
the  debtor  in  any  kind  of  judicial 
process.'  The  defendants  further  con- 
tend, though  without  laying  very 
much  stress  upon  this  ground  of  argu- 
ment, that  the  state  has  not  the  power 
to  enact  a  statute  which  has  the  effect 
to  pass  a  title  to  letters-patent  of  the 
United  States  ;  but  we  have  no  doubt 
upon  this  point."  But,  compare  Ash- 
croft  v.  Walworth,  1  Holmes,  152; 
Gordon  v.  Anthony,  16  Blatchf.  234  ; 
Carver  v.  Peck,  131  Mass.  291  ; 
Cooper  v.  Gunn,  4  B.  Mon.  (Ky.)  594. 
See  Ager  v.  Murray,  105  U.  S.  L26. 

5  Ager  v.  Murray,  105  U.  S.  126 ; 
Campbell  v.  City  of  Haverhill.  155  U. 
S.  619,  15  S.  C.  Rep.  217;  Barton  v. 
White,  144  Mass.  281,  10  N.  E.  Rep. 
840  ;  Gillette  v.  Bate,  10  Abb.  N.  C. 
(N.  Y.)  38;  Gorrell  v.  Dickson,  26 
Fed.  Rep.  454.  But  see  Greene  v. 
Keene,  14  R.  I.  388. 


74  PATENT    RIGHTS.  §  38 

and  may  be  taken  by  a  receiver,1  or  assignee  in  insol- 
vency.2 Lord  Alvaney,  referring  to  the  proposition  that 
an  invention  was  an  idea  or  scheme  in  a  man's  head, 
which  could  not  be  reached  by  process  of  law,  said  :  "  But 
if  an  inventor  avail  himself  of  his  knowledge  and  skill, 
and  thereby  acquire  a  beneficial  interest,  which  may  be 
the  subject  of  assignment,  I  cannot  frame  to  myself  an 
argument  why  that  interest  should  not  pass  in  the  same 
manner  as  any  other  property  acquired  by  his  personal 
industry."3  And  in  Stephens  v.  Cady,4  Justice  Nelson 
said  in  relation  to  the  incorporeal  right  secured  by  the 
statute  to  an  author  to  multiply  copies  of  a  map  by  the 
use  of  a  plate,  that,  though  from  its  intangible  character 
it  was  not  the  subject  of  seizure  or  sale  at  common  law, 
it  could  be  reached  by  a  creditor's  bill  and  applied  to  the 
payment  of  the  author's  debts.5  If  the  courts  should 
declare  patent  rights  exempt  from  appropriation,  it  would, 
as  suggested  in  Sawin  v.  Guild,"  be  practicable  for  a 
debtor  to  lock  up  his  whole  property,  however  ample, 
from  the  grasp  of  his  creditors,  by  investing  it  in  profit- 
able patent  rights,  and  thus  to  defeat  the  administration 
of  justice.7  We  find  the  statement,  advanced,  however, 
that  it  is  the  patent  only  which  gives  the  exclusive  prop- 
erty, and  while  the  right  is  inchoate  it  is  at  least  doubtful 
whether  it  has  the  characteristics  of  property,  such  as  to 
justify  a  compulsory  transfer  by  the  debtor.  8 


Tnre   Eeach,  14  R.  I.  571.  Cal.    520;    Stevens  v.   Gladding,   17 

Barton  v.  White,    Ml    Mass.   281,  How.  447  ;  Massie  v.  Watts,  6  Cranch, 

10  X.  E.  Rep.  840;  Campbell  v.  City  148;  Storm  v.  Waddell,  2  Sandf.  Ch. 

of  Baverhill,  155  U.  S.  619,  15  S.  < '.  (X.  Y.)  494 

Rep.  217.  61  Gall.  485. 

Besse   v.  Stevenson,  3  Boss.  &  P.  'See   Barnes  v.  Morgan,  3  Hun  (N. 

565.  Y.)  704;  Campbell  v.  City  of  Haver- 

'11      Bow.      531;     Sparhawk     v.  hill,  155  U.  S.  619,  15  S.  C.  Rep.  217. 

Yerkes,  142 U.  S.  12, 12 S.  C.  Rep.  104.  Gillette    v.    Hate,    86    X.   Y.  94; 

>    Sadden  v.  Spader,  20  .Johns.  Besse  v.  Stevenson,  3  Bos.  &  P.  565. 

(N.  Y.)  564;  Gillette   v.    Bate,   86   X.  Compare    Ashcroft  v.    Walworth,   1 

V.sT;    Pacific  Bank  \.  Robinson,  57  Holmes,   152;  Campbell  v.  James,  18 


§39  POWERS,  WHEN    ASSETS    FOR    CREDITORS.  75 

§  39.  Powers,  when  assets  for  creditors. —  Chief-Justice 
Gray,  in  delivering  the  opinion  of  the  Supreme  Judicial 
Court  of  Massachusetts,1  said :  "  It  was  settled  in  the 
English  Court  of  Chancery,  before  the  middle  of  the  last 
century,  that  where  a  person  has  a  general  power  of 
appointment,  either  by  deed  or  by  will,  and  executes  this 
power,  the  property  appointed  is  deemed  in  equity  part 
of  his  assets,  and  subject  to  the  demands  of  his  creditors 
in  preference  to  the  claims  of  his  voluntary  appointees  or 
legatees.3  The  rule  perhaps  had  its  origin  in  a  decree  of 
Lord  Somers,  affirmed  by  the  House  of  Lords,  in  a  case 
in  which  the  person  executing  the  power  had  in  effect 
reserved  the  power  to  himself  in  granting  away  the 
estate.3  But  Lord  Hardwicke  repeatedly  applied  it  to 
cases  .of  the  execution  of  a  general  power  of  appointment 
by  will  of  property  of  which  the  donee  had  never  had  any 
ownership  or  control  during  his  life  ;  and,  while  recog- 
nizing the  logical  difficulty  that  the  power,  when  executed, 
took  effect  as  an  appointment,  not  of  the  testator's  own 
assets,  but  of  the  estate  of  the  donor  of  the  power,  said 
that  the  previous  cases  before  Lord  Talbot  and  himself 
(of  which  very  meagre  and  imperfect  reports  have  come 
down  to  us)  had  established  the  doctrine,  that  when  there 
was  a  general  power  of  appointment,  which  it  was 
absolutely  in  the  donee's  pleasure  to  execute  or  not,  he 
might  do  it  for  any  purpose  whatever,  and  might  appoint 
the  money  to  be  paid  to  his  executors  if  he  pleased,  and, 
if  he  executed  it  voluntarily  and  without  consideration  for 


Blatchf.  92  :  Prime  v.  Brandon   Mfg.  ■  See    Olney    v.    Balch,    L54    Mass. 

Co.,  16  Blatch,  453  ;  Clan  Ranald  v.  318,     28    N.    E.    Rep.    258.    Compare 

Wyckoff,    41  N.    Y.    Superior,    530;  O'Donnell  v.  Barbey,  139  Mass.  453  ; 

Potter  v.  Holland,    4   Blatchf.    206;  Wales  v.  Bowdish,  61  Vt.  33,    1 1  Atl. 

Barnes  v.  Morgan,  3  Hun,  (N.  Y.)  703.  Rep.  1000. 

1  Clapp  v.  Ingraham,  126  Mass.  200  ;  3  Thompson  v.  Towne,  Prcc.  Ch.  52, 

Olney  v.   Balch,  154  Mass.  318,  28  N.  2  Vern.  319. 
E.  Rep.  258  :   Brandies  v.  Cochrane, 
112  U.  S.  352. 


76 


POWERS,  WHEN    ASSETS    FOR   CREDITORS. 


§39 


the  benefit  of  third  persons,  the  money  should  be  con- 
sidered part  of  his  assets,  and  his  creditors  should  have 
the  benefit  of  it.1  The  doctrine  has  been  upheld  to  the 
full  extent  in  England  ever  since.3  Although  the  sound- 
ness  of  the  reasons  on  which  the  doctrine  rests  has  been 
impugned  by  Chief-Justice  Gibson  arguendo,  and  doubted 
by  Mr.  Justice  Story  in  his  Commentaries,  the  doctrine 
is  stated  both  by  Judge  Story  and  Chancellor  Kent  as 
well  settled  ;  and  it  has  been  affirmed  by  the  highest 
court  of  New  Hampshire,  in  a  very  able  judgment, 
delivered  by  Chief-Justice  Parker,  and  applied  to  a  case  in 
which  a  testator  devised  property  in  trust  to  pay  such 
part  of  the  income  as  the  trustees  should  think  proper  to 
his  son  for  life  ;  and  after  the  son's  death,  to  make  over 
the  principal  with  any  accumulated  income,  to  such  per- 
sons as  the  son  should  by  will  direct.3  A  doctrine  so 
just  and  equitable  in  its  operation,  clearly  established  by 
the  laws  of  England  before  our  Revolution,  and  sup- 
ported by  such  a  weight  of  authority,  cannot  be  set  aside 
by  a  court  of  chancery  because  of  doubts  of  the  technical 
soundness  of  the  reasons  on  which  it  was  originally 
established."  Cases  establishing  this  general  rule  are 
numerous.4     The  jus  disponcndi  is   to   be   considered   as 


1  Townshend  v.  Wildham,  2  Ves. 
Sen.  1,  !),  10;  Ex  parte  Caswell,  1 
A t lv .  559,  560;  Bainton  v.  Ward,  7 
Ves.  503.  note  ;  cited  2  Ves.  Sen.  2, 
and  Belt's  Suppl't,  243  :  2  Atk.  172  ; 
Pack  v.  Bathurst,  3  Atk.  269. 

2  Chance  on  Powers,  c.  15,  §  2  ;  2 
Sugden  onPowers  (7th  ed.)27;  Flem- 
ing v.  Buchanan,  3  De  G.  M.  &  G. 
070. 

8  Commonwealth  v.  Duffield,  12 
Penn.  St.  277,  27!)  381  ;  Story's  Eq. 
Jur.  .'  L76,  and  note;  4  Kent's  Com, 
339,  340;  Johnson  v.  Cushing,  15  N. 
H.  298. 

1  Smith    v.  (Jarey,   2   Dev.  &  Bat. 


Eq.  (N.  C.)  49:  Mackason's  Appeal, 
42  Pa.  St.  338  ;  TaUmadge  v.  Sill,  21 
Barh.  (N.  Y.)  51  (but  compare  Cutting 
v.  (Jutting,  86  N.  Y.  522)  ;  2  Chance 
on  Powers,  £  1817;  Whittington  v. 
Jennings,  6  Simons,  493  :  Lassells  v. 
Cornwallis.  2  Vein.  465  ;  Bainton  v. 
Ward,  2  Atk.  172;  Cackv.  Bathurst, 
3  Atk.  269;  Troughton  v.  Troughton, 
3  Atk.  656;  Townshend  v.  Windham, 
2  Ves.  Sen.  1  ;  Jenny  v.  Andrews,  6 
Madd.  201  ;  Ashfield  v.  Ashfield,  2 
Vein.  287;  Cutting  v.  Cutting,  20 
Huu  (N.  Y.)  366;  reversed,  in  part, 
in  86  N.  Y.  522  ;  George  v.  Milbanke, 
9     Ves.      Jr.       196 ;      Flemming     v. 


39 


POWERS,  WHEN    ASSETS    FOR    CREDITORS. 


77 


the  property  itself,1  and  the  general  power  of  disposition 
is  in  effect  property.3  In  Williams  v.  Lomas,3  the  court 
said:  "Jenney  v.  Andrews,4  which  has  been  followed  by 
other  authorities,5  decides  this :  that  where  a  person 
having  a  general  power  of  appointment  by  will  makes  an 
appointment,  the  appointee  is  a  trustee  for  the  creditors, 
and  the  appointed  fund  is  applicable  to  the  payment  of 
the  debts  of  the  donee  of  the  power."  And  it  has  been 
observed  that  there  is  no  reason  in  the  nature  of  things 
why  a  gift  or  bequest  of  personal  property,  with  a  power 
of  disposition,  should  not  be  measured  by  the  same  rule 
as  a  grant  or  devise  of  real  estate  with  the  same  power.0 


Buchanan,  3  DeG.,  M.  &  G.  976; 
Palmer  v.  Whitmore,  2  Cr.  &  M.  [in 
note]  131  ;  Nail  v.  Punter,  5  Sim.  555. 
As  to  creditor's  right  to  enfoi*ce  the 
execution  of  a  power,  examine  Rogers 
v.  Ludlow,  3  Sand.  Ch.  (N.  Y.)  104, 
108  ;  Kinnan  v.  Guernsey,  64  How. 
Pr.  (N.  Y.)  253.  In  Brandies  v.  Coch- 
rane, 112  U.  S.  352,  the  court  say  : 
"  It  is  indeed  a  rule  well  established 
in  England,  and  recognized  in  this 
country,  that  where  a  person  has  a 
general  power  of  appointment,  either 
by  deed  or  by  will,  and  executes  this 
power,  the  property  appointed  is 
deemed,  in  equity,  part  of  his  assets, 
and  subject  to  the  demands  of  his  cred- 
itors in  preference  to  the  claims  of 
his  voluntary  appointees  or  legatees." 

1  Holmes  v.  Coghill,  12  Ves.  206. 
See  Piatt  v.  Routh,  3  Beav.  257. 

2  Bainton  v.  Ward,  2  Atk.  172. 
See  Adams  on  Equity,  99,  note  1.  In  re 
Harvey's  Estate,  L.  R.  13  Ch.  Div.  216; 
Crooke  v.  County  of  Kings,  97  N.  Y. 
457.  Mr.  May  says  :  ;<  The  exercise 
of  a  general  power  of  appointment, 
either  of  land  (Townshend  v.  Wind- 
ham, 2  Ves.  Sr.  1),  or  a  sum  of 
money  (Pack  v.  Bathurst,  3  Atk.  269), 
may  be   fraudulent  and   void   under 


the  statute,  but  where  a  man  has 
only  a  limited  or  exclusive  power  of 
appointment  of  course  it  is  different. 
He  never  had  any  interest  in  the 
property  himself  which  could  have 
been  available  to  a  creditor,  or  by 
which  he  could  have  obtained  credit." 
May  on  Fraud.  Con  v.  p.  29.  See 
Sims  v.  Thomas,  12  Ad.  &.  E.  536  ; 
Hockley  v.  Mawbey,  1  Ves.  Jr.  143, 
150. 

3  16  Beav.  3. 

46Madd.  264. 

5  2  Sugden  on  Powers  (6th  ed.)  29  ; 
1  Sugden  on  Powers  (6th  ed.)   123. 

6  Cutting  v.  Cutting,  86  N.  Y.  547  ; 
Hutton  v.  Benkard,  92  N.  Y.  295. 
The  reservation  of  a  power  of  revoca- 
tion or  appointment  to  other  uses 
does  not  affect  the  validity  of  a  con- 
veyance until  the  power  is  exercise. 1, 
nor  does  it  tend  to  create  an 
imputation  of  bad  faith  on  the  tran- 
sact ion.  See  Huguenin  v.  Baseley, 
14  Ves.  273  ;  Coutts  v.  Acworth,  L. 
R.  8  Eq.  558  ;  Wallaston  v.  Tribe,  L. 
R.  9  Eq.  44  ;  Everitt  v  Everitt,  L.  R. 
10  Eq.  405  ;  Hall  v.  Hall.  L.  R.  14  Eq. 
365;  Phillips  v.  Mullings,  L.  R.  7  Ch. 
App.  244;  Hall  v.  Hall,  L.  R.  8 
Ch.  App.  430  :  Toker  v.  Toker,  3  De 


78  POWERS   IN   NEW   YORK.  §  40 

§  40.  Statutory  change  as  to  powers  in  New  York.  —  The 
principle  which  we  have  been  considering  did  not  meet 
the  entire  favor  of  the  revisers  of  the  statutes  of  New 
York,  and  the  rule  just  laid  down  seems  to  have  been 
practically  overturned  by  statute  in  that  State.1  The 
facts  in  Cutting  v.  Cutting,  a  case  in  which  the  statutes 
relating  to  the  abolition  of  powers  in  New  York  were 
construed,  were  as  follows :  C.  gave  real  and  personal 
estate  to  her  executor  to  collect  the  income  during  the 
life  of  her  son  and  apply  it  to  his  use,  and  after  his  death 
to  transfer  the  estate  to  the  person  the  son  might  desig- 
nate by  will.  The  son  having  made  the  appointment,  it 
was  held  that  the  estate  was  not  chargeable  after  the 
son's  death  with  a  judgment  obtained  against  him  in  his 
lifetime.  It  will  be  apparent  at  a  glance  that  the  result 
of  the  legislation  in  New  York  as  interpreted  in  this  case, 
constitutes  an  important  innovation  upon  what  was  a  set- 
tled principle  of  equity,  and  places  beyond  the  reach  of 
creditors  property  which  equity  considered  should  be  sub- 
ject to  their  remedies.3  A  policy  which  enables  debtors 
to  contract  obligations,  and  defeat  their  payment  by  exer- 
cising a  power  of  appointment  in  favor  of  a  gratuitous 
appointee,  deprives  creditors  of  an  important  source  of 
relief,  and  tends  to  establish  in  the  debtor  rights  over 
property  which  the  creditor  cannot  reach,  a  result  to  be 
universally  deplored.3 


G.,  .1.  &  S.  487.     The  power  is  not  an  Clifton,  101  U.  S.  225,  per  Field,  J.; 

Lnteresl  in  the  property  which  can  be  Brandies  v.  Cochrane,  112  U.  S.  353. 

transferred    t'>    another,    or   Hold    on  'Cutting    v.  Cutting,  20  Hun   (N. 

ution,  '>r  devised  by   will.    The  Y.)  367,   on   appeal,    86    X.  Y.   537; 

grantor    could    exercise    1 1 1 « -    power  Crooke  v.  County  of  Kings,  07  X.  Y. 

either  by  deed  or  will,  hut    he  could  457.     See  Hume  v.  Randall,  141  X.  Y. 

Dot  vesl  the   power    in  any  other  per-  499,  36  N.  E.  Rep.  402. 

3on  to  be  thus  executed.     Nor   is  the  '  See  §  39,  and  cases  cited, 

power  a  chose  Inaction;  nor  does  it  :;  Where  the  debtor  is   entitled   to 

constitute  assets  of  a  bankrupl  which  the  proceeds  of  lands  arising  under  a 

will    vest   in   an  assignee.    Jones  v.  power,   such   lands  or  the   proceeds 


§  41  GIFTS   OF   SMALL   VALUE.  79 

§  41.  Gifts  of  small  value. —  The  Supreme  Court  of 
Maine1  recognize  the  rule  already  adverted  to  that  gifts 
cannot  be  regarded  as  fraudulent  if,  from  their  almost 
infinitesimal  value,  the  rights  of  creditors  would  not  be 
impaired.  In  French  v.  Holmes,2  it  appeared  that  the 
father  made  a  gift  to  his  child  of  a  lamb  which  the  ewe 
refused  to  recognize.  The  court  observed  that  if  the 
lamb  had  been  attached  it  would  not  have  sold  for  a  sum 
sufficient  to  pay  the  fees  of  the  officer  making  the  sale, 
much  less  the  costs  of  obtaining  the  judgment.  Gifts  of 
insignificant  intrinsic  value,  made  from  time  to  time  by  a 
husband  to  his  wife,  will  not  be  avoided  because  he  dies 
insolvent.3  If  the  property  was  exempt,  the  gift  was 
clearly  no  interference  with  the  rights  of  creditors.  The 
court  further  argued  :  "  Now  could  such  a  gift  hinder, 
delay,  or  defraud  creditors?  The  fraudulent  intent  is  to 
be  collected  from  the  comparative  value  and  magnitude 
of  the  gift.  Can  any  one  believe  the  existence  of  a 
fraudulent  intent?"  The  opinion  cited  with  approval 
Hopkirk  v.  Randolph,4  where  the  gift  consisted  of  two 
negro  girls  and  a  riding  horse.  The  learned  Chief-Justice 
Marshall  in  that  case  seemed  to  consider  that  trivial  gifts, 
made  without  any  view  to  harm  creditors,  and  with  inten- 
tions obviously  fair  and  proper,  ought  to  be  exempted 
from  the  general  rule  in  favor  of  creditors.  "  They  do 
not,"  continued  the  Chief-Justice,  "much  differ  from  wed- 
ding clothes,  if  rather  more  expensive  than  usual,  from 


cannot  be  taken  on  execution.     The  attaches  to  the  proceeds  and  does  not 

equitable     interests     of     the    debtor  follow  the  land.     Sayles  v.  Best,  140 

therein  must  be  reached  in  equity,  N.  Y.  368;  Ackerman  v.  Gorton,  07 

and  the  return  of  execution  is  a  con-  N.  Y.  63. 

dition  precedent  to  maintaining  the  '  French  v.    Holmes,   67    Me.    193  ; 

suit.     Harvey  v.  Brisbin,   143   N.  Y.  Klosterman  v.  Vader.  6  Wash.  99,  32 

151,   38  N.  E.  Rep.   108.     Where  the  Pac.  Rep.  1055. 

debtor  is  vested  with  the  title  to  land  2  67  Me.  193.     See  §  23. 

subject  to  a  power  to  be  exercised  for  3  Estate  of  Gross.  19  Phila  (Pa.)  80. 

his  benefit  a  judgment  against  him  42  Brock.  140. 


So  DEBTS    FORGIVEN    OR    CANCELLED.  §§42,43 

jewels,  or  an  instrument  of  music,  given  by  a  man  whose 
circumstances  justified  the  gift.  I  have  never  known  a 
case  in  which  such  gifts  so  made  have  been  called  into 
question."  ' 

§  42.  Debts  forgiven  or  cancelled. —  In  Sibthorp  v. 
Moxom,2  it  was  said  that  where  a  testator  gave  or  for- 
gave a  debt  this  was  a  testamentary  act,  and  would  not  be 
good  as  against  creditors.3  Manifestly  a  cancellation  by 
an  insolvent  of  a  live  and  subsisting  asset,  is  a  fraud  upon 
creditors.  Hence,  where  a  debtor  gave  up  and  cancelled 
without  payment,  a  note  held  by  him  against  a  third 
party,  the  court  very  promptly  decided  that,  after  the 
debtor's  decease,  his  administrator  might  ignore  the  can- 
cellation, and  sue  upon  the  note  for  the  benefit  of 
creditors.4  Martin  v.  Root5  is  a  pointed  illustration  of 
a  different  phase  of  this  doctrine.  One  Larned  conveyed 
a  farm  to  Root  and  others,  and  furnished  the  grantees 
the  means  with  which  to  remove  the  incumbrances  upon 
it,  the  conceded  object  of  the  transaction  being  to  keep 
the  farm  out  of  the  reach  of  Larned's  creditors.  Root 
gave  Larned  a  note  for  $5,072.43,  and  at  the  same  time 
took  back  a  written  promise  from  Larned  that  the  note 
should  never  be  collected.  Larned  having  died  insolvent, 
his  administrator  was  allowed  to  recover  on  the  note,  and 
the  agreement  that  the  note  should  not  be  collected  was 
held  void  in  respect  to  creditors. 

§  43.  Enforcing  promises  of  third  parties.  —  The  doctrine 


•   Partridge  v.  Gopp,  Ami..  596.  8  Compare,  generally  as  to  the  efted 

Compare    Eanby   v.    Logan,  I    Duv.  of   cancellation,    Martin  v.    Root,    I? 

(Ky.)  342;  Garrison  v.  Monaghan,  33  Mas  ,  322,   per  Chief-Justice   Parker; 

Pa.  St   232;  Estate  of  Gross,  19  Phila.  McGay  v.   Keilback,   II  A.bb.   Pr.  iX. 

JO,  reviewing  the  cases,  Lush  v.  Y.i  142;  Wise  \.  Tripp,  13  Me.  12. 

Wilkinson,  5  Ves.  384;  Chambers  v.  'Tolman  v.   Marlborough,  3  N.  H. 

Spencer,  5  Watte  (Pa.)  104.     See  §§  57. 

15,  23,  and  note.  5  17  Mass.  322. 

-:;  Alkyn 


§  43  PROMISES    "I     1  MIKl.    PAR  III-.  8l 

of  Lawrence  v.  Fox,1  and  cases  embodying  the  general 
principle  that  where  one  person,  for  a  valuable  considera- 
tion, engages  with  another,  by  a  simple  contract,  to  do 
j  ome  act  for  the  benefit  of  a  third  person,  the  latter,  who 
would  enjoy  the  benefit  of  the  act  if  performed,  may 
maintain  an  action  for  breach  of  the  engagement/-  has 
been  successfully  invoked  in  aid  of  creditors.  Tims  in 
Kingsbury  v.  Earle,3  it  appeared  that  a  father  had  con- 
veyed* lands  to  his  sons  upon  their  orally  agreeing,  in 
consideration  of  the  conveyance,  to  pay  all  his  debts. 
The  court  held  that  the  creditors  of  the  father  might 
avail  themselves  of  the  agreement,  and  bring  actions 
founded  on  the  promise  against  the  sons  to  recover 
debts,  even  though  the  amount  of  the  debts  exceeded 
the  value  of  the  land,  and  that  the  consideration  named 
in  the  deed  would  not  determine  its  actual  value. 
An  agreement  of  this  character  is  not  a  promise  to  pay 
the  debt  of  another  within  the  statute  of  frauds.  And 
where  partnership  assets  are  assigned,  and  as  part  of  the 
consideration  the  purchaser  agreed  to  pay  the  firm  debts, 


'20  N.  Y.  268.    See  Prime  v.  Koeh-  Y.   236:    Hall  v.  Marston,   17    Mass. 

ler,  77  N.  Y.  91;  Gifford  v.  Corrigan,  575  ;  Cross  v.  Truesdale,  28  Ind.    1 1  ; 

117    N.  Y.    263,    22    N.    E.  Rep.  756  ;  Scott  v.  Gill,   19  Iowa,   187;  Rice   v. 

Clark  v.  Howard,  150  N.  Y.  238.  Savery,  22  Iowa,  470;   Devol   v.    M, 

2  Hand  v.  Kennedy,   83  N.  Y.  154  ;  Intosh,  23  Ind.  529  ;  Allen  v.  Thomas. 

Wager  v.  Link,  134  N.  Y.  122,  31  N.  3  Met.  (Ky.)  198  :  Jordan  v.  White,  20 

E.  Rep.  213;  First  Nat.  Bk.  v.  Chal-  Minn.  91;  Rogers  v.   Gosnell,  58  Mo. 

mers,  144  N.    Y.   432,  39  N.   E.  Rep.  590;   Wiggins  v.   McDonald,    IN  Cal. 

331;  Clark  v.  Howard,  150  N.  Y.  238;  126  ;  Miller  v.  Florer,  15  Ohio  St.  151 ; 

Burr  v.  Beers,  24  N.  Y.  178  ;  Glen  v.  Green  v.  Richardson,  4  Col.  584  ;  Hank 

Hope  Mutual  Life  Ins.  Co.,  56  N.  Y.  of   the  Metropolis  v.  Guttschlick,  11 

381;    Ricard  v.  Sanderson,  41  N.  Y.  Peters,     31;    Bradwell    v.    Weeks,    1 

179;  Secorv.  Lord,  3  Keyes  (N.  Y)  Johns.    Ch.     (N.     Y.)   206.     Compare 

525;   Thorp  v.   Keokuk  Coal  Co.,  48  Mtna, Nat.  Bank.  v.  Fourth  Nat.  Bank, 

N.  Y.   253:  Campbell  v.  Smith,  71  N.  46  N.  Y.  82  ;  Lean  v.  Edge,  M   X.    Y. 

Y.  26;  Van  Schaick  v.  Third  Ave.  R.  514  ;  Simson   v.  Brown,  (is  X.  Y. 

R.  Co.,  38  N.  Y.  346  ;  Coster  v.  Mayor  Belknap  v.  Bender,  75  X.  Y.  449. 
etc.,  43  N.  Y.  411  ;  Barker  v.  Bradley,  3  27  Hun  (N.  Y.,  141,  cf.    O'Neil   v. 

42  N.  Y.  319  ;  Vrooman  v.  Turner,  69  Hudson  Valley  [ce  Co.,  M    Sun   (N. 

N.  Y.  284  ;  Garnsey  v.  Rogers,  47  N.  Y.)  105,  26  N.  Y.  Supp.  598. 

6 


82  PROMISES   OF   THIRD    PARTIES.  §  43 

any  creditor  may  avail  himself  of  the  promise  and  sue  the 
purchaser  for  the  amount  of  his  claim  j1  and  if,  under 
such  circumstances,  a  bond  is  taken,  the  creditors  may 
get  the  benefit  of  it.~  But  the  principal  running  through 
these  cases  is  not  universally  recognized.  It  does  not 
fully  obtain  in  the  English  cases  or  in  Massachusetts.  In 
the  latter  Commonwealth,  Gray,  J.,  in  the  course  of  an 
opinion,  said  :  "  The  general  rule  of  law  is,  that  a  person 
who  is  not  a  party  to  a  simple  contract,  and  from  whom  no 
consideration  moves,  cannot  sue  on  the  contract,  and  con- 
sequently that  a  promise  made  by  one  person  to  another, 
for  the  benefit  of  a  third  person  who  is  a  stranger  to  the 
consideration,  will  not  support  an  action  by  the  latter."3 
It  is  foreign  to  the  scope  of  this  treatise  to  fully  discuss  in 
all  its  bearings  the  rule  allowing  third  parties  to  enforce 
these  promises  made  for  their  benefit.  It  certainly  has 
obtained  a  deep  and  wide  foundation  in  our  law;  its 
operation  avoids  circuity  of  action,  reduces  the  expense 
and  volume  of  litigation,  and  brings  the  real  claimant  and 
party  beneficially  interested  in  the  controversy  before  the 
court.  The  arguments  against  its  adoption,  based  upon 
common-law  theories  and  rules,  are  inequitable  and 
technical,  and  lead  to  a  harsh  result.4 


1  Sanders  v.  Clason,  13  Minn.  379  ;  the    latter   would   sell    the    property 

Barlow  v.   Myers,  6  T.  &  C.  (N.  Y.)  and    apply    the    proceeds    upon    the 

183  ;  Meyer  v.  Lowell,  44  Mo.  328.  plaintiff's   execution.      The  receiver 

1  Kimball    v.    Nbyes,   17  Wis.  695;  realized   on   the  sale.     The   plaintiff 

Devol  v.  Mcintosh,  23  Ind.  529.      Es-  in  the  execution  Drought  this  action 

pecially  Claflin  v.    Ostrom,   54  N.  Y.  against  the    receiver    on    the    parol 

581.  promise  made  to  the  sheriff  for  plain- 

3  Exchange   Bank  of   St.   Louis  v.  tiff's  benefit.     The  court  decided  that 

Rice,  107  Mass.  41.  although   the  promise  was  not  made 

4In  Beckfr   v.  Torrance,    31  N.  Y.  totheplaintiffdirectly.it   was  avail- 

631-643,  it  appeared  thai  the  plaintiff  able  to  him  on  the  principle  of  Law- 

had  levied  upon  certain   property  of  rencev.  Fox,  20  N.  Y.  268,  and  Burr 

tin    defendant;   subsequently     ;i     re-  v.  Beers,  24  N.  Y.  178,  and  that  he 

ceiver  was  appointed  al  tin-  instance  had  the  right  to  adopt  and  enforce  the 

of  another   creditor.     The  sheriff  re-  promise  inst cud  of  proceeding  directly 

1    the    levy    upon    receiving    a  against  the  sheriff, 
promise     from     the    receiver     that 


44 


TRACING   THE    FUND. 


83 


44.  Tracing  the  fund. —  It  is  a  clearly  established  prin- 
ciple in  equity  jurisprudence  that  whenever  a  trustee,  has 
been  guilty  of  a  breach  of  trust,  and  has  transferred  the 
property  by  sale  or  otherwise  to  any  third  person,  the  cestui 
que  trust  has  a  full  right  to  follow  such  property  into  the 
hands  of  the  third  person,  unless  the  latter  stands  in  the 
position  of  a  bona  fide  purchaser  for  valuable  consideration 
without  notice  ;  and  if  the  trustee  has  invested  the  trust 
property  or  its  proceeds  in  any  other  property  into  which 
it  can  be  distinctly  traced,  the  cestui  que  trust  may  follow 
it  into  the  new  investment.1  This  doctrine  has  been  ap- 
propriated and  applied  to  cases  of  property  alienated  in 
fraud  of  creditors  ;  and  it  has  been  expressly  held  that  a 
complaining  creditor  has  a  right  to  follow  the  fund  result, 
ing   from  the  covinous  alienation,    into  any  property  in 


1  Oliver  v.  Piatt,  3  How.  401  ;  Mc- 
Leod  v.  First  Nat.  Bank,  42  Miss.  99  ; 
Jones  v.  Shaddock,  41  Ala.  262  ;  La- 
throp  v.  Bainpton,  81  Cal.  17  ;  Story's 
Eq.  Jur.  §  1258  ;  Mansellv.  Mansell,  2 
P.  Wins.  079  ;  Dewey  v.  Kelton,  18 
N.  B.  R.  218  ;  Pennell  v  Deffell,  4  De 
G.,  M.  &  G.  372  ;  Frith  v.  Cartland,  2 
Hem.  &  M.  417,  420  ;  In  re  Hallet's 
Estate,  Knatchbull  v.  Hallet,  L.  R.  13 
Ch.  D.  096 ;  Farmers  &  Mechanics' 
Nat.  Bank.  v.  King,  57  Pa.  St.  202. 
Compare  Smith  v.  Bowen,  35  N.  Y. 
83  ;  Lyfordv.  Thurston,  10  N.  H.  399  ; 
Barr  v.  Cubbage,  52  Mo.  404  ;  Hooley 
v.  Gieve,  9  Abb.  N.  C.  (N.  Y.)  8.  See 
§  28.  Examine  especially  National 
Bank  v.  Insurance  Co.,  104  U.  S.  54  ; 
Jones  v.  Van  Doren,  130  U.  S.  691, 
9  S.  C.  Rep.  085  ;  Union  Stock  Yards 
Bank  v.  Gillespie,  137  U.  S.  421,  11  S. 
C.  Rep.  118  ;  Spokane  Co.  v.  Clark,  61 
Fed.  Rep.  538  ;  Peters  v.  Bain,  133  U. 
S.  070,  10  S.  C  Rep.  354.  It  is  said 
by  Mr.  Justice  Bradley  in  Freling- 
huysen  v.  Nugent,  30  Fed.  Rep.  229, 


239.  "  Formerly  the  equitable  right  of 
following  misapplied  money  or  other 
property  into  the  hands  of  the  parties 
receiving  it,  depended  upon  the  ability 
of  identifying  it ;  the  equity  attaching 
only  to  the  very  property  misapplied. 
This  right  was  first  extended  to  the 
proceeds  of  the  property,  namely,  to 
that  which  was  procured  in  place  of 
it  by  exchange,  purchase,  or  sale. 
But  if  it  became  confused  with  other 
property  of  the  same  kind,  so  as  not 
to  be  distinguishable,  without  any 
fault  011  the  part  of  the  possessor,  the 
equity  was  lost.  Finally,  however, 
it  has  been  held  as  the  better  doctrine 
that  confusion  does  not  destroy  the 
equity  entirely,  but  converts  it  into  a 
charge  upon  the  entire  mass,  giving 
to  the  party  injured  by  the  unlawful 
diversion  a  priority  of  right  over  the 
other  creditorsof  the  possessor.  This 
is  as  far  as  the  rule  has  been  carried." 
Quoted  in  Peters  v.  Bain,  133  U.  S. 
094,  10  S.  C.  Rep.  354. 


84  INCOME   OF   TRUST   ESTATE.  §  45 

which  it  was  invested,  so  far  as  it  can  be  traced,1  But  in 
creditors'  suits  the  subject-matter  of  pursuit  should  be 
something  so  specific  that,  as  to  it,  either  in  law  or  in  equity, 
the  plaintiff's  judgment  or  execution,  or  the  filing  of  the 
bill,  or  the  appointment  of  a  receiver,  will  create  a  lien 
or  make  a  title.2  In  Gillette  v.  Bate,:i  the  fraudulent 
grantee  had  taken  stock  in  a  corporation  in  exchange  for 
the  property  fraudulently  transferred,  and  it  was  held 
that  creditors  could  reach  the  stock,  although  it  had 
increased  in  value.4  Where  property  is  obtained  by 
fraud,  and  the  proceeds  of  a  sale  of  it,  such  as  notes,  are 
identified  in  the  hands  of  a  voluntary  assignee  of  the 
fraudulent  vendee,  a  court  of  equity  may  reach  such  pro- 
ceeds for  the  defrauded  vendor.5  So  a  defrauded  ven- 
dor may  follow  the  proceeds  of  his  goods  in  the  hands  of 
a  sheriff  who  has  levied  on  them,6  and  a  cestui  que  trust 
may  recover  the  proceeds  of  a  life-insurance  policy  taken 
out  by  a  defaulting  trustee  with  the  trust  moneys  in  the 
name  of  the  trustee's  wife.7  To  sustain  a  claim  for  pay- 
ment out  of  a  fund  in  the  hands  of  an  assignee  or  receiver 
upon  the  ground  of  fraud,  it  must  appear  that  the  fund 
was  increased  by  having  in  its  mass  the  very  thing  parted 
with  or  its  proceeds.8 

§45.  Income    of    trust    estate.  —  Williams     v.     Thorn9 


1  Clements  v.  Moore,  6  Wall.  315,  6  Converse    v.  Sickles,    146    N.    Y. 
31 G.     See  Chalfont  v.  Grant,   1  Am.  200,  40  N.  E.  Rep.  777. 

Insolv.  R.  251  ;  Marsh  v.  Burroughs,  '  Holmes  v.  Gilman,  138  N.  Y.  369, 

1    Woods,  463  ;    Solinsky  v.    Lincoln  34  N.  E.  Rep.  205. 

Savings  Bank,  85  Tenn.  372.  8  City    Bank    of    Hopkinsville     v. 

2  Ogden  v.  Wood,  51  How.  Pr.  (N.  Blackmore,  43  U.  S.  App.  617  ;  Boone 
Y.)375.     See  §28.  Co.  Nat.  Bank  v.   Latimer,   67   Fed. 

8  10  Abb.  N.  C.  (N.  Y.)  92.  Rep.   27;    Cragie  v.    Hadley,    99    N. 

4  See  Steere  v.  Hoagland,  50  111.  377.  Y.  131,  1  N.  E.  Rep.  537. 

Compare  Phipps  v.  Sedgwick,  95  .U.  '■>  70    N.    Y.   270.      See  McEvoy    v. 

S.  3.  Appleby,  27  Hun  (N.  Y.)  44;  Tolles 

American  Sugar  Refining  I  !o.   v.  v.  Wood,  (.)U  X.  Y.  616;   Wetmore  v. 

Fancher,  145  N.  V.  553,40  N.  E.  Rep.  Wetmore,   149  N.   Y.  520.     Compare 

206.  Spindle  v.  Shreve,  111  U.  S.  546,  4  S. 


§  45  INCOME   OF   TRUST   ESTATE.  85 

firmly  established  the  doctrine,  in  New  York  State  at 
least,  that  the  income  of  a  trust  fund  enjoyed  by  the 
debtor  beyond  a  sum  considered  necessary  for  the  actual 
support  of  himself,  his  wife  and  infant  children,1  may  be 
reached  by  judgment-creditors,  and,  like  the  rest  of  the 
debtor's  estate,  such  surplus  income  is  liable  to  be  taken 
for  the  payment  of  creditors.  This  doctrine  was  not 
established  without  a  struggle,  and  debtors  are  still  con- 
stantly seeking  to  circumvent  it.3  The  Chancellor 
observed  in  Hallett  v.  Thompson3  that  it  was  contrary 
to  sound  policy  to  permit  a  person  to  have  the  ownership 
of  property  for  his  own  purposes,  and  be  able  at  the  same 
time  to  keep  it  from  his  creditors.  A  creditor,  by  filing 
a  bill,  acquires  a  lien  on  such  surplus  income  superior  to 
the  claims  of  general  creditors  or  assignees  of  the 
beneficiary.4  In  Williams  v.  Thorn,5  Rapallo,  J.,  said: 
"  By  the  analogy  which  courts  of  justice  have  always 
endeavored  to  preserve  between  estates  or  interests  in 
land,  or  the  income  thereof,  and  similar  interests  in 
personal  property,  the  right  of  a  judgment-creditor  to 
reach  the  surplus  rents  and  profits  of  land,  beyond  what 
is  necessary  for  the  support  and  maintenance  of  the 
debtor  and  his  family,  entitles  him  to  maintain  a  creditor's 
bill  which  will  reach  a  similar  interest  of  the  debtor  in  the 
surplus  income  of  personal  property  held  by  another  for 
his   use  and  benefit ;  but   not  that  part   of    the    income 

C.  Eep.  522;  Nichols  v.  Eaton,  91  U.  Hun    (N.    Y.)   117;   McEvoy   v.  Ap- 

S.    716  ;  Cutting  v.  Cutting,  86  N.  Y.  plehy,  27  Hun  (N.  Y.)  44. 

546.     If  in  a  suit  to  which  the  benefi-  -'  See  Nichols  v.    Eaton,   91  U.   S. 

ciary  is  a  party  a  trust  has  been  de-  716  ;  Spindle  v.  Shreve,  111  U.  S.  542, 

clared  valid,  the  decree  is  binding  on  546,  4  S.   C.   Rep.  522  ;  Wetmore  v. 

the    judgment    creditors.      Pray    v.  Wetmore,  149  N.  Y.  520  ;  also  Chap. 

Hegeman,  98  N.  Y.  351 ;  Cook  v.  Lowry,  XXIII. 

95  N.  Y.  111.  5  Paige  N.  Y.  586. 

1  Wetmore  v.  Wetmore,  149  N.  Y.  4Tolles  v.  Wood,  99  N.  Y.  616,  1  N. 

529  ;  Tolles  v.  Wood,  99  N.  Y.  616  ;  E.  Rep.  251. 

Bunnell  v.  Gardner,  4  App.  Div.  (N.  5  70  N.  Y.  273. 
Y.)    321  ;  Andrews  v.    Whitney,    82 


86  INCOME   OF   TRUST   ESTATE.  §  45 

which  may  be  necessary  for  the  support  of  the  judgment- 
debtor."  The  debtor's  station  in  life,  the  manner  in 
which  he  has  been  reared  and  educated,  his  habits  and 
the  means  he  may  have  to  aid  in  his  support  are  consid- 
ered.1 The  doctrine  of  Williams  v.  Thorne,  with  refer- 
ence to  reaching  surplus  trust  income  seems  to  have  been 
acknowledged  in  the  earlier  New  York  cases,  both  as  to 
the  income  of  realty  and  personalty  2  though  there  is  a 
dictum  by  Wright,  J.,  in  Campbell  v.  Foster,3  denying 
that  the  income  of  the  cestui  que  trust  can  be  diverted  to 
creditors.4  The  confusion  introduced  into  this  branch  of 
the  law  in  New  York  State  which  led  to  the  general,  but 
erroneous,  belief  that  a  debtor's  trust  income,  though 
fabulous  in  amount,  was  not,  in  any  form,  available  to 
creditors,  was  partially  attributable  to  the  fact  that  the 
unsuccessful  actions  had  been  instituted  by  receivers  in 
supplementary  proceedings,5  as  to  whom  the  courts  held 
the  right  to  reach  income  did  not  pass  until  it  had  actu- 
ally accumulated.0  But  where  the  judgment  creditor 
sues,  not  only  the  income  accumulated  in  the  trustees' 
hands,7  which  may  also  be  reached  by  supplementary 
proceedings,  but  the  future  income,  above  the  sum  found 
necessary  for  the  support  and  use  of  the  cestui  que 
trttst,  and  those  legally  dependent  upon  him,  may  be 
impounded.8       Hann    v.  Van  Voorhis,9   holding  that  only 


1  Wetmore  v.  Wetmore,  149  N.  Y.  Scott  v.  Nevius,  6  Duer  (N.  Y.)  672  ; 
520.  Locke  v.  Mabbett,    2   Kcyes    (N.    Y.) 

2  See  Rider  v.  Mason,  4  Sandf.   Ch.  457 ;  Campbell   v.    Foster,   35   X.   Y. 
(N.  Y.)  351  ;  Sillick  v.  Mason,  2  Barb.  361. 

Ch.  (N.  Y.)  79  ;  Braiuhall  v.  Ferris,  14  7The    beneficiary   may    assign   ac- 

N.  Y.  41  :  Scott  v.  Nevius,  6  Duer  (N.  crued  income.    Tolles  v.  Wood,  99  N. 

X.)  072  :  Graff  v.  Bonnctt,  31  N.  Y.  9.  Y.  01(5,  1  N.   E.   Rep.   251  ;   Matter  of 

35  X.  Y.  361.  Valentine,  5  Misc.  (N.  Y.)  479,  26  N. 

'See  Locke  v.  Mabbett,  2  Keyes (N.  Y.  Sup]).  716. 

Y.)457,  ••;   AM..  A  pp.  I  ).--•.  (N.  Y.)  68.  "  Williams   v.   Thorn.  70  X.  Y.  270; 

Continental    Trust    Co.    v.     Wet-  Wetmore  v.  Wetmore,  149  N.  Y.  520  ; 

more,  M    Hun  (N.   V.  1   9,  21   N.  Y.  Howard  \.  Leonard,  3  App.  Div.  (X. 

Supp.  746.  Y.)277. 

•See  Graff  v.  Bonnett,  31  N.  Y.  9  ;  »15  Abb.  Pr.  X.  S.  (N.  Y.)  79. 


§  46  RULE   AS   TO    EXEMPT   PROPERTY.  Sj 

actual  accumulations  in  the  hands  of  the  trustees  could 
be  reached,  must  be  regarded  as  overruled  by  Williams 
v.  Thorn.1  The  burden  of  proving  that  the  income 
exceeds  the  requirement  of  the  debtor  rests  upon  the 
creditor.2  A  creditor,  it  may  be  noted,  may  also  get  the 
benefit  of  an  annuity  given  by  a  will  in  lieu  of  dower.3 
A  wife  may  also  reach  her  former  husband's  surplus 
income  and  apply  it  to  the  payment  of  the  alimony  due 
her.  In  some  respects  she  stands  in  the  position  of  an 
ordinary  creditor,  in  others  her  rights  are  superior  to  those 
of  an  ordinary  creditor,  as  it  is  the  duty  of  the  husband  to 
maintain  her  according  to  the  directions  of  the  decree  not- 
withstanding- the  divorce. 4 

§  46.  Rule  as  to  exempt  property.—  It  being  a  test  of  a 
fraudulent  transfer  that  the  property  alienated  must  be  of 
some  value  out  of  which  the  creditor  could  have  realized 
the  whole  or  a  portion  of  his  claim,5  it  would  seem  to 
follow  logically  that  exempt  property  is  not   susceptible 


1  70  N.  Y.  279.     Wetmore  v.    Wet-  Greene,  125  N.  Y.  506,  26  N.  E.  Rep. 

more,  149  N.  Y.  529.    See,  also,  infra,  739. 

Chap.  XXIII  on  Spendthrift  Trusts;  -Bunnell  v.  Gardner,  4  App.  Div. 

and  compare  Nichols  v.  Eaton,  91  U.  (N.  Y.)  321  ;  Kilroy  v.  Wood,  42  Hun 

S.    716  ;     Broadway    Nat.    Bank    v.  (N.   Y.)    636.     Where  a  wife  is  the 

Adams,    133    Mass.    170;    Billings   v.  beneficiary  and   debtor  her   creditors 

Marsh,  153  Mass.  311,  26  N.    E.    Rep.  may  reach   such  surplus  income  as  is 

1000 ;    Wemyss  v.  White,    159  Mass.  not  needed  for  the    support  of  the 

484,    34   N.   E.  Rep.    718;    Spindle   v.  wife     and      children.       Howard     v. 

Shreve,  9  Biss.  199  ;  Hyde  v.    Woods,  Leonard,  3  App.  Div.  (N.  Y.)  277. 

94  U.  S.  523,  526.     Wetmore  v.   Trus  3Degraw  v.  Clason,  11  Paige  (N.  Y.) 

low,  51  N.  Y.  338,  was  not  a  suit  to  136. 

reach  surplus,  but  the  whole   income,  4  Examine   Romaine  v.    Chauncey, 

on  the  ground  that  the   beneficiary  129  N.  Yr.  566  ;  Wetmore  v.  Wetmore, 

was  also  a  trustee.     As  to  the  effect  149  N.  Y.  520;  Andrews  v.  Whit  my, 

of  appointing  the  beneficiary  trustee  82   Hun  (N.  Y.)  117  ;  Miller  v.  Miller, 

see  Losey  v.  Stanley,  147  N.    Y.   560,  7    Hun   (N.    Y.),    208  ;  Thompson    v. 

42  N.  E.  Rep.  8;  Rose  v.  Hatch,  125  N.  Thompson,  52  Him  (N.  Y.)  456,  5  N. 

Y.  427,  26  N.  E.  Rep.  467  :  Greene  v.  Y.  Supp.  604. 

5  See  8  23. 


RULE  AS  TO  EXEMPT  PROPERTY. 


46 


of  fraudulent  alienation.1  As  the  creditor  possesses  no 
right  to  have  that  class  of  property  applied  in  satisfaction 
of  his  claim  while  the  debtor  owns  it,  and  would  be  power- 
less to  seize  or  appropriate  it  for  that  purpose  were  it 
restored  to  the  debtor's  possession,  the  legitimate 
deduction  would  seem  to  be  that  the  creditor's  process 
could  not  be  fastened  upon  it  in  the  hands  of  the  debtor's 
alleged  fraudulent  vendee."  As  to  alienations  of  exempt 
property  there  may  be  a  bad  motive  but  no  illegal  act.3 
When  a  fraudulent  transfer  has  been  avoided,  it  leaves  the 
creditor  to  enforce  his  remedy  against  the  property  in  the 
same  manner  as  if  the  fraudulent  transfer  had  never  been 
executed.  The  creditor  cannot  ask  to  be  placed  in  a 
better  position  in  respect  to  the  property  than  he  would 
have  occupied  if  no  fraudulent  bill  of  sale  had  ever 
been     made.4      On     the    point    whether    the    fact    that 


1  In  Denny  v.  Bennett,  128  U.  S. 
495,  9  S.  C.  Rep.  134,  the  court  say: 
"No  reason  has  been  suggested  why 
the  legislature  could  not  exempt  all 
interests  in  landed  estate  from  exe- 
cution and  sale  under  judgments 
against  the  owner,  and  perhaps  all 
his  personal  property." 

8  See  Wood  v.  Chambers,  20  Texas, 
247  ;  Foster  v.  McGregor,  11  Vt.  595  ; 
Whiting  v.  Barrett,  7  Lans.  (N.  Y.) 
106  ;  Bean  v.  Smith,  2  Mason,  252  ; 
Winchester  v.  Gaddy,  72  N.  C.  115  ; 
Legro  v.  Lord,  10  Me.  161  ;  Smith  v. 
Allen,  39  Miss.  469;  Youmans  v.  Boom- 
bower,  3  T.  &  C.  (N.  Y.)  21  ;  Pike  v. 
Miles,  23  Wis.  164  ;  Dreutzer  v.  Bell, 
11  Wis.  114  :  Smillie  v.  Quinn.  90  N. 
Y.  493  ;  Robb  v.  Brewer.  15  Rep. 
048  ;  Premo  v.  Hewitt,  55  Vt.  363  ; 
Blair  v.  Smith,  114  Ind.  114.  15  N.  E. 
Rep.  817;  Bloedorn  v.  Jewell,  34  Neb. 
650,  52  N.  W.  Rep.  367;  Shawano 
County  Bank  v.  Koeppen,  7s  Wise  5:;:!, 
17  N.  \V.  Rep.  723;  Beyer  v.  Thoeming, 
81  la.  517,  46  N.  W.  Rep.  1074  ;  Payne 


v.Wilson,  76  la.  377,  41  N.  W.  Rep.  45  ; 
Dull  v.  Merrill,  69  Mich.  49,  36  N.  W. 
Rep.  677  ;  Horton  v.  Kelly,  40  Minn . 
193,  41  N.  W.  Rep.  1031  ;  Munson  v. 
Carter,  40  Neb.  417,  58  N.  W.  Rep. 
931  ;  Rozek  v.  Redzinski,  87  Wise. 
525,  58  N.  W.  Rep.  262  :  Nance  v. 
Nance,  84  Ala.  375,  4  So.  Rep.  699  ; 
Kvello  v.  Taylor,  5  N.  Dak.  78. 

3  O'Connor  v.  Ward,  60  Miss.  1037. 
"To  property  so  exempted  the  credi- 
tor has  no  right  to  look,  and  does  not 
look,  as  a  means  of  payment  when  his 
debt  is  created  ;  and  while  this  court 
has  steadily  held,  under  the  constitu- 
tional provision  against  impairing  the 
obligations  of  contracts  by  State  laws, 
that  such  exemption  laws,  when  first 
enacted,  were  invalid  as  to  debts  then 
in  existence,  it  has  always  held,  that, 
as  to  contracts  made  thereafter,  the 
exemption  were  valid."  Nichols  v. 
Eaton,  91  U.  S.  726. 

'Sheldon  v.  Weeks,  7  N.  Y.  Leg. 
Obs.  60. 


§  46  RULE   AS   TO   EXEMPT   PROPERTY.  89 

land  has  been  purchased  with  money  which  itself 
was  exempt,  such  as  pension  money,  prevents  the 
claims  of  creditors  from  attaching  to  it,  the  decisions 
are  conflicting.  Kentucky  denies  the  exemption,1  while 
New  York  favors  it.2  And  it  seems  from  the  current 
of  adjudications  that  a  conveyance  of  lands  set  aside  for 
fraud  at  the  suit  of  creditors  does  not  estop  the  grantor 
from  claiming  a  homestead  in  the  premises  thus  con- 
veyed. Such  a  conveyance  does  not  constitute  an 
abandonment  of  the  homestead  so  as  to  open  it  to  cred- 
itors.3 A  person  may  change  his  homestead,  and  where 
in  order  to  reduce  the  encumbrance  on  his  new  home- 
stead he  gives  such  encumbrancer  a  mortgage  on  his  old 
one,  this  transaction  cannot  be  attacked  by  his  creditors.4 
A  general  assignment  is  not  invalidated  by  a  clause  which 
reserves  all  exempt  property;5  nothing  is  withheld 
which  the  creditors  are  entitled  to  have  included  in  the 
trust ;  and  in  New  York  a  receiver  of  a  judgment-debtor 
gets  no  title  to  exemptions.6  The  exemption  is  said,  how- 
ever, to  endure  only  during  the  lifetime  of  the  party,  and 


1  Johnson  v.  Elkins,  90  Ky.  163,  13  tors  is  not  predicable  of  the  convey- 
S.  W.  Rep.  448  ;  Hudspeth  v.  Hani-  ance  of  property  thus  exempt ;  and 
son,  6  Ky.  Law  Rep.  304.  so  the  title  to  it  is  not  impeachable 

2  Yates  Co.  Nat.  Bank  v.  Carpenter,  by  creditors  of  the  debtor  making 
119  N.  Y.  550,  23  N.  E.  Rep.  1108.  such  conveyance."    Proutv.  Vaughn, 

3  Turner  v.  Vaughan,  33  Ark.  460  ;  52  Vt.  459. 

Thompson  on  Homesteads,  J:  408,  etc.,  4  Palmer  v.  Hawes,    80  Wise.   474, 

and  cases  cited.     "  It  is  evident,"  says  50  N.  W.  Rep.  341  ;  Bogan  v.  Cleve- 

Mr.  Freeman,  "  that  creditors  cannot  land,  52  Ark.  101,  12  S.  W.  Rep.  159. 

be  defrauded,  hindered,  or  delayed  by  5  Richardson  v.  Marqueze,  59  Miss, 

the  transfer  of  property  which,  neither  80,    42    Am.    Rep.    353;    Hildebrand 

at  law  nor  in  equity,  can  be  made  to  v.    Bowman,   100    Pa.    St.    580.     See 

contribute  to  the  satisfaction  of  their  Smith    v.    Mitchell,    12    Mich.    180  ; 

debts.     Hence  it  is  almost  universally  Mulford    v.    Shirk,  26   Pa.   St.    473; 

conceded  that  property  which  is,  by  Heckman   v.    Messinger,    49   Pa.  St. 

statute,  exempt  from  execution,  can-  465.  Contra,  Sugg  v.  Tillman,  2  Swan 

not  be  reached  by  creditors  on  the  (Tenn.)  208. 

ground  that  it  has  been  fraudulently  6  Finnin  v.  Malloy,  33  N.  Y.  Super, 

transferred."      Freeman    on    Execu-  Ct.  383 ;  Cooney  v.  Cooney,  65   Barb, 

tions,  §  138.     "  Fraud  against  credi-  (N.  Y.)  524. 


9o 


PURCHASES   OF   EXEMPT   PROPERTY. 


47 


consequently  a  gift  of  exempt  personalty,  intended  to 
take  effect  upon  the  death  of  the  donor,  and  made  with 
the  object  of  defrauding"  creditors,  cannot  be  sustained.1 
The  property  must  have  been  exempt  at  the  time 
the  conveyance  was  made ;  if  the  right  of  exemption 
has  arisen  since  the  alleged  fraudulent  conveyance, 
the  better  rule  is  that  it  cannot  be  relied  upon  as  a 
defense. ~ 


§  47.  Fraudulent  purchases  of  exempt  property.  —  In  con- 
formity with  the  general  rule  that  exempt  property  is  not 
usually  susceptible  of  fraudulent  alienation  as  regards 
creditors,3  the  courts  have  decided  that  there  is  no  intel- 
ligible ground  upon  which  it  can  be  held  to  be  fraudulent 
for  a  person  whose  property  does  not,  in  the  aggregate, 


1  Martin  v.  Crosby,  11  Lea  (Term.) 
198.  In  Tillotson  v.  Wolcotfc,  48  N. 
Y.  190,  it  appeared  that  the  debtor 
had  recovered  a  judgment  against  a 
creditor  for  an  unlawful  levy  upon 
and  sale  of  the  debtor's  exempt  prop- 
erty. A  creditor  sought  to  get  the 
benefit  of  this  judgment  on  the  ground 
that  the  character  of  the  property  had 
been  changed.  The  court  said:  "It 
would  be  useless  to  grant  the  privi- 
lege contained  in  the  statute  if  it 
could  be  rendered  of  no  effect  by  re- 
fusing  an  adequate  remedy  for  the 
invasion  of  the  exemption  ;  or  by  per- 
mitting a  recovery,  when  obtained 
for  such  invasion,  t<>  be  wrested  from 
the  debtor  by  proceedings  on  behalf 
of  his  creditors.  The  judgment, 
when  recovered  by  the  debtor  for 
the  wrongful  invasion  of  his  privilege 
of  the  exemption  of  his  property 
from  Levy  and  sale,  represents  the 
property  for  the  value  of  which  it 
was  recovered.  Ee  may  make  an- 
other investment  of  the  money  to  be 
recovered  in  the  same  description   of 


property,  in  the  possession  of  which, 
as  a  householder,  or  person  providing 
for   the    support    of   his   family,  the 

statute  will  again  protect  him 

The  proceeds  of  the  judgment  should 
be  held  to  be  protected  under  the 
statute,  as  exempt  property,  until 
sufficient  time  lias  elapsed  to  afford 
the  debtor  a  reasonable  opportunity 
to  again  purchase  the  description  of 
property  necessary  to  enable  him  to 
support  his  family,  and  in  the  pos- 
session of  which  the  law  will  protect 
him  as  against  the  claims  of  credi- 
tors." See  Andrews  v.  Rowan,  28 
How.  Pr.  (N.  Y.)  120. 

'  Phenix  Ins.  Co.  v.  Fielder,  133 
Ind.  557,  33  N.  E.  Rep.  270;  Kingen 
v.  Stroh,  130  Ind.  010,  36  N.  E.  Rep. 
519. 

8Boggs  v.  Thompson.  13  Neb.  403; 
Derby  v.  Weyrich,  8  Neb.  174;  Crum- 
inen    v.    Be 1,  08   N.  C.  494.     See 

16;  Nelson  v.  Frey,  4  Tex.  App.  Civ. 
(as.  248;  Yates  County  Nat.  Bank 
v.  Carpenter,  119  N.  Y.  550,  23  N.  E. 
Rep.  1108. 


§  47  PURCHASES   OF   EXEMPT    PROPERTY.  91 

exceed  the  value  of  all  the  exemptions,  but  a  portion  of 
which  property  is  in  a  form  not  exempt,  to  convert  or 
exchange  it  into  the  particular  kinds  of  property  which 
are  exempt.  Thus  in  O'Donnell  v.  Segar,1  the  court 
argued:  "The  only  fraud  claimed  to  have  existed  in 
reference  to  the  oxen,  was  that  he  might  fraudulently 
have  acquired  them  from  the  proceeds  or  exchange  of 
other  property  which  was  not  exempt,  and  this  with  the 
intent  to  defeat  the  claims  of  creditors.  This,  in  my 
opinion,  if  true,  does  not  constitute  legal  fraud,  so  long 
as  he  was,  in  fact,  engaged   in   one  of  the  occupations 

mentioned in  which  the  use  of  the  cattle  was 

needed."  In  Randall  v.  Buffington,2  the  court  decided 
that  a  general  creditor  of  an  insolvent  debtor  could  not 
subject  a  homestead  to  liability  for  his  debts  notwith- 
standing the  insolvent  had  applied  property  in  his  hands 
to  the  payment  of  a  debt  which  was  a  lien  on  the  home- 
stead.3 "  It  must  be  remembered,"  said  Chief-Justice 
Breese,  "that  it  is  not  a  fraud  on  creditors  to  buy  a  home- 
stead which  would  be  beyond  their  reach."4  This  would 
seem  to  afford  a  debtor  an  opportunity  to  practice  a 
species  of  petty  fraud  upon  his  creditors,  but,  as  exemp- 
tions of  property  from  execution  are  usually  very  limited 
in  amount,5  and  the  policy  of  the  law  is  to  prevent  the 
creditor  from  absolutely  stripping  the  debtor  of  every 
vestige  of  property,  and  of  all  the  necessary  conveniences 
of  living,  or  means  of  gaining  a  subsistence,  the  result 
is  not  to  be  deprecated.  Manifestly  the  creditor  should 
not  be  favored  to  the  extent  of  absolutely  crippling  and 
pauperizing  the  debtor,6  or  rendering  him  a  public  charge. 


'25  Mich.  377.  5See  Nichols  v.  Eaton,  91  U.  S.  726. 

MOCal.  493.  BSee  Hixon    v.   George,  18  Kansas 

»kSee  In  re  Henkel,  2  Sawyer,  308.  253.      "The    debtor,    by    securing    a 

"Cipperly    v.   Rhodes,  53   111.    350.  homestead    for   himself    and    family, 

See,  also,  Finn  v.  Krut,  (Tex.  Ct.  Civ.  whether    by    an    arrangement    with 

App.  1896)  34  S.  W.  Rep.  1013.  creditors  who  might  levy  on  it,  or  bj 


92 


COVINOUS   ALIENATIONS   OF   EXEMPTIONS. 


§48 


But  where  the  statute  exempts  from  the  claims  of  cred- 
itors a  homestead,  especially  when  such  exemption  is 
irrespective  of  its  value,  it  would  lead  to  the  grossest 
fraud  if  a  debtor,  on  the  eve  of  insolvency,  were  allowed 
to  invest  his  money  in  exempt  property  of  this  kind.1 

§48.  Covinous  alienations  of  exemptions.  —  A  convey- 
ance of  homestead  by  an  embarrassed  debtor  and  his  wife 
to  a  third  party,  and  by  the  third  party  to  the  wife,  cannot 
be  set  aside  as  fraudulent  and  void  as  to  creditors,  for  the 
homestead  is  out  of  their  reach,2  and  in  general  a  volun- 
tary conveyance  of  property  exempt  from  execution  vests 
a  good  title  in  the  donee,  as  against  the  creditors  of  the 
donor.8  The  creditor,  as  we  have  said,  cannot  be  injured 
or  defrauded  by  the  transfer  of  property  which  is,  by 
positive  law,  expressly  exempt  from  seizure  to  satisfy 
their  debts.4     The  dissolution  of  an   insolvent  firm  and 


the  purchase  of  a  house,  or  by  moving 
into  a  house  which  lie  already  owns, 
takes  nothing  from  his  creditors 
which  the  law  has  secured  to  them, 
or  in  which  they  have  any  vested 
right.  He  conceals  no  property.  He 
merely  puts  his  property  into  a  shape 
in  which  it  will  be  the  subject  of  a 
beneficial  provision  for  himself  which 
the  law  recognizes  and  allows." 
Hoar,  J.,  in  Tucker  v.  Drake,  11  Allen, 
(Mass.)  146. 

///  re  Boothroyd,  3  Fed.  Cases,  892, 
14  N.  B.  R.  223  ;  Peninsular  Stove  Co. 
v.  Roark,  (la.)  63  N.  W.  Rep.  726. 
But  see  Jacob}'  v.  Parkland  Distilling 
Co.,  41  Minn.  227,  43  N.  W.  Rep.  52. 

-  Morrison  \.  Abbott,  27  Minn.  1  10. 
See  Ferguson  v.  Knmler,  27  Minn. 
L56 ;  Baldwin  v.  Rogers,  28  Minn. 
.144;  McFarland  v.  Goodman,  6  Biss. 
Ill;  Vogler  v.  Montgomery,  54  Mo. 
578;  Cox  v.  Wilder,  2  Dillon,  46; 
White  v.  (iivi'iis,  29  La.  Ann.  571; 
Midler   v.    Inderreiden,   79    111.    382; 


Hugunin  v.  Dewey,  20  Iowa,  368 ; 
Buckley  v.  Wheeler,  52  Mich.  1  ; 
Schribar  v.  Piatt,  19  Neb.  631  ;  Moore 
v.  Flynn,  135  111.  74,  25  N.  E.  Rep.  844  ; 
Hodges  v.  Winston,  95  Ala.  514,  11  So. 
Rep.  200. 

3  Furman  v.  Tenny,  28  Minn.  77  ; 
Duvall  v.  Rollins,  68  N.  C.  220 ;  Mose- 
ley  v.  Anderson,  40  Miss.  49  ;  Anthony 
v.  Wade,  1  Bush  (Ky.)  110  ;  Patten  v. 
Smith,  4  Conn.  450  ;  Tracy  v.  Cover, 
28  Ohio  St.  61.     See  §  46. 

4  Morrison  v.  Abbott,  27  Minn.  116  ; 
Carhart  v.  Harshaw,  45  Wis.  340, 
30  Am.  Rep.  752,  and  notes  ;  Delash- 
mut  v.  Trau,  44  Iowa,  613  ;  Smith  v. 
Rumsey,  ::::  Mich.  183  ;  Derby  v.  Wey- 
rich,  8  Neb.  174;  Megehe  v.  Draper, 
21  Mo.  510  ;  Washburn  v.  Goodheart, 
88  111.  229;  Hixon  v.  George,  18  Kans. 
•-'■">:;  ;  O'Conner  v.  Ward.  60  Miss.  1036  ; 
Thomson  v.  Crane,  73  Fed.  Rep.  327; 
Simsv.  Phillips,  54  Ark.  198,  MS.W. 
Rep.  461. 


§  49  CONFLICTING   CASES.  93 

division  of  the  assets  among  the  partners  with  a  view  of 
securing  the  members  the  benefit  of  individual  exemp- 
tions, if  accomplished  without  actual  fraud,  is  valid.1 
Unsevered  partnership  property  is,  of  course,  not 
exempt.2 

§  49.  Conflicting  cases.  —  The  cases  are  not,  however, 
uniform  in  this  regard,  and  are  in  some  instances  disin- 
clined to  allow  a  debtor  to  turn  what  was  intended  as  a 
shield  of  poverty  into  an  instrument  of  fraud;3  and 
there  are  decisions  of  at  least  local  authority  which  deny 
the  benefit  of  the  exemption  laws  to  a  dishonest  debtor 
who  shuffles  and  conceals  his  property,4  or  executes  a  home- 
stead deed  in  furtherance  of  a  design  to  hinder,  delay, 
and  defraud  creditors  in  the  recovery  of  their  just  debts.5 
And  it  has  been  held  that  the  privileges  of  the  homestead 
act  may  be  forfeited  by  fraud,6  and  the  right  to  claim 
exemption  also  forfeited  and  lost.7  This  does  not,  it 
seems  to  us,  vary  the  general  principle  already  stated,  for 
in  these  latter  cases  the  property  is  not  considered  to  be 
under  the  cover  or  protection  of  the  exemption  statutes, 


1  Bates  v.  Callender,  3  Dak.  256,  16  barrasses  the  officers  of  the  law  in  the 
N.  W.  Rep.  506.  execution  of  their  legal  duties,  he  for- 

2  Bates  v.  Callender,  3  Dak.  260,  16  feits  his  right  to  exemption.'' 

N.  W.  Rep.  506  ;  Bonsall  v.  Comly,  44  s  See  Rose  v.  Sharpless,  33  Gratt. 

Pa.   St.    442 ;   Russell  v.  Lennon,  39  (Va.)   156.      See  generally  Smith   v. 

Wis.   570;  Hawley  v.  Hampton,  160  Emerson,  43  Pa.  St.  456;  Gilleland  v. 

Pa.  St.  18,  28  Atl.  Rep.  471  ;  Gaylord  Rhoads,  34  Pa.  St.  187  ;  Diffenderferv. 

v.  Imhoff,  26  Ohio  St.  317  ;  Pond  v.  Fisher,  3  Grant's  Cases  (Pa.)  30  :  Piper 

Kimball,  101  Mass.  105.  v.  Johnston,  12  Minn.  67;  Chambers 

3  Brackett  v.  Watkins,  21  Wendell  v.  Sallie,  29  Ark.  407  ;  Huey's  Appeal, 
(N.  Y.)  68.  29  Pa.  St.  219  ;  Currier  v.  Sutherland, 

4  Strouse  v.  Becker,  38  Pa.  St.  192  ;  54  N.   H.  475,  20  Am.   Rep.  143,  and 
Imhoff 's  Appeal,  119  Pa.  St.  355.     In  note. 

Kreider's  Estate,  135  Pa.  St.  584,  the  6  Pratt  v.  Burr,  5  Biss.  36. 
court  says:  "  The  authorities  cited  by  'Cook  v.  Scott,  6  III.  335;  Cassell 
the  court  fully  sustain  the  position  v.  W7illiams,  12  111.  387  ;  Freeman  v. 
that  if  the  debtor  equivocates  and  Smith,  30  Pa.  St.  264;  Larkin  v.  Mr- 
dissembles,  denies  the  ownership  of  Annally,  5  Phil.  (Pa.)  17 ;  Carl  v. 
that  which  he  cannot  hide,  and  em-  Smith,  8  Phil.  (Pa.)  569. 


94  ABANDONED   EXEMPTIONS.  §§  50,   50a 

and  by  the  rule  of  construction  just  stated,  is  liable  to 
the  claims  of  creditors  much  the  same  as  though  it  had 
never  been  even  colorably  embraced  within  the  exemp- 
tions. 

§  50.  Abandoned  exemptions.  —  It  is  asserted  in  Crosby  v. 
Baker,1  that  if  the  debtor  changes  his  purpose  to  use  the 
exempt  articles  in  his  business,  and  determines  to  and 
does  in  fact  sell  them  to  a  third  person,  such  bargain 
being  made  to  defraud  creditors,  and  this  purpose  being 
participated  in  by  the  vendee,  the  conveyance  gives  no 
title  to  the  purchaser,  and  the  property  may  be  reclaimed 
and  held  by  the  assignee  of  the  insolvent  debtor  in  an 
action  against  the  purchaser.2  The  change  of  intention, 
it  is  argued,  takes  away  one  of  the  requisites  for  the 
exemption  of  the  property.  The  same  principle  applies 
to  abandoned  homesteads.3 

§  50a.  What  cannot  be  reached.— While  the  property  or 
accumulations  of  a  debtor  may  be  reached  by  his 
creditors,  this  is  not  trueof  his  talents  or  industry.1  Said 
Hunt,  C.  :5  "The  application  of  the  debtor's  property  is 
rigidly  directed  to  the  payment  of  his  debts.  He  cannot 
transport  it  to  another  country,  transfer  it  to  his  friend, 
or  conceal  it  from  his  creditor.  Any  or  all  of  these 
things  he  may  do  with  his  industry.  He  is  at  liberty  to 
transfer  his  person  to  a  foreign  land.  He  may  bury  his 
talent  in   the  earth,   or  he   may  give   it    to    his   wife0   or 

'6  Allen  (Mass.),  295.  Abbey   v.    Deyo,    M     X     V.    347; 

See  Stevenson  v.  White,   5  Allen  Eilers  v.  Conradt,  39  Minn.  243 ;  Knox 

(Mass.)  148.  v.  Fow,  91  Ga.  367,  IT  S.  E.  Rep.  654; 

»Cox   v.  Shropshire,  25  Texas,   113.  city  Bank  v.  Smisson,  73  Ga.  422. 
See  Edwards  v.  Eteid,  39  Neb.  645,  58  See     Voorhees  v.    Bonesteel,     16 

X.  \V.  Rep.  202;  Belden   v.  Younger,  Wall.  31  ;  Tresch   v.  Wirtz,  ;;i  X.   .1. 

76  Iowa,  567,  41  N.  W.  Rep.  317.  Eq.    L29 ;  Aldridge  v.    Muirhead,    101 

'Compare    Boggese   \    Richards,  39  U.  S.  399  ;    Wilson   v.    McMillan,   <'-j 

\V.  Va.  575;  Penn  v.    Whitehead,    1*3  Ga.  m  1  Osborne  v.  Wilkes.  108  X.  C. 

Gratt.  (Va.)527;Trapnellv.  Conklyn,  654,  13  S.  E.  Rep.  285. 
:;?  \V.  Va.  242,  16  S.  E.  Rep.  570. 


§  50b  PAYMENTS    MADE   TO   A   DEBTOR.  95 

friend.  No  law,  ancient  or  modern,  of  which  I  am  aware, 
has  ever  held  to  the  contrary."  l  In  Mayers  v.  Kaiser,- 
the  court  say  :  "  We  are  unable  to  understand  how  the 
husband's  creditors  can  be  said  to  be  defrauded,  when 
they  cannot  compel  him  to  labor  for  their  benefit,  if  he 
voluntarily  bestows  on  others,  or  on  his  wife,  that  which 
under  the  law  they  cannot  reach  for  the  satisfaction  of 
their  demands."  Justice  Bleckley  says  :  "While  a  debtor 
cannot  give  away  his  property  to  the  prejudice  of  his 
creditors,  he  may  give  away  his  labor." :?  And  a  debtor  who 
receives  the  title  of  property  for  the  specific  purpose  of 
conveying  it  to  another,  acquires  no  such  interest  in  it  as 
would  make  the  execution  of  the  trust  a  fraud  upon  his 
creditors.4  A  husband's  curtesy  initiate  in  his  wife's 
lands  cannot  be  sold  to  pay  his  debts.5 

g  50b.  Payments  made  to  a  debtor.  —  In  the  case  of 
Simpson  v.  Dall,6  it  was  declared  that  where  a  debt  was 
about  to  be  attached  by  a  creditor  of  the  person  to  whom 
it  was  due,  and  the  person  owing  the  debt  made  pay- 
ment and  settled  the  matter  in  full,  the  creditor  of  such 
creditor  could  not  compel  payment  by  such  debtor  over 
again  to  him,  though  it  might  be  inferred  that  a  settle- 
ment was  had  or  hastened  with  his  creditor,  the  effect  of 
which  was  to  prevent  an  attachment  being  levied  on  the 
debt  in  his  hands  issued  against  his  creditor. 


1  Compare  Lynn  v.   Smith.  35  Hun  ;  Wilson  v.  McMillan,  62  Ga.  16,  19. 

(N.  Y.)  275  ;  Ross  v.  Hardin.  79  N.  Y.  4  First  Nat.  Bk.  v.  Dwelley,  72  Me. 

90,  91  ;   Gage  v.    Dauchy,   34   N.    Y.  223. 

293  ;  Gillett  v.  Bate,  86  N.  Y.  94.     See  5  Welsh  v.  Solenherger,  85  Va.  441 . 

§303.     Buckley  v.  Dunn,  67  Miss.  710,  8  S.  E.  Rep.   91;  Breeding  v.    Davis, 

7  So.  Rep.  550  ;  Osborne  v.  Wilkes.  108  77  Va.  639  ;  Alexander  v.  Alexander, 

N.  C.  651, 13  S.  E.  Rep.  285  ;  Mayers  v.  85  Va.  353,  7  S.  E.  Rep.  335. 

Kaiser,  85  Wis.  382,  55  N.  W.  Rep.  688.  6  3  Wall.  460. 

8  85  Wis.  282,  396,  55  N.  W.  Rep.  688. 


CHAPTER  III. 


CREDITORS'  REMEDIES. 


§51.  Concurrent      remedies —  Legal 
and  equitable. 
52.  No    injunction     against    debtor 

before  judgment. 
53-  Certain  exceptional  cases. 

54.  Joinder  of  claims. 

55.  Uniting  causes  of  action. 

56.  Exclusive  jurisdiction  in  equity. 

57.  Land  purchased  in  name  of  third 

party. 

58.  Relief  before  and  after  sale. 

59.  The  remedy  at  law. 

60.  By  suit  in  equity. 

61.  Supplementary  proceedings. 

62.  Assumpsit  —  Case  —  Conspiracy. 
62a.  Reference  not  ordered. 


£  63.  Relief  collateral  to  main  action. 

64.  Remedy  governed  by  lex  fori. 

65.  Cumulative  remedies  —  Allowed 

and  disallowed. 

66.  Effect      of      imprisonment      of 

debtor. 

67.  Election  of  remedies. 

68.  Creditors'  bills. 

69.  Direct  and   collateral    attack  — 

Exceptional  doctrine  in  Louis- 
iana. 

70.  Forms  of  relief  in  cases  of  fraud 

on  wife. 

71.  Procedure  in  Federal  tribunals. 

72.  Recapitulation. 


§  51.  Concurrent  remedies  —  Legal  and  equitable.  — 
Equity  has  concurrent  jurisdiction  with  law  over  frauds 
under  the  statute  13  Eliz.  c.  5,  or  similar  enactments,1  and 
the  same  general  rules  of  construction  govern  in  both 
courts.2  Thus  it  was  remarked  by  the  Supreme  Court  of 
New  Jersey  :  "  Courts  of  law  and  courts  of  equity  have 


1  Orendorf  v.  Budlong,  12  Fed  Rep. 
24;  Potter  v.  Adams,  125  Mo.  118, 
126,  28  S.  W.  Rep.  490.  citing  the 
text :  Cox.  v.  Gruver,  40  N.  J.  Eq.  474, 
3  Atl.  Rep.  172;  Moore  v.  William- 
Mi,.  44  N.  J.  Eq.  496.  15  Atl.  Rep. 
587;  Smith  v.  Wood,  42  N.  J.  Eq. 
563,  7  Atl.  Rep.  881.  In  Potter  v. 
Adams,  125  Mo.  125,  the  court  say  : 
"If  that  deed  was  made  to  hinder, 
delay  or  defraud  the  creditors  of 
Thomas  Baine,  then  it  was  and  is  void 
at  law  as  well  as  in  equity,  and  such 


an  issue  ma}'  be  tried  in  an  action  of 
ejectment  as  well  as  in  a  suit  in  equ  it y 
to  set  aside  the  fraudulent  convey- 
ance." 

'-'  Sexton  v.  Wheaton,  1  Am.  Lea. 
Cas.  (5th  ed.)  58,  59,  note;  Hopkirk 
v.  Randolph,  2  Brock.  133.  The  con- 
tractual relation  of  debtor  and  cred- 
itor remains  unchanged  in  equity, 
and  the  creditor  is  entitled  to  prove 
his  full  claim  without  regard  to  col- 
laterals. People  v.  Remington,  121  N. 
Y.  328,  24  N.  E.  Rep.  793.     See  §  4. 


§  51  CONCURRENT   REMEDIES.  97 

concurrent  jurisdiction  over  frauds,  under  the  statute  con- 
cerning fraudulent  conveyances.  In  cases  where  the  legal 
title  to  the  property  is  such  that  it  cannot  be  seized  under 
execution,  resort  to  equity  is  necessary  —  as  where  the 
legal  title  has  never  been  in  the  debtor,  having  been  con- 
veyed by  a  third  person  directly  to  another,  in  secret  trust 
for  the  benefit  of  the  debtor,  with  a  design  fraudulently 
to  screen  it  from  his  creditors.1  But  where  the  lecal  title 
has  been  in  the  debtor,  so  as  to  be  subject  to  execution 
at  law,  and  might  be  made  available  for  the  satisfaction 
of  the  debt,  if  the  fraudulent  conveyance  had  not  been 
interposed,  the  creditor,  or  a  third  person  having  taken 
title  under  a  sheriff's  sale,  may  bring  ejectment,  and  avoid 
the  fraudulent  conveyance  by  proof  of  the  illegal  purpose 
for  which  it  was  made."2  It  will  be  seen  presently  that 
this  latter  illustration  is  not  of  universal  application.3 
The  forms  of  relief  available  to  creditors  are  outlined  in 
our  opening  chapter,4  where  it  is  shown  that  creditors 
may  invoke  the  aid  of  equity  in  two  cases,  after  proceed- 
ing to  judgment  and  execution  at  law,  without  obtaining 
satisfaction  of  the  debt.5  In  the  first  class  of  cases  the 
complainant  proceeds  simply  upon  the  ground  of  fraud, 
and  in  support  or  furtherance  of  the  remedy  at  law,  while 
in  the  other  class  of  cases  relief  is  sought  upon  the  theorv 
that  the  remedy  at  law  has  been  exhausted,  and  that  it  is 
inequitable  and  unjust  on  the  part  of  the  debtor  to  refuse 
to  apply  any  intangible  property  or  choses  in  action 
toward  the  payment  of  the  judgment.0     Resort  by  cred- 


1  See  §57.  Ch.   (Mich.)  28;  Cornell  v.  Radway, 

2  Mulfordv.  Peterson,  35  N.J.  Law,  22  Wis.    264;    Beck    v.    Burdett,    1 

133.     See  Cox  v.  Graver,  40  N.  J.  Eq.  Paige  (N.  Y.)  305  ,  Jones  v.  Green,  1 

474,  3  Atl.  Rep.  172.  Wall.  331. 

3  See^  69.  6  Williams    v.   Hubbard,    Walker's 

4  See  §  4.  Ch.  (Mich.)  29. 

5  Williams   v.     Hubbard,     Walker's 


98  CONCURRENT   REMEDIES.  §  5  I 

itors  to  courts  of  equity  is  of  very  frequent  occurrence 
because  the  common-law  is  not  sufficiently  flexible.1  Of 
necessity,  in  a  common-law  action,  a  purchase  is  treated 
as  either  valid  or  void.2  There  is  no  middle  ground.3 
Proof  of  absolute  fraud,  which  is  usually  difficult,  is,  for 
that  reason,  generally  required  at  law,  while  in  equity  it 
is  said  that  an  unfair  or  inequitable  transaction  —  one 
not  of  necessity  absolutely  fraudulent  in  the  full  sense  of 
that  term  —  may  be  unraveled  in  the  interest  of  cred- 
itors.4 In  such  cases  the  rights  of  an  innocent  vendee 
can  be  preserved  and  protected  by  the  plastic  hand  of 
equity.  In  other  words,  certain  cases  seem  to  imply  that 
proof  of  fraud  need  not  be  so  complete  in  equity  as  at 
law  ;5  but  it  is  not  so  easy  to  illustrate  the  distinction  or 
to  state  clearly  a  substantial  justification  for  its  existence.6 
Mr.  Abbott  observes  in  an  editorial  in  the  New  York 
Daily  Register  .• 7  "  In  the  quaint  language  of  Westmin- 
ster Hall,  '  legal  fraud '  means  illegal  fraud,  that  is  to  say, 
fraud  for  which  an  action  at  law  lay  to  recover  damages. 
So  'equitable  fraud'  means  inequitable  conduct,  not  illegal 
in  the  sense  of  sustaining  an  action  for  damages,  but  yet 


1  In  Mississippi  Mills  v.  Colin,  150  in  equity  a  more  extensive  significa- 
U.  S.  207,  14  S.  C.  Rep.  75,  the  court  tion  than  at  law,  and,  as  charged 
say  :  "  A  court  of  equity  will  aid  a  here,  involved  the  consideration  of 
judgment-creditor  to  reach  the  prop-  the  principles  applicable  to  fiduciary 
erty  of  his  debtor  by  removing  fraud-  and  trust  relations  between  the  parties 
ulent  judgments,  or  conveyances  or  throughout  the  period  of  their  con- 
transfers  which  defeat  his  legal  rem-  nection,  we  concur  with  the  Supreme 
edy  at  law."  Citing  2  Beach  on  Mod-  Court  of  the  District  in  sustaining  the 
ern  Eq.  Jur.  £  883.  jurisdiction." 

8  See  Chap.  XIII.  Warner  v.    Daniels,    1   Woodb.   & 

-See  §193.    Foster  v.  Foster,  56  Vt.  M.   103:   Fullagar  v.  Clark,   18    Ves. 

540.  483;  Earl  of  Chesterfield  v.  Janssen, 

'Sec  Eilbourn   v.  Sunderland,  130  2  Ves.  Sen.  143  ;  Kilbourn  v.  Sunder- 

U.  S.  515,  9  S.  C.  Rep.  594,  where  the  land,  130  IT.  S.  515,  9  S.  C.  Rep.  594. 

court  say  :     "  As  the  remedy  at  law  See  ~  (in. 

in  the  case  in  hand  was  rendered  em-  6  See  Marksbury  v.  Taylor,  10 Bush, 

barrassed  and  doubtful  by  the  con-  (Ky.)519. 

duct  of  the  defendants,  and  fraud  has  '  Nov.  15,  1888. 


§   51  CONCURRENT    REMEDIES.  99 

so  like  it  in   effect   that    the    Chancellor  would    give   a 
remedy."  * 

Though  in  some  States  legal  and  equitable  jurisdictions 
have  been  united  in  the  same  tribunals,  yet  the  distinc- 
tions which  formerly  appertained  in  the  forms  of  action, 
of  pleading,  and  of  relief,  are  by  no  means  superseded 
or  obliterated.  In  territory  where  the  system  of  common 
law  and  chancery  both  prevail,  and  the  only  adequate 
relief  is  in  equity,  and  the  pleadings  are  framed  in  accord- 
ance with  this  view,  the  suit  must  be  tried  as  a  chancery 
case  by  the  modes  of  procedure  known  to  courts  of 
equity.  The  judge  or  chancellor  is  responsible  for  the 
decision,  and,  though  he  may,  by  means  of  feigned  issues, 
refer  any  questions  of  fact  to  a  jury,3  still  his  own  con- 
science must  be  satisfied  that  the  finding  is  correct,  and 
the  decree  must  be  rendered  as  the  result  of  his  indi- 
vidual judgment,  aided,  it  may  be  true,  by  the  finding  of 
the  jury.  Hence,  where  the  trial  in  such  a  case  is  con- 
ducted as  though  it  were  a  controversy  in  a  common-law 
action,  and  a  judgment  is  rendered  upon  a  verdict  as  at  com- 
mon law,  it  will  be  reversed  for  error.3  In  an  equitable 
proceeding  of  this  character,  as  will  presently  be  shown, 
a  decree  in  the  nature  of  a  judgment  for  damages  cannot 


1  In  United  States  v.  Union  Pacific  that  the  remedy  at  law  was  not  as 

Railway,  160  U.  S.  51,  the  court  re-  effectual  as   in  equity,  said,   among 

mark:      "In   Boyce    v.    Grundy,    3  other  things,  that  a  ' direct  proceed- 

Peters  210,  215,  this  court  said  :     '  It  ing  in  equity  will  save  time,  expense, 

is  not  enough  that  there  is  a  remedy  and  a  multiplicity  of  suits,  and  settle 

at  law  ;  it  must  be  plain  and  adequate,  finally  the  rights  of  all  concerned  in 

or,  in  other  words,  as   practical  and  one  litigation.' " 

efficient  to  the  ends  of  justice  and  its  -  See  Wright  v.   Nostrand,  94  X.  Y. 

prompt  administration  as  the  remedy  31  ;  Coleman  v.  Dixon,  50  N.  Y.   572. 

in    equity.'      The    circumstances    of  3Dunphy   v.  Kleinsmith,   11   Wall. 

each  case  must  determine  the  applica-  615.     In  an  equity  suit  to  set  aside  a 

tion  of  the  rule.     Watson  v.  Suther-  fraudulent  transfer  the  defendant   is 

land,  5  Wall.  74,  79.     In  Oelrichs  v.  not  entitled  to  a  jury  trial,    but   the 

Spain,  15  Wall.  211,  228,  an  objection  court    may   in   its    discretion   frame 

was  raised  that  the  remedy  at  law  issues  to    be    tried    before    a    jury. 

was    ample.      The    court,    observing  Wright  v.  Nostrand,  94  N.  Y.  31. 


IOO  NO    INJUNCTION   BEFORE   JUDGMENT.  §  52 

be  rendered  against  the  defendant  who  is  alleged  to  have 
fraudulently  taken  an  assignment  of  the  insolvent's  prop- 
erty. The  decree  must  be  for  an  accounting  as  to  the 
property  which  has  come  into  the  hands  of  the  fraudulent 
vendee.1  Where  property  which  is  legally  liable  to  be 
taken  in  execution  has  been  fraudulently  conveyed  or  en- 
cumbered, the  jurisdiction  is  usually  concurrent,  as  the 
creditor  may  either  issue  an  execution  at  law  and  sell  the 
property,  or  file  a  bill  in  equity  to  have  the  conveyance 
set  aside.2  The  remedy  in  equity,  as  will  presently 
appear,3  is  necessarily  exclusive  in  cases  where  the  sub- 
ject-matter of  contention  is  not  subject  to  execution. 

§  52.  No  injunction  against  debtor  before  judgment.  —  As  a 
general  rule,  a  simple  contract  creditor  who  has  no  lien  on 
the  property,  cannot  enjoin  his  debtor  from  selling  it,  nor 
will  he  be  allowed  to  come  into  equity  to  invoke  its  inter- 
ference to  preserve  the  property  until  a  judgment  can  be 
obtained.4  If  the  property  of  an  honest  struggling 
debtor  could  be  tied  up  by  injunction  upon  mere  unad- 
justed legal  demands,  he  might  be  constantly  exposed 
to  the  greatest  hardships   and  grossest  frauds,  for  which 


■See  §§  176-179.  Cates  v.  Allen,  149  U.  S.  451,  13  S.  ( '. 

*Seenoteto  Sexton  v.  Wheaton,  1  Rep.  883,  977;    Dortic   v.    Dugas,  52 

Am.  Lea.  Cas.  (5th  ed.)  58,   59;  Bisp-  Ga.   231  ;     Buchanan    v.    Marsh,    IT 

ham's    Equity,  £242;  Blenkinsopp  v.  Iowa,  494;  Rich  v.  Levy,  16  Md.  74: 

Blenkinsopp,  1   De.  G.,  M.  &  G.  500  ;  Phelps  v.  Foster,  18  111.  309  ;  Brooksv. 

Partee   v.    Mathews,    53    Miss.     146;  Stone,  19How.  Pr.  (N.  Y.)  395  ;  Uhl  v. 

Sheafe  v.  Sheafe,  40  N.  H.  516  ;  Scott  Dillon.  10  Md.  4()0  ;  Hubbard  v.  Hub- 

v.  Indianapolis  Wagon  Works,  48  Ind.  hard.  14  Md.  356;    National  Trades- 

75;  Gallman  v.  Perrie,  47  Miss.   131,  men's  B'k  v.  Wetmore,  124  N.Y.  241. 

140;  Barto's  Appeal,  55  Pa.  St.  886  ;  Compare  Case  v.  Beauregard,  99  U.  S. 

Tupper  v.  Thompson,  2G  Minn.  386;  125;  Locke  v.  Lewis,  124  Mass.  1.     See 

Henry  v.  Einman,  25  Minn.  199.  £73.     Nor  can  a  creditor  having  pos- 

8See  .'  56.  session  of  the  debtor's  property,  with- 

4  Peyton  v.  Lamar.  42  Ga.  134 
(uhbedge  v.  Adams  42  Ga  124 
Oberholser  v.  Greenfield,  47  Ga.  530 

Shufeldt  v.  Boehm,  96  111.  560  ;   Moran  the  debt.     Xenia    Bank    v.   Stewart, 

v.  Dawes,  1   Hopk.  Ch.  (N.  Y.)  365;  114  U.S.  224,  5  S.  C.  Rep.  845. 


out  judicial   process  and  against  the 
debtor's   will,   sell  the   property  and 

apply  its  proceeds  to  the  payment  of 


§52  NO    INJUNCTION    BEFORE   JUDGMENT.  IOI 

the  law  would  afford  no  adequate  remedy.  It  would 
deprive  him  of  the  means  of  payment,  or  of  defending 
himself  against  vexatious  litigation,  and  force  him  into 
unconscionable  compromises  to  prevent  the  ruin  of  his 
business  pending  the  controversy.1  An  injunction  ought 
not  to  issue  to  compel  parties  to  hold  goods  pending  a 
trial  at  law,  with  the  expectation  that  they  may  be  wanted 
to  answer  an  execution  upon  a  judgment  which  the  cred- 
itor hopes  to  obtain.2  "  The  authorities  are  clear,"  says 
the  learned  and  lamented  Mr.  Justice  Campbell,3  "  that 
chancery  will  not  interfere  to  prevent  an  insolvent  from 
alienating  his  property  to  avoid  an  existing  or  prospective 
debt,  even  when  there  is  a  suit  pending  to  establish  it." 
"  The  reason  of  the  rule,"  says  Chancellor  Kent,  "  seems 
to  be  that  until  the  creditor  has  established  his  title  he 
has  no  right  to  interfere,  and  it  would  lead  to  an  unneces- 
sary and,  perhaps,  a  fruitless  and  oppressive  interruption 
of  the  exercise  of  the  debtor's  rights.  Unless  he  has  a 
certain  claim  upon  the  property  of  the  debtor,  he  has  no 
concern  with  his  frauds"4      So  the  simple  contract  cred- 


1  Shufeldt  v.  Boelim,  96  111.  560.  lecting  debts  clue  to   him,    with   the 

2  Phelps  v.  Foster,  18  111.  309;  Hea-  intention  to  defraud  creditors  and 
cock  v.  Durand,  42  111.  230  ;  Horner  abscond.  An  injunction  was  allowed 
v.  Zimmerman,  45  111.  14.  and  a  receiver  appointed.     Theappel- 

3  Adler  v.  Fenton,  24  How.  411;  late  court  in  reversing  the  decree  and 
see  Findlay  v.  McAllister,  113  U.  S.  dismissing  the  bill,  said  (p.  503): 
114,  5  S.  C.  Rep.  401.  "  The  bill  filed  by  the  appellees  in 

4  Wiggins  v.  Armstrong,  2  Johns.  this  cause,  states  no  sufficient  case 
Ch.  (N.  Y.)  145,  and  the  able  opinion  entitling  them  to  the  relief  prayed, 
of  Chancellor  Kent.  Gates  v.  Allen,  No  authority  lias  been  shown  to  this 
149  U.  S.  458,  13  S.  C.  Rep.  883,  977 ;  court,  nor  can  any  be  produced  enti- 
Smith  v.  Railroad  Co.,  99  U.  S.  398  ;  tied  to  consideration,  which  sanctions 
Artman  v.  Giles,  155  Pa.  St.  415,  26  the  exercise  of  the  high  and  extra- 
Atl.  Rep.  668.  Uhl  v.  Dillon,  10  Md.  ordinary  power  of  a  court  of  clian- 
500,  was  a  bill  for  an  injunction  and  eery,  to  interpose,  by  writ  of  injunc- 
receiver  filed  by  a  simple  contract  tion,  in  a  case  like  the  one  before  us, 
creditor,  charging  that  the  defendant  restraining  a  debtor  in  the  enjoymenl 
was  deeply  in  debt ;  that  he  was  dis-  and  power  of  disposition  of  his  prop- 
posing  of  his  stock  ;  had  already  par-  erty.  The  appellees  (the  complain 
ted  with  his  real  estate  ;  and  was  col-  ants  below)  are  merely  general  cred- 


102 


CERTAIN    EXCEPTK  »NAL   CASES. 


§  53 


itors  of  a  firm  ordinarily  have  no  specific  lien  upon  the 
firm  property  which  will  enable  them  to  interfere  with  any 
disposition  which  the  firm  ma)-  make  of  it.1  And  a  wife 
having  no  judgment  cannot  restrain  her  husband's  vendee 
from  taking  possession  of  real  estate  upon  the  ground 
that  the  transfer  was  in  fraud  of  her  right  of  support,  and 
deprived  her  of  the  right  to  attach  the  land  in  a  suit  for 
divorce  and  alimony.2 

§53.  Certain  exceptional  cases. —Occasional  exceptions 
may  be  found  in  some  States  to  the  rule  that  equity  will 
not  interfere  at  the  instance  of  a  simple  contract  creditor. 
But  the  exceptions  prove  the  force  of  the  rule.  In  Moore 
v.  Kidder,3  the  bill  distinctly  charged  a  fraudulent  inten- 
tion on  the  part  of  a  debtor  summoned  as  trustee,  and 
an  attempt  to  dispose  of  his  property,  and  put  it  beyond 
the  reach  of  creditors,  for  the  purpose  of  defeating  the 
plaintiffs  in  the  collection  of  any  judgment  that  might  be 
obtained  in  a  suit  at  law,  and  asked  for  an  injunction  to 


itors  of  the  appellant,  who  have  nut 
prosecuted  their  claim  to  judgment 
and  execution,  nor  in  any  other  man- 
hit  acquired  a  lien  upon  the  debtor's 
property,  ami  were  not  entitled  to  the 
writ  of  injunction  nor  to  the  appoint- 
ment of  a  receiver.  Whatever  may 
be  the  supposed  defects  of  the  exist- 
ing laws  of  the  State,  in  leaving  to 
the  debtor  the  absolute  power  of  dis- 
posing  of  his  property,  and  leaving 
the  creditor  to  the  slow  and  veryin- 
adequate  Legal  remedies  now  pro- 
vided, if  such  defects  exist,  it  is  solely 
in  tin  power  of  the  legislature  to  cor- 
rect them.  It  is  not  within  the  prov- 
ince of  the  chancery  courts  to  stretch 
their  power  beyond  the  Limits  of  the 
.-iiit  uorities  of  the  law,  for  the  purpose 
of  remedying  such  defects.  Such  a 
course  would  in-  productive  of  greal 
mischief,  ami  make  the  rights  of  tlie 


citizen  depend  upon  the  vague  and 
uncertain  discretion  of  the  judges, 
instead  of  the  safe  and  well-defined 
rules  of  law." 

1  Wilcox  v.  Kellogg,  11  Ohio.  394  ; 
Gwin  v.  Selby,  5  Ohio  St.  97;  Sigler 
v.  Knox  County  Bank,  8  Ohio  St.  511 ; 
Potts  v.  Blackwell,  4  Jones"  Eq.  (N. 
I  58;  Field  v.  Chapman,  15  Abb.  Pr. 
(N.  Y,)  434  ;  State  v.  Thomas,  7  Mo 
App.  205;  Shackelford  v.  Shackel 
lord.  32  Gratt.  (Va  )  481;  Allen  v. 
Center  Valley  Co.,  21  Conn.  130; 
Schmidlapp  v.  Currie,  55  Miss.  507 : 
Reeves  v.  Ayers,  38  111.  418 ;  Mayer  v. 
Clark,  40  Ala.  259  ;  see  Case  v.  Beau- 
regard,  99  (J.  S.  125. 

2  Ullrich  v.  Ullrich,  G8  Conn.  580. 

3  55  N.  II.  491.  See  People  ex  rel. 
Cmil'man  v.  Van  Buren,  136  N.  Y. 
261,  32  N.  E.  Rep.  775. 


§53  CERTAIN    EXCEPTIONAL  CASES.  103 

prevent  that  mischief  and  wrong.  The  court  said  that 
the  bill  very  clearly  showed  a  case  for  equitable  interfer- 
ence, in  aid  of  the  remedy  at  law,  and  that  without  such 
relief  the  suit  at  law  would  be  rendered  fruitless  by  the 
active  fraud  of  the  defendant.1  Clearly  this  would  be  a 
proper  case  for  the  issuance  of  an  attachment  or  other 
suitable  provisional  relief  in  the  action  at  law.  In  an- 
other case  where  a  bill  charged  insolvency  in  the  debtor, 
and  averred  that  he  had  fraudulently  transferred  his  goods 
to  a  third  person,  who  was  implicated  in  the  fraud,  and 
that  the  debtor  had  purchased  the  goods  with  intent  to 
defraud  the  plaintiffs,  a  receivership  was  allowed  before 
judgment.2  Here  the  relief  was  extended  upon  the  the- 
ory that  the  goods  for  which  the  indebtedness  was  cre- 
ated were  fraudulently  obtained,  and  that  the  debtor 
never  acquired  title  to  them.  This  would  seem  to  be 
substantially  substituting  a  bill  in  equity  for  the  relief 
usually  incident  to  replevin.  An  equitable  action  in  the 
nature  of  a  creditor's  bill  for  an  injunction,  may  be 
brought  in  aid  of  a  lien  by  attachment  before  the  recov- 
ery of  judgment  in  the  attachment  action  where  there  is 
danger  that  the  property  may  be  removed  from  the  juris- 
diction of  the  court.3  The  court  in  People  ex  rel.  Cauff- 
man  v.  Van  Buren4  claim  that  there  is  no  conflict  be- 
tween Thurber  v.  Blanck5  and  Mechanics' and  Traders' 
Bank  v.  Dakin.6  But  as  will  presently  appear,7  People 
ex  rel.  Cauffman  v.  Van  Buren8  has  been  in  a  measure 


1  Compare  Bowen  v.  Hoskins,  45  775.  Compare  Burtis  v.  Dickinson, 
Miss.  183;  Cottrell  v.  Moody,  12  B.  81  Hun  (N.  Y.)  345,  30  N.  Y.  Supp. 
Mon.  (Ky.)  502;  Thompson  v.  Diffen-  886. 

derfer,  1  Md.  Ch.  489.  4  136  N.  Y.  252,  259,  32  N.  E.  Rep. 

2  Cohen  v.  Meyers,  42  Ga.  46.    Com-  775. 

pare  Hyde  v.  Ellery,  18  Md.  500  ;  Ro-  6  50  N,  YT.  80. 

senberg  v.  Moore,  11  Md.   376  ;  Hag-  6  51  N.  Y.  519. 

garty  v.  Pittman,  1  Paige  (N.  Y.)  298.  '  See  §  81. 

3  People  ex  rel.   Cauffman  v.  Van  8  136  N.  Y.  252,  32  N.  E.  Rep.  775. 
Buren,  136  N.  Y.  252,  32  N.  E.  Rep. 


104  JOINDER    OF    CLAIMS.  §  54 

limited  by  the  more  recent  case  of  Whitney  v  Davis.1 
Where  goods  are  sold  on  credit,  but  such  credit  has  been 
obtained  by  false  representations  and  concealment  of 
insolvency,  such  as  would  entitle  the  vendor  to  rescind, 
he  is  not  considered  as  being  an  ordinary  creditor,  but  he 
may  disaffirm  and  obtain  an  injunction  against  the  dis- 
posal of  the  goods."-'  Creditors  will,  as  a  rule,  find  these 
exceptional  cases  not  easy  to  support. 

^  54.  Joinder  of  claims. — The  assets  of  the  fraudulent 
debtor  are,  as  a  rule,  scattered  among  different  friends,  in 
different  forms,  and  by  transactions  had  at  different 
times.  This  requires  some  notice  of  the  authorities  as  to 
uniting  or  joining  claims.  In  cases  where  the  sole  object 
of  the  bill  is  to  secure  satisfaction  of  a  judgment  out  of 
property  fraudulently  alienated,  the  suit  may  be  framed 
to  avoid  several  distinct  conveyances  made  to  as  many 
grantees.  Such  a  bill  is  said  to  embody  a  single  cause 
of  action.3  This  principle  applies  although  the  defend- 
ants may  have  separate  and  distinct  defenses.4  In  Lattin 
v.  McCarty,5  it  was  decided  that  an  equitable  cause  of 
action  to  cancel  and  remove,  as  a  cloud  upon  plaintiff's 
title,  a  deed  given  by  mistake  by  a  third  party  to  the 
defendant,  under  which  the  latter  had  fraudulently 
obtained  possession,  could  be  united  with  a  claim  to 
recover  possession  of  the  premises,  and  asserted  in  the 
same  complaint.     The  principle  of  this  case  was  expressly 


'  148  X.  V.  261,  42  N.  E.  Rep.  661.  v.  Tucker.  29  Mo.  850  ;  Snodgrass  v. 

1  Fecbheimer  v.  Baum,  87 Fed. Rep.  Andrews,     ::o    Miss.    472:    Reed    v. 

167;  cf.  England  v.  Adams,  157  Mass.  Stryker,  4Abb.  App.  Dec.  (N.  Y.)26; 

449,  32  N.  E.  Rep.  665;  Donaldson  v.  Dimmock  v.   Bixby,  20  Pick.  (Mass.) 

Farwell,   93   U.   S.   633 ;    Stewart   v.  368. 

Emerson,  52  N.  B.  301.  4  Donovan    v.  Dunning.  69  Mo.  436. 

'Trego   v.   Skinner,    42    M«!.   432;  Ml    N.    Y.     107;    Stock    Growers' 

Nortb  v.Broadway, 9 Minn.  183; Chase      Bank  v.  New! 13  Col.  247,  22  Pac. 

\.   Searles,    16   N.    II.    51 1  ;  Jacot   v.  Rep.  444. 
Boyle,  is  How.  Pr.(N.  Y.)  106; Tucker 


§55  UNITING   CAUSES   OF   ACTION.  105 

repudiated  in  Missouri  in  an  action  involving  substan- 
tially the  same  state  of  facts,  on  the  theory  that  a  bill  in 
equity  was  not  a  proper  form  of  action  for  the  recovery 
of  the  possession  of  real  estate,  there  being  an  adequate 
remedy  at  law.1  But  this  latter  reason  does  not  com- 
mend itself  as  necessarily  conclusive.  Fraudulent  con- 
fessions of  judgments  entered  in  different  courts  may  be 
attacked  in  one  suit.3  So  a  partner  may  sue  his  copart- 
ners for  an  accounting,  and  may  join  in  the  same  action 
alienees  of  his  copartners,  to  whom  the  latter  have  collu- 
sively  transferred  partnership  assets  in  fraud  of  the  part- 
nership, and  seek  a  cancellation  of  the  transfer  as  well  as 
an  accounting.  "  Why,"  it  has  been  said,  "  should  not  all 
this  be  embraced  in  one  action  ?  The  object  is  single, 
viz.  :  To  bring  about  a  complete  and  final  settlement  of 
the  partnership."  3 

§  55.  Uniting  causes  of  action. —  Questions  relating  to 
the  joinder  of  causes  of  action  of  necessity  frequently 
arise  for  adjudication  in  contests  of  the  class  under 
consideration,  where  debtors  have  sought  to  conceal 
property  by  different  subterfuges.  In  Palen  v.  Bushnell,4 
the  plaintiff,  as  receiver  in  supplementary  proceedings, 
instituted  an  action  against  the  debtor  and  a  third  party, 
([).  To  recover  moneys  usuriously  exacted  by  the  third 
party  from  the  debtor  ;  (2).  To  compel  the  third  party  to 
account  for  securities  belonging  to  the  debtor ;  and 
(3).  To  set  aside  as  fraudulent  certain  transfers  of  real 
and  personal  property  alleged  to  have  been  made  by  the 
debtor  to  the  third  party.      The  court  observed  :  "  What 


1  Peyton  v.  Rose,  41  Mo.  257  ;  Curd  solvent  railroad  corporation  maj  in 
v.  Lackland,  43  Mo.  140.  Ohio  join  in  the  same  action  a  claim 

2  Uhlfelder  v.  Levy,  9  Cal.  607.  to  compel    payment  of   unpaid   sul>- 

3  Compare,  upon  this  general  sub-  scriptions  and  a  claim  to  enforce  the 
ject,  Webb  v.  Helion,  3  Rob.  (N.  Y.)  individual  liability  of  stockholders. 
625  ;  Wade  v.  Rusher,  4  Bosw.  (N.  Y.)  Warner  v.  Callender,  20  Ohio  St.  190. 
537.     A  judgment-creditor  of  an  in-  4  46  Barb.  (N.  Y.)  25. 


106  EXCLUSIVE   JURISDICTION   IN   EQUITY.  §  56 

is  the  subject  of  the  action  in  this  case  ?  It  is  the  restitu- 
tion of  the  property  of  the  judgment-debtor  whom  the 
plaintiff  represents.  To  entitle  himself  to  this  relief,  the 
plaintiff  avers  in  his  complaint  different  transactions  out 
of  which  his  right  to  restitution  flows."  i  This  statement 
is  criticised  by  Mr.  Pomeroy,2  as  follows  :  "  There  is  here 
a  plain  confusion  of  ideas.  The  restitution  of  the  debtor's 
property,  which  is  the  relief  demanded,  is  the  object  of  the 
action.  If  there  is  anything  connected  with  this  matter 
clear,  it  is  that  the  authors  of  the  code  used  the  terms 
'subject  of  action'  and  'object  of  the  action'  to  describe 
different  and  distinct  facts."  The  criticism  upon  the 
particular  language  employed  in  this  case  has  some  foun- 
dation, but  we  cannot  suppress  the  conviction  that  a  sys- 
tem of  procedure  which  prohibited  the  joinder  of  claims, 
such  as  those  specified  in  a  single  action,  would  furnish 
most  unsatisfactory  and  inadequate  redress  to  creditors. 

^56.  Exclusive  jurisdiction  in  equity.— The  subjects  of 
fraud  and  trusts  are  peculiarly  matters  of  equity  jurisdic- 
tion.3 Manifestly  in  cases  where  property  is  of  such 
nature  that  it  never  was  subject  to  execution  at  law,  the 
remedy  of  creditors  desiring  to  reach  it,  as  we  have 
observed,  is  exclusively  in  chancery.4  Thus,  as  has 
already  been  shown,5  it  was  observed  by  Chief-  ustice 
Gray,  in  delivering  the  opinion  of  the  Supreme  Court  of 
Massachusetts,  in   Drake  v.  Rice,0   that,  "by   the  law  of 


1  A  cause  of  action  against  one  for  :;  National  Tradesmen's  B'k  v.  Wet- 

fraudulently  pnnuring  a  conveyance  more,  124  X.  Y.  241. 

of    property  from   a  decedent  in  his  4SeeWeed  v.  Pierce,  9  Cow  (N.  Y.) 

life-time  cannot  be  joined  with  a  cause  722:  Sexton  v.  Wheaton,  I   Am.  Lea. 

of  action  against  another  for  fraudu-  Cas.  (5th  ed.)  59  ;  Drake  v.  Rice,  130 

\<  nth  procuring  the  making  of  a  will  Mass.  412  ;  Abbott  v.   Tenney,    18  N. 

cutting  oil  the  plaintiff.     Heath   v.  H.  109 ;  Sargent  v.  Salmond,  27  Me. 

Heath,  18  Misc.  (N.  Y.)  521.  539. 

Remedies   and   Remedial   Rights,  BSee§  L7. 

§  470.  1  180  .Mass.  112.     See  Bragg  v.  Gay- 

nor,  85  Wis.  4G8,  55  N.  VV.    Rep.  919. 


57 


PURCHASES    IX    NAME    OF   THIRD    PARTY. 


107 


England    before    the    American    Revolution,     . 
fraudulent  conveyances  of  choses  in  action,  though  not 
specified  in  the  statute,  were  equally  void,  but  from   the 
nature  of  the  subject,  the  remedy  of  the  creditor  must 
be  sought  in  equity."1 

§57.  Land  purchased  in  name  of  third  party. — The 
creditor  may  encounter  a  practical  difficulty  in  reaching 
realty  paid  for  by  the  debtor,  the  title  to  which  is  fraudu- 
lently taken  in  the  name  of  a  third  party.  This  is  a  very 
common  device.  The  courts  are  somewhat  at  variance 
upon  the  question  as  to  whether  or  not  real  estate  so  held 
can  be  sold  on  execution  against  the  debtor,  and  recovered 
by  the  purchaser  in  ejectment,  or,  in  fact,  whether  it  can 
be  reached  by  any  proceedings  at  law.  Authorities  can 
be  cited  to  the  effect  that  an  execution  sale  of  land,  the 
title  to  which  is  held  in  this  manner,  passes  nothing  to 
the  purchaser  ; 2  the  creditor's  proper  remedy  to  reach  it 


'Citing  Taylor  v.  Jones  (1743),  2 
Atk.  600  ;  King  v.  Dupine  (1744),  2 
Atk.  603,  note  ;  Horn  v.  Horn  (1749), 
Ainbl.  79;  Ryall  v.  Rolle  (1749),  1 
Atk.  165,  1  Ves.  Sr.  348  ;  Partridge  v. 
Gopp  (1758),  1  Eden,  163,  Ambl.  596  ; 
Bayard  v.  Hoffman,  4  Johns.  Ch.  (N. 
Y.)  450  ;  Hadden  v.  Spader,  20  Johns. 
(N.  Y.)  554  ;  Abbott  v.  Tenney,  18  N. 
H.  109  ;  Sargent  v.  Salmond,  27  Me. 
539.     See  §§  17,  33. 

2  Mulford  v.  Peterson,  35  N.  J.  Law, 
133  ;  Haggerty  v.  Nixon,  26  N.  J.  Eq. 
42  ;  Garfield  v.  Hatrnaker,  15  N.  Y. 
475;  Dewey  v.  Long,  25  Vt.  564; 
Davis  v.  McKinney,  5  Ala.  719  ;  Web- 
ster v.  Folsom,  58  Me.  230  ;  Low  v. 
Marco,  53  Me.  45  ;  Jimmerson  v.  Dun- 
can, 3  Jones  (N.  C.)  Law,  537  ;  Carlisle 
v.  Tindall,  49  Miss.  229;  Howe  v. 
Bishop,  3  Met.  (Mass.)  26.  See  Hamil- 
ton, v.  Cone,  99  Mass.  478.  In  Niver 
v.  Crane,  98  N.  Y.  40,  it  was  decided 
that  the  fact  that  the  debtor  paid  the 


consideration  for  property  conveyed 
to  another  did  not  alone  authorize 
a  judgment  taking  the  property  to 
satisfy  the  debt.  Under  the  provision 
of  the  statute  of  uses  and  trusts  (1  R. 
S.  728,  £§  51,  52),  which  declares  that 
a  grant  made  to  one  person,  the  con- 
sideration for  which  is  paid  by 
another,  shall  be  presumed  fraudu- 
lent as  against  the  creditors  at  that 
time  of  the  person  paying  the  con- 
sideration, and  where  fraudulent  in- 
tent is  not  disproved,  a  trust  shall  re- 
sult in  favor  of  such  creditors,  to 
make  out  such  a  trust  the  considera- 
tion must  be  paid  at  or  before  the 
execution  of  the  conveyance.  See 
Decker  v.  Decker,  108  N.  Y.  128. 
Such  trust  is  exclusively  in  favor  of 
creditors;  the  heirs  al  law  cannot  en- 
force it.  Robertson  v.  Sayre,  i.34  V 
Y.  97,  31  N.  E.  Rep.  050  ;  Miner  v. 
Lane,  87  Wis.  348.  57  N.  W.  Rep.  1105. 


108  RELIEF    BEFORE    AND    AFTER   SALE.  §58 

is  declared  to  be  by  bill  in  equity  ;  '  the  grantee  is 
considered  to  hold  the  title  impressed  with  a  trust  in 
favor  of  creditors, ~  and  may  be  compelled  to  quit-claim 
his  interest.3  The  principle  embodied  in  these  authori- 
ties seems  to  commend  itself  as  logical,  but  it  is  not  uni- 
versally recognized.  There  are  cases  holding  that  an 
execution  purchaser  on  a  judgment  against  the  debtor 
may  recover  the  lands  in  ejectment,  even  though  the 
title  was  never  in  the  debtor,  if  it  is  shown  that  the 
fraudulent  grantee  held  it  for  the  debtor's  benefit,4  and 
that  such  an  interest  may  be  attached.5  It  may  be 
observed  that  a  purchase  of  personal  property  by  a 
debtor  in  the  name  of  a  third  party  does  not  exempt  it 
from  direct  seizure  by  creditors.6 

§  58.  Relief  before  and  after  sale.  —  The  jurisdiction  of  a 
court  of  equity  is  ample  either  before  or  after  sale  under 
a  judgment,  to  set  aside  a  deed  made  in  fraud  of  cred- 
itors—  before  sale  to  enable  the  creditor  to  present  and 
sell  an  unembarrassed  title  ;  after  sale  to  remove  clouds 
from  the  title."  It  will  thus  be  seen  how  important  the 
jurisdiction  of  equity  becomes   in  connection  with  fraudu- 


1  Mul ford    v.    Peterson,     35    N.    J.  sucli  a  case?    See  Ocean  Nat.  Bank  v. 

Law,  L33.  Olcott,  46  N.  Y.  22.    See  infra.  Chap. 

^Garfield   v.    Hatmaker,   15  N.   Y.  IV. 
475;  Corey    v.   Greene,   51   Me.    114;  'Kimmel  v.  McRight,  2  Pa.  St.  38  '< 
Simmons   v.    Ingram,    60   Miss.    900.  Tevis  v.  Doe,  3  Ind.    129;  Pennington 
Such   fcrusl   exists  in  favor  of  all  the  v.   Clifton,    II    Ind.    1U2 ;  Guthrie   v. 
creditors  of  the  person  who  pay e  the  Gardner,  L9Wend.(N.  Y.)  414;  Brew- 
consideration;    one  creditor    cannol  ster  v.   Power,  10   Paige  (N.  Y.)  569; 
acquire  a  preference  by  taking   pro-  Garfield  v.  Hatmaker,  15  X.  Y.  477. 
ceedinga  in   equity.     Minn-  v.   Lane,  Cecil   Bank  v.  Snively,  23 Md.  253. 
87  Wis.  348,  57  X.  W.   Rep.  L105  ;  cf.  "Godding  v.    Brackett,   34  Me.  27. 
Brown  v.  Chubb,  L35  X.  Y.  174,  31  X.  See§  82. 
E.  Rep.  1030.  <  oilman     v.    IVrrie.    II    Miss.    131. 

3  Cutter  v.  Griswold,  Walker's  Ch.  See  Orendorf   v.    Budlong,    1.    Fed. 

(Mich.)  137;   Lnsorge  v.  Barth,  88  Wis.  Rep.  25 ;  Partee  v.  Mathews,  53  Miss. 

558,  60  X.  W.    Rep.    L055.     Musi    the  1 10. 
creditor    lirsl     recover     judgment     in 


§59  TI1E    REMEDY   AT   LAW.  109 

lent  transfers.  It  would  often  be  impossible,  especially 
in  cases  affecting  realty,  to  render  the  title  marketable 
until  the  flexible  hand  of  a  court  of  equity  had  removed 
the  simulated  transfers  and  incumbrances  in  which  the 
debtor  has  involved  it.  Equity  alone  can  disentangle  the 
title  from  the  doubts  and  embarrassments  which  interfere 
with  a  realization  of  a  fair  price  ;  and  to  that  extent  and 
for  that  purpose  its  invaluable  assistance  is  usually  asked.1 
In  Rhead  v.  Hounson,2  the  court  said:  "The  bill  must 
be  construed  in  reference  to  its  nature.  It  is  not  filed  to 
reach  property  incapable  of  seizure  on  execution,  and 
therefore  based  on  the  theory  that  the  legal  remedy  has 
been  exhausted.  Very  far  from  it.  The  principle  on 
which  it  proceeds  is  that  a  legal  remedy  is  in  fact  pro- 
gressing, and  which,  being  fraudulently  obstructed,  the 
aid  of  the  court  is  needed  to  remove  that  obstruction. 
The  claim  made  is  that  the  deed  from  the  judgment- 
debtor  to  his  son  is  fraudulent  as  against  the  creditor, 
and  that  the  farm  is  therefore  subject  to  levy  and  the 
deed  exposed  to  be  removed  out  of  the  way  of  it  by  tin- 
assistant  jurisdiction  of  equity." 

§  59.  The  remedy  at  law.  —  A  judgment-creditor  may 
proceed  at  law  to  sell  under  execution  lands  or  property 
which  his  debtor  has  fraudulently  alienated:5  which  are 
subject  to  execution.  The  attempted  transfer  may  be 
treated  as  a  nullity,  and  the  property  subjected  to  seizure 
and  sale    upon    execution    the   same  as  though    no   such 


■Partee   v.  Mathews.  5:]  Miss.   146;  90;   Fowler   v.    Trebein,    Hi  Ohio   St. 

Calm  v.  Person,  56  Miss.  363.  493;  Staples  v.  Bradley,  33  Conn.  L67; 

2  46  Mich.  246.  Foley   v.    Bitter,   34    Md.    646;    Gor 

3Carter  v.  Castleherry,  5  Ala.  277;  merlyv.  Chapman,  51    (la.    421  ;  Rus 

Booth  v.  Bunce,  33  N.  Y.  139  ;  Henry  sell  v.  Dyer.  33  N.   H.  186  ;  Smith  v. 

v.  Hinman,  25  Minn.    199;  Brown  v.  Reid,  134  NY.   576,    577,     31    N     E. 

Snell,    46     Me.    490;     Thomason     v.  Rep.   1082:    Maders   v.    Whallon,    71 

Neeley,  50  Miss.  313  ;  Jacoby's  Appeal,  Hun     (N.  Y.)  378,     26    X.    Y.   Supp. 

67  Pa.  St.  434  ;  Allen  v.  Berry,  50  Mo.  614.     But  see  g  69. 


110  THE   REMEDY   AT    LAW.  §59 

covinous  transfer  had  ever  been  made.1  The  creditor  in 
such  cases  may  consider  the  debtor  as  still  the  owner  of 
the  property,  and  may  pursue  it  to  secure  satisfaction  of 
the  claim  the  same  as  though  the  title  were  unembarrassed 
by  the  fraudulent  deed  or  transfer.3  The  general  prin- 
ciple was  involved  in  Rinchey  v.  Stryker,3  in  which  case 
it  was  decided  that  where  an  attachment  was  issued  to  a 
sheriff  he  was  entitled  to  seize  under  it  any  property 
which  the  debtor  might  have  disposed  of  with  intent  to 
defraud  his  creditors  ;  that  by  such  seizure  a  specific  lien 
was  acquired  upon  the  property  attached,  and  the  sheriff, 
when  sued  for  wrongfully  taking  the  property,  had  a  right 
to  show,  even  before  judgment  in  the  attachment  suit, 
that  the  title  of  the  purchaser  from  the  debtor  was 
fraudulent  and  voidable  as  against  the  attaching  creditor.1 
Incidentally  it  may  be  recalled  that  where  the  plaintiff  has 
the  legal  title  to  land,  and  it  is  held  out  of  possession  by 
the  defendant,  he  must  proceed  at  law.  Bills  quia  timet 
cannot  ordinarily  be  brought   by  one  out  of  possession,5 


1  Tupper    v.    Thompson,  26   Minn.  24  How.    227;   Baldwin  v.    Peet,    22 

386  ;  Henry  v.  Hinman,  25  Minn.  199;  Tex.    708,    note.     In    Massachusetts, 

National  Park  Bank   v.    Lanahan,  60  jurisdiction   in   equity   is   limited   to 

Md.  513  ;  Smith  v.    Reid,   134  N.    Y.  property    or  rights  which  cannot  be 

568 ;  31  N.    E.   Rep.  1082  ;  Maders  v.  attached     or    taken     on     execution. 

W  ha  lion,  74  Hun,  372,  26  N.  Y.  Supp.  Schleisinger  v.    Sherman,   127  Mass. 

614;  Wagner   v.    Law,  3  Wash.    St.  209. 

500,    28  Pac.  Rep.   1109,  29  Id.    927;  326  How.  Pr.  (N.  Y.)  75,    31  N.   Y. 

Bergen  v.  Carman,79  N.  Y.  153.  1 40. 

-  Thomason  v.  Neeley,  50  Miss.  313.  4  See     Greenleaf    v.     Munford,    30 

It   has  been  observed  that  where  the  How.  Pr.  (N.  Y.)  30,  31.      But  com- 

"deed  is  a  mere  pretence,  collusively  pare  Thurber  v.  Blanck,  50  N   Y.  83, 

devised,  and  the  parties  do  not  intend  with  Mechanic's  &  Traders'  Bank  v. 

other  than  an  ostensible  change  of  the  Dakin,  51  N.  Y,   519,    reaffirmed  in 

property,  fche  property  does  not   pass  Peopleexrel.  Oauffman  v.  Van  Buren, 

as  to  creditors;    and  even  when  the  136 N.  Y.  252,  32  N.  E.  Rep.  775.     See 

parties  intend  an  irrevocable  dispo-  Lawrence  v.  Bank  of  the  Republic,  35 

sition  of  the  property,  but  the  convey-  N.  Y.  320  ;  infra,  £  81. 

ance  has   been  made    with    the    intent  ■' United    States    v.    Wilson,    118    U. 

to    defraud    creditors,"    it    may    be  S.  89,    6  S.  C.  Rep.  991. 
avoided.      Chandler  v.  Von  Roeder, 


6o 


BY   SUIT   IN   EQUITY. 


II  I 


unless    the    absence    of    possession    is    excused  by  local 
statute. 

§  60.  By  suit  in  equity. — Fraud  is  one  of  the  recognized 
subjects  of  equity  jurisdiction,  and  is  the  most  ancient 
foundation  of  its  power.1  The  primary  jurisdiction  in 
equity  is  in  personam:  The  existence  of  a  remedy  at 
law  does  not  interfere  with  the  riorht  of  a  creditor  to 
resort  to  a  court  of  equity3  to  secure  a  cancellation  of  a 
fraudulent  conveyance  as  an  obstacle  in  the  way  of  the 
full  enforcement  of  a  judgment,  and  a  cloud  on  the 
title  to  the  property  sought  to  be  reached.4  The  same 
rule  applies  where  it  is  sought  to  set  aside  fraudulent 
chattel  mortgages  and  judgments  fraudulently  confessed.5 
The  suit  in  equity  is  sometimes  said  to  be  an  ancillary 
relief  in  aid  of  the  legal  remedy/'  since  a  court  of  equity 
does  not   intervene  to  enforce  the  payment  of  debts.7     It 


1  Hartshorn  v.  Eatnes,  31  Me.  97  ; 
Story's  Equity,  §  68.  See  Warner  v. 
Blakeman,  4Keyes  (N.  Y.)507  ;  Logan 
v.  Logan,  22  Fla.  564. 

2  Wilson  v.  Martin- Wilson, etc.  Co., 
151  Mass.  517,  24  N.  E.  Rep.  784. 

3  See  §51. 

4  Planters'  &  M.  Bank  v.  Walker,  7 
Ala.  926 ;  Sheafe  v.  Sheafe,  40  N.  H. 
516  :  Dargan  v.  Waring,  11  Ala.  988  ; 
Cookv.  Johnson,  12  N.  J.  Eq.  52  ; 
Bean  v.  Smith,  2  Mason,  253;  Harnlen 
v.  McGillieuddy,  62  Me.  269  ;  Waddell 
v.  Lanier,  62  Ala.  347  ;  Traip  v.  Gould, 
15  Me.  83;  Beaumont  v.  Herrick,  24 
Ohio  St.  456  ;  Sockman  v.  Sockman, 
18  Ohio,  368  ;  Musselman  v.  Kent,  33 
Ind.  452  ;  Dockray  v.  Mason,  48  Me. 
178.  In  Gormley  v.  Potter,  29  Ohio 
St.  599,  the  court  said  :  "  The  petition 
was  founded  upon  the  fact  that  the 
land  had  been  taken  in  execution, 
and  had  for  its  object  the  removal  of 
the  cloud  cast  upon  the  title  by  the 
fraudulent  conveyance.    The  removal 


of  this  cloud  was  in  the  interest 
of  both  the  debtor  and  the  creditors 
by  enabling  the  property  to  be  sold 
at  a  better  price."  Again,  it  has 
been  observed  that  "The  creditor 
has  not  only  a  right  to  have  the 
property  subjected  to  the  pay- 
ment of  his  judgment,  but  to  have 
it  subjected  in  such  manner  thai  it 
will  bring  its  fair  market  value." 
Fowler  v.  McCartney,  27  Miss.  510. 

5  Sweetser  v.  Silber,  87  Wis.  102, 
58  N.  W.  Rep.  239;  Gullickson  v. 
Madsen,  87  Wis.  19,  57  N.  W.  Rep. 
965. 

6  See  McCartney  v.  Bostwick,  32 
N.  Y.  57,  and  compare  Niver  v. 
Crane,  98  N.  Y.  40,  and  Estes  v.  Wil- 
cox, 67  N.  Y.  264. 

'Dunlevy  v.  Tallmadge,  32  N.  Y. 
459;  Voorhees  v.  Howard,  I  Keyes 
(N.  Y.)  383;  Griffin  v.  Nitcher,  57 
Me.  272  ;  Logan  v.  Logan,  22  Fla.  564. 
See§  73. 


112  BY    SUIT   IN   EQUITY.  §  60 

may  be  asked  why  resort  is  so  frequently  had  to  a  credi- 
tor's bill  seeking  a  decree  to  avoid  or  cancel  the  covinous 
transfer  when  the  property  may  be  more  expeditiously 
seized  under  attachment  or  execution.  The  creditor's  bill, 
or  a  suit  to  clear  the  fraudulent  transfer,  is,  for  many  rea- 
sons, entitled  to  preference  as  a  means  of  relief.  Should 
the  creditor  attempt  to  sell  the  disputed  property  arbi- 
trarily under  execution,  bidders  would  be  deterred  from 
purchasing  lest  they  should  buy  a  lawsuit,  hence  the  mar- 
ket value  of  the  land  embraced  in  the  covinous  transfer 
is  practically  destroyed.  Then  the  seizure  of  the  prop- 
erty subjects  the  creditor  to  the  peril  incident  to  proving 
that  the  transfer  was  fraudulent,  and  in  the  event  of  fail- 
ure to  establish  fraud,  of  paying  damages  for  the  unwar- 
rantable interference,  seizure,  and  sale.  By  filing  a 
creditor's  bill  practically  the  only  risk  incurred  is  the  costs 
and  expense  of  the  suit,  for  generally  no  seizure  is  effected 
unless  the  suit  is  successful,  in  which  event  the  covinous 
transfer  and  cloud  on  the  title  is  cleared  away.  Then,  as 
already  stated,  equity  procedure  is  more  flexible  than  the 
procedure  at  law,1  and  in  equity  an  inequitable  transaction, 
not  absolutely  fraudulent  in  the  full  sense  of  that  term, 
maybe  avoided  at  the  suit  of  a  creditor.  Fraud  it  is  said 
may  be  presumed  in  equity  but  must  be  proved  at  law  ;2 
but  this  is  a  loose  and  unreliable  statement,  for  it  must 
be  proved  in  either  forum.  Courts  of  equity  it  is  true 
will  act  upon  circumstance  indicating  fraud  which  courts 
of  law  might  scarcely  deem  satisfactory  proofs  ;  and  will 
grant  relief  upon  the  ground  of  fraud  established  by  pre- 
sumptive evidence  of  such  character  as  courts  of  law 
would  not  always  deem    sufficient  to    justify  a  verdict.3 


'Sec  §51.  3  See  Jackson  v.  King,  4  Cow.  (N. 

King  v.   Moon,  42   Mo.    555.     See  Y.)    207,     3    Greenl.    Ev.     §  254,    1 

Kilbourn   v.   Sunderland,   130   U.   S.  Story's  Eq.,  Jur.  §§  190-193.    "Fraud 

515,  9  S.  C.  Rep.  594.  is  not   to  be  considered  as  a  Bimple 


6o 


BY   SUIT   IN    EQUITY. 


113 


In  Kilbourn  v.  Sunderland,1  the  court  says  "  Fraud  has  in 
equity  a  more  extensive  signification  than  at  law."  The 
Supreme  Court  of  Pennsylvania,2  in  commenting  upon 
the  applicability  of  equity  to  suits  involving  fraudulent 
alienations,  remark  :  "  It  is  especially  adapted  to  this 
class  of  cases.  Its  process  is  plastic  and  may  be  readily 
moulded  to  suit  the  exigencies  of  the  particular  case. 
A  court  of  equity  proceeds  with  but  little  regard  to 
mere  form.  It  moves  with  celerity,  and  seizes  the 
fruits  of  a  fraud  in  the  hands  of  the  wrong-doer."  Having 
jurisdiction  for  one  purpose  equity  will  make  a  complete 
disposition  of  the  cause.3  Equity  endeavors  to  deal  with 
the  substance  of  affairs  ;  to  look  beyond  the  observance 
of  mere  forms  ; 4   to  regulate  its  judgment  according  to  the 


fact,  but  a  conclusion  to  be  drawn 
from  all  the  circumstances  of  the 
case.  It  may  be  inferred  from  the 
nature  of  the  contract  itself,  or  from 
the  condition  or  circumstances  of  the 
parties.  The  general  principle  is  well 
settled,  that  equity  will  give  relief 
against  presumptive  frauds,  and 
therein  will  go  further  than  courts  of 
law,  where  fraud  must  be  proved  and 
not  presumed  ....  There  are  many 
instances  of  fraud  that  would  in 
equity  affect  instruments  in  writing 
concerning  lands,  of  which  the  law 
could  not  take  notice."  Burt  v. 
Keyes,  1  Flipp.  63.  Compare  United 
States  v.  Amistad,  15  Pet.  594  ;  Lloyd 
v.  Fulton,  91  U.  S.  483.     See  g  15. 

1  130  U.  S.  515,  9  S.  C.  Rep.  594. 
Compare  1  Story,  Eq.  Jur.  §  450. 

4  Fowler's  Appeal,  87  Pa.  St.  454. 
In  Artman  v.  Giles,  155  Pa.  St.  416,  26 
Atl.  Rep.  668,  the  right  of  simple  con- 
tract or  attaching  creditors  to  restrain 
a  judgment-creditor  from  enforcing 
his  judgment  was  denied.  The  court 
says  :  "  The  only  case  at  all  analogous 
to  the  present,  in  which  a  creditor  not 
having    a   judgment    has   been    per- 


mitted to  interfere  with  the  debtor's 
disposition  of  his  property,  is  Fow- 
ler's Appeal,  87  Pa.  St.  449.  In  that 
case  the  bill  averred  that  the  debtor 
had  conveyed  land  to  his  son-in-law, 
by  collusion  to  defraud  his  creditors, 
and  that  the  grantee  was  about  to 
convey  to  bona  fide  purchasers.  The 
debtor  having  died,  the  bill  was 
sustained  upon  the  ground  that  the 
creditor  complainant,  though  without 
a  judgment,  had  an  express  statutory 
lien,  which  gave  him  a  standing.  To 
sustain  the  present  injunction  would 
be  going  a  decided  step  farther  than 
any  case  adjudicated,  and  in  opposi- 
tion to  established  principles." 

3  Manufacturing  Co.  v.  Bradley,  105 
U.  S.  182  ;  Oelrichs  v.  Spain,  15  Wall. 
211  ;  Crane  v.  Bunnell,  10  Paige  (N. 
Y.)333;  Billups  v.  Sears,  5  Gratt. 
(Va.)  31  ;  Pearce  v.  Creswick,  2  Hare, 
296  ;  Martin  v.  Tidwell,  36  Ga.  345  ; 
Sanborn  v.  Kittredge,  20  Vt.  632; 
Souder's  Appeal,  57  Pa.  St.  498,  502; 
Corby  v.  Bean,  44  Mo.  379. 

"Wright  v.  Oroville  M.  Co.,  40  Cal. 
20.  In  Buck  v.  Voreis,  89  Ind.  117, 
Elliott,  J.,  said:   "  Forms  are  of  little 


114  SUPPLEMENTARY    PROCEEDINGS.  §  6l 

real  purposes  which  controlled  parties  in  the  various  mat- 
ters brought  before  it  for  relief  or  correction;  ^  to  tear  aside 
the  covering  beneath  which  the  perpetrators  of  the  fraud 
seek  concealment ;  to  deal  with  actual  facts,  not  with  pre- 
texts and  disguises.  The  Supreme  Court  of  Illinois  say  : 
"Equity  will  penetrate  beyond  the  covering  of  form,  and 
look  at  the  substance  of  a  transaction,  and  treat  it  as  it 
really  and  in  essence  is,  however  it  may  seem."  2 

Rules  of  pleading  in  equity  are  not  so  strict  in  matters 
of  form  as  at  law.3 

§  61.  Supplementary  proceedings. —  Supplementary  pro- 
ceedings have,  in  New  York  and  in  some  of  the  other 
States  which  have  appropriated  its  reformed  system  of 
procedure,  taken,  in  some  measure,  the  place  of  creditors' 
actions  or  suits  in  equity  to  reach  equitable  assets.  This 
remedy  is  now  a  special  proceeding  in  New  York,4  and 
not  a  proceeding  in  the  original  action.  These  proceed- 
ings  furnish,    to   a   certain   extent,    a    substitute5    for    a 


moment,  for  where  fraud  appears  system  of  equity  jurisprudence  that 
courts  will  drive  through  all  matters  fraud  vitiates  every  transaction  ;  and, 
of  form  and  expose  and  punish  the  however  men  may  surround  it  with 
corrupt  act."  Of  course,  equity  "  can-  forms,  solemn  instruments,  proceed- 
not  create  a  title  where  none  exists."  ings  conforming  to  all  the  details  re- 

.     .     .     .    "  Creditors  can  work  out  quired  in  the  laws,   or  even  by  the 

equities    only   through  the  rights  of  formal  judgment  of  courts,  a  court  of 

the  parties  where  there  is  no  fraud."  equity     will    disregard    them    all,   if 

Rush  v.  Vought.  55  Pa.  St.  438,444,  necessary,    that    justice    and    equity 

quoted  in   Curry  v.    Lloyd,     22   Fed.  may  prevail." 

Rep.  365.  4  N.  Y.  Code  Civ.  Pro.  §  2433.    Com- 

1  Livermore    v.   McNair,    34   N.  J.  pare  West  Side   Bank  v.  Pngsley,  47 

Eq.  482  ;  Buck  v.  Voreis,  89  Ind.  117.  N.  Y.  368. 

•Wadhams  v.  Gay,  73  HI.  415,  435.  B  In   Importers*  and  Tr.  Nat.  Bk.  v. 

See  Gay  v.  Parparfc,  100  U.  S.  699,   1  Quackenbush,  143  N.  Y.  571,  the  court 

S.  ('.  Rep.  456.  says:  '*  Proceedings  supplementary  to 

8  Birely's  Ex'rs  v.  Staley,  5  Gill.  &  execution  are  remedies  in  equity  for 

J.  (Md.)432;  Ridgely  v.  Bond,  18  Md.  the  collection  of  the  creditor's  judg- 

I50-.  Small  v.  Owings,  1  Md.  Ch.  "(;7.  ment,  and  were  intruded  asasubsti- 

ln  Warner  v.  Blakeman,  4  Keyes (N.  tute  for  the  creditor's  bill,  as  formerly 

Y.)  507,  Woodruff,  J.,  said  :  "  It  is  the  used  in  chancery." 
just  and  proper  pride  of  our  matured 


6i 


SUPPLEMENTARY    PROCEEDINGS. 


Ii; 


creditor's  bill,1  for  the  discovery  and  sequestration  of 
property,2  and  by  their  commencement  a  lien  is  said  to 
be  acquired  upon  the  debtor's  equitable  assets,8  though 
another  creditor  may  gain  precedence  if,  after  the  service 
of  the  order  for  the  examination  of  the  debtor,  and 
before  the  appointment  of  a  receiver,  he  discovers  prop- 
erty liable  to  execution  and  levies  upon  it.4  Generally 
speaking  these  proceedings  will  reach  whatever  property 
is  available  on  a  creditor's  bill,3  and  have,  as  we  have 
seen,  been  held  to  be  a  simple  substitute  for  it,6  and  are 
entitled  to  all  the  presumptions  of  regularity  which  apper- 
tain to  proceedings  in  courts  of  general  jurisdiction.7 
Supplementary  proceedings  are  not  exclusive.8  The  judg- 
ment-creditor may  abandon  them  and  institute  a  suit  in 
his  own  name  to  annul  a  fraudulent  alienation,9  and  he 
may  invoke  both  remedies  at  the  same  time.10     If  a  third 


1  Spencer  v.  Cuyler,  9  Abb.  Pr.  (N. 
Y.)  382  ;  People  v.  Mead,  29  How.  Pr. 
(N.  Y.)  360  ;  Pope  v.  Cole,  64  Barb.  (N. 
Y.  409  ;  afiTd,  55  N.  Y.  124  ;  Importers' 
&  Tr.  Nat.  Bk.  v.  Quackenbiish,  143 
N.  Y.  571,  38  N.  E.  Rep.  728.  Com- 
pare Catlin  v.  Doughty,  12  How.  Pr. 
(N.  Y.)  459. 

2  Becker  v.  Torrance.  31  N.  Y.  631  ; 
Billings  v.  Stewart,  4  Dem.  (N.  Y.) 
269. 

3  Lynch  v.  Johnson,  48  NT.  Y.  33; 
Storm  v.  Waddell,  2  Sandf.  Ch.  (N. 
Y.)  494  ;  Brown  v.  Nichols,  42  N.  Y. 
26:  Edmonston  v  McLoud,  16  N.  Y. 
544  ;  Billings  v.  Stewart,  4  Dem.  (N. 
Y.)  268.  Compare  Dubois  v.  Cassidy, 
75  N.  Y.  300 ;  Campbell  v.  Genet,  2 
Hilt.  (N.  Y.)  290;  Robinson  v.  Stewart, 
10  N.  Y.  196.  Although  the  lien  ac- 
quired by  the  judgment-creditor  in 
these  proceedings  is  not  divested  by 
the  death  of  the  debtor,  it  cannot  be 
enforced  in  a  Surrogate's  Court  un- 
less prior  to  the  death  a  receiver  was 
appointed  or  an   order  was  made  di- 


recting the  application  of  the  debtor's 
property  to  the  satisfaction  of  the 
judgment.  Billings  v.  Stewart,  4 
Dem.  (N.  Y.)  265. 

4  Becker  v.  Torrance,  31  N.  Y.  631. 
See  Davenport  v.  Kelly,  42  N.  Y.  193. 

5  Barnes  v.  Morgan,  3  Hun  (N.  Y.) 
703:   Barker  v.   Dayton,  28  Wis.  367. 

6  Lynch  v.  Johnson,  48  N.  Y.  33  ; 
Smith  v.  AVeeks,  60  Wis.  100,  18  N. 
W.  Rep.  778:  Importers' &  Tr.  Nat. 
Bk.  v.  Quackenbiish,  143  N.  Y.  571, 
38  X.  E.  Rep. 728.  Compare  Williams 
v.  Thorn,  70  N.  Y.  270.     See  .'  45. 

1  Wright   v.  Nostrand,  94  N.  Y.  31. 

8  Williams  v.  Sexton,  19  Wis.  42. 

9  Bennett  v.  McGuire,  58  Barb.  (N. 
Y.)  625;  Anderson  v.  Pilgrim,  II  S. 
('.  423,  19  S.  E.  Rep.  1002,  20  Ed.  64. 

10  Gates  v.  Young,  17  Weekly  Dig. 
(N.  Y.)  551  ;  Schloss  v.  Wallach,  16 
Abb.  N.  C.  (N.  Y.)  319??,  38  Hun  (N. 
Y.)  638,  102  N.  Y.  683;  Matter  of 
Sickle,  52  Hun  (N.  Y.)  527,  5  N.  Y. 
Supp.  703.    See  §§51,  65. 


n6 


SUPPLEMENTARY   PROCEEDINGS. 


6l 


party  makes  claim  to  any  property  which  the  examination 
discloses,  the  rights  of  the  claimants  cannot  be  determined 
in  this  proceeding,  but  resort  must  be  had  to  a  suit.1  The 
procedure  is  usually  by  order,  made  upon  proof  of  the 
return  of  an  execution  unsatisfied,  requiring  the  debtor  to 
appear  in  person  in  court,  to  be  examined  concerning  his 
property.2  The  judgment  upon  which  the  order  is  pro- 
cured must  be  in  personam?  Property  or  equitable 
assets  being  thus  disclosed,  a  receiver  is  appointed,  who, 
upon  qualifying,  becomes  vested  with  the  debtor's  assets 
and  equitable  interests,  without  conveyance  or  assign- 
ment,4 though  he  does  not  get  title  to  exempt  property.5 
The  receiver  represents  creditors,  and  thus  may  impeach 
the  debtor's  fraudulent  sales  G  in  the  right  of  creditors.  It 
seems  to  be  no  objection  to  the  exercise  of  the  juris- 
diction appointing  a  receiver  that  the  debtor  has  no 
assets,7  or  that  such  property  as  he  is  possessed  of  is  sub- 


1  West  Side  Bank  v.  Pugsley,  47  N. 
Y.  372  ;  Bennett  v.  McGuire,  58  Barb. 
(N.  Y.)  634;  Rodman  v.  Henry,  17  N. 
Y.  484  ;  Sebrauth  v.  Dry  Dock  Sav- 
ings Bank,  20  Alb.  L.  J.  197.  Sup- 
plementary proceedings  may  be  insti- 
tuted before  a  judge  of  a  Federal 
court,  on  a  judgment  at  law  recovered 
in  the  United  States  Courts.  Ex  parte 
Boyd,  105  U.  S.  647  ;  Canal  &  C.  Sts. 
R.  R.  Co.  v.  Hart,  114  U.  S.  654,  661. 
Compare  Senter  v.  Mitchell,  5  McCra, 
147.  But  the  examination  cannot  be 
held  in  a  State  court  upon  a  Federal 
judgment.  Tompkins  v.  Pureed,  12 
Hun  (N.  Y.)  662.  Compare  Goodyear 
Vulcanite  Co.  v.  Frisselle,  22  Hun  (N. 
Y.)  175. 

■  Bartlett  v.  McNeil,  49  How.  Pr. 
(N.  Y.)  55  ;  affi'd  60  N.  Y.  53. 

■•>  Bartlett  v.  McNeil,  3  Hun  (N.  Y.) 
221.  Compare  Schwinger  v.  Hickok, 
53  N.  Y.  280. 

4  Porter  v.  Williams,  9  N.  Y.  142; 
Cooney  v.  Cooney,  65   Barb.    (N.    Y) 


524  ;  Bostwick  v.  Menck,  40  N.  Y. 
383. 

5  Cooney  v.  Cooney,  65  Barb.  (N.  Y.) 

525  ;  Hudson  v.  Plets,  11  Paige  (N.  Y.) 
180;  Andrews  v.  Rowan,  28  How.  Pr. 
(N.  Y.)  126.  SeeTillotson  v.  Wolcott, 
48  N.  Y.  190  ;  Hancock  v.  Sears,  93  N. 
Y.  79. 

6  Dollard  v.  Taylor,  33  N.  Y.  Super. 
498;  Bostwick  v.  Menck,  40  N.  Y. 
384  ;  Porter  v.  Williams,  9  N.  Y.  142. 

1  See  Browning  v.  Bettis,  8  Paige 
(N.  Y.)  508;  Bloodgood  v.  Clark,  4 
Paige  (N.  Y.)  574;  Shainwald  v. 
Lewis,  6  Fed.  Rep.  776.  Monell  J., 
held,  in  Dollard  v.  Taylor,  33  N.  Y. 
Superior  Ct.  496,  that  where  the  only 
purpose  of  appointing  a  receiver  in 
supplementary  proceedings  was  to  at- 
tack a  fraudulent  assignment,  the 
application  was  properly  denied  as 
the  judgment-creditor  could  himself 
fde  a  bill  for  that  purpose,  and  in  a 
proper  case  secure  a  receiver  pending 
the  suit. 


§62  ASSUMPSIT  —  CASE  —  CONSPIRACY.  I  I  7 

ject  to  execution.1  As  an  illustration  of  the  utility  of  this 
remedy  it  may  be  stated  that  a  widow's  unassigned  right 
of  dower  can  be  reached  by  her  creditors2  in  supplement- 
ary proceedings,3  for  it  is  liable  to  their  claims,4  and  a 
receiver  appointed  in  these  proceedings  may  bring  an 
action  for  its  admeasurement.5 

§  62.  Assumpsit  —  Case  —  Conspiracy.  —  A  fraudulent 
assignment  will  not  ordinarily  authorize  a  judgment 
against  the  purchaser  for  the  original  debt ; u  nor  is  an 
action  on  the  case  considered  to  be  an  appropriate  form  of 
procedure  against  the  debtor  and  his  fraudulent  alienee. 
The  latter  form  of  action  is  discussed  at  much  leneth  in 
Lamb  v.  Stone,7  and  the  language  of  the  court  is  quoted 
with  approval  by  the  learned  and  lamented  Mr.  Justice 
Campbell,  in  Adler  v.  Fenton,8  as  follows:  "The  plaintiff 
complained  of  the  fraud  of  the  defendant  in  purchasing 
the  property  of  his  absconding  debtor,  in  order  to  aid 
and  abet   him    in  the  fraudulent  purpose  of  evading  the 


'  Bailey  v.  Lane,  15  Abb.  Pr.  (N.  Y.)  4  Tompkins  v.  Fonda,  4  Paige  (N. 

373,  an  note.     Tbe    order    in  supple-  Y. )  448  ;  Mutual  Life  Ins.  Co.  v.  Ship- 

mentary  proceedings  usually   forbids  man,   119   N.   Y.   324,   24   N.   E.   Rep. 

the  debtor  from  making  a  transfer  of  177. 

his  property  until  further  directions  :  5  Payne  v,  Becker,  87  N.  Y.  153. 
but  in  New  York  his  earnings  within  See  Stewart  v.  McMartin,  5  Barb.  (N. 
sixty  days  of  the  commencement  of  Y.)  438.  It  may  be  noted  in  conclud- 
the  proceedings  are  exempt  and  it  is  ing  this  section  that  an  attorney  em- 
not  considered,  a  contempt  of  the  ployed  to  collect  a  claim  has  author- 
court's  order  for  him  to  apply  them  ity  to  institute  supplementary  pro- 
to  the  support  of  his  family.  Han-  ceedings,  but  is  not  authorized  under 
cock  v.  Sears,  93  N.  Y.  79  ;  Newell  v.  the  original  retainer  to  direct  the  re- 
Cutler,  19  Hun  (N.  Y.)  74,  is  over-  ceiver  to  institute  an  action  to  annul 
ruled.  The  salary  of  a  municipal  a  fraudulent  transfer.  Ward  v.  Roy, 
officer  cannot  be  reached  in  these  pro-  69  N.  Y.  9(3. 

ceedings.    Waldman  v.  O'Donnell,  57  6  Aspinall   v.  Jones,   17  Mo.    212. 

How.  Pr.  (N.  Y.)  215.     But   examine  See  Chap.  XL 

Singer  v.  Wheeler,  6  111.  App.  225.  7 11  Pick.  (Mass.)  527. 

2  Mutual   Life   Ins.  Co.  v.  Shipman,  s24    How.    412;    compare   Find  lay 
119  N.  Y.  330,  24  N.  E.  Rep.  177.  v.  McAllister,  113  U.    S.    104,  5  S.    C. 

3  Strong  v.  Clem,  12  Ind.  37  ;  Payne  Rep.  401. 
v.  Becker,  87  N.  Y.  153. 


I  I S  ASSUMPSIT  —  CASE  —  CONSPIRACY.  §62 

payment  of  his  debt.  The  court  ask,  what  damage  has 
the  plaintiff  sustained  by  the  transfer  of  his  debtor's 
property?  He  has  lost  no  lien,  for  he  had  none.  No 
attachment  has  been  defeated,  for  none  had  been  made. 
He  has  not  lost  the  custody  of  his  debtor's  body,  for  he 
had  not  arrested  him.  He  has  not  been  prevented 
from  attaching  the  property,  or  arresting  the  body 
of  his  debtor,  for  he  had  never  procured  any  writ 
of  attachment  against  him.  He  has  lost  no  claim  upon, 
or  interest  in  the  property,  for  he  never  acquired  either. 
The  most  that  can  be  said  is,  that  he  intended  to  attach 
the  property,  and  the  wrongful  act  of  the  defendant  has 

prevented    him     from    executing    his    intention 

On  the  whole,  it  does  not  appear  that  the  tort  of  the 
defendant  caused  any  damage  to  the  plaintiff.  But  even 
if  so,  yet  it  is  too  remote,  indefinite  and  contingent,  to 
be  the  ground  of  an  action."  Many  cases  might  be  cited 
to  the  same  general  effect.1  In  an  action  on  the  case  for 
conspiracy  which  arose  in  Rhode  Island,2  the  plaintiffs, 
who  were  simple  contract  creditors,  claimed  that  the 
defendants  and  the  debtor  had  combined  together  to  pre- 
vent plaintiffs  and  other  creditors  from  obtaining  payment 
of  their  debts  ;  that  the  debtor,  among  other  things,  had 
made  fictitious  mortgages  t0  the  defendants  under  cover 
of  which  the  latter  had  secreted  the  property  and  removed 
it  out  of  the  debtor's  possession,  so  that  plaintiffs  were 
prevented  from  attaching  it,  and  had  thus  lost  their 
claims.  The  court  ruled  that  the  action  could  not  be 
maintained.3      "A  simple  conspiracy,"  says    Nelson,   J., 


'Smith     v.   Blake,   1   Day  (Conn.)  (Mass.)   146;    Bradley  v.   Fuller,  118 

258;  Moody    v.  Burton,  27  Me.  427;  Mass.    239;    Mowry    v.    Schroder,   4 

( Gardiner  v.  Sherrod,  2  Hawks  (N.  C.)  Strob.  (S.  C.)  Law  69. 

1?:! :  Kimball  v.  Barman,  34  Md.  407;  !Klous   v.  Hennessey,  13  R.  I.  335. 

Austin  v.   Barrows,   41    Conn.   287;  8  Chief- Justice  Durfee  said:  "There 

Green    v.    Kimble,   6  Blackf.   (Ind.)  is  some  conflict  of  authority  on  the 

552;    Wellington    v.    Small,   3  Cusb.  question    thus  raised,  but  the  more 


§62 


ASSUMPSIT  —  CASE  — CONSPIRACY. 


[19 


in  Hutchins  v.  Hutchins,1  "  however  atrocious,  unless  it 
resulted  in  actual  damage  to  the  party,  never  was  the 
subject  of  a  civil  action,  not  even  when  the  old  form  of  a 
writ  of  conspiracy,  in  its  limited  and  most  technical  char- 
acter, was  in  use."2  Yet  authority  can  be  cited  tending 
to  uphold  a  recovery  in  such  cases.  In  Meredith  v. 
Johns,3  it  appeared  that  an  action  of  tort  had  been 
brought,  and  a  verdict  for  ^500  rendered,  against  a  third 
party,  for  secretly  and  maliciously  taking,  carrying  away, 
and  concealing  the  slaves  and  property  of  one  Peter  May 
(against  whom  the  plaintiff  had  a  cause  of  action),  and 
also  for  aiding,  assisting  and  counseling  May  to  absent 
himself,  to  the  end  that  the  creditor  might  be  pre- 
vented from  recovering  against  him.  The  Supreme  Court 
of  Appeals  of  Virginia  declined  to  interfere  in  equity  to 
restrain  the  enforcement  of  the  judgment,  and  took  the 
position  that  the  defense  was  a  legal  one,  and  that  the 
party  aggrieved  must  seek  redress  in  a  law  court.   It  seems, 


numerous,  and,  we  think,  the  better 
reasoned  and  stronger  cases  are 
against  the  action.  The  principal 
ground  of  decision  in  these  cases  is 
that  the  damage,  which  is  the  gist  of 
the  action,  is  too  remote,  uncertain 
and  contingent,  inasmuch  as  the  cred- 
itor has  not  an  assured  right,  but 
simply  a  chance  of  securing  his  claim 
by  attachment  or  levy,  which  he  may 
or  may  not  succeed  in  improving.  It 
is  impossible  to  find  any  measure  of 
damages  for  the  loss  of  such  a 
mere  chance  or  possibility.  Another 
ground,  added  in  some  of  the  cases, 
is  that  no  action  would  lie  in  favor  of 
such  a  creditor  against  the  debtor  for 
putting  his  property  beyond  the  reach 
of  legal  process,  if  the  debtor  were  to 
do  it  by  himself  alone,  and  that  what 
would  not  be  actionable  if  done  by 
himself  alone,  cannot  be  actionable 
any  the  more  when  done  by  him  with 


the  assistance  of  others.  The  first  of 
these  grounds,  which  is  the  funda- 
mental one,  and  has  been  chiefly  re- 
lied on,  has  been  so  exhaustively 
analyzed  and  discussed  in  the  cases 
that  it  is  impossible  for  us  to  add  any- 
thing to  the  reasons  adduced  in  sup- 
port of  it."  Klous  v.  Hennessey,  13 
R.  I.  335. 

1  7  Hill  (N.  Y.)  107. 

2 In  Brackett  v.  Griswold,  112  N. 
Y.  467,  20  N.  E.  Rep.  376,  the  court 
say  :  "A  mere  conspiracy  to  com- 
mit a  fraud  is  never  of  itself  a  cause 

of    action The    principles 

which  govern  an  action  for  fraud  and 
deceit  are  the  saint',  whether  tin- 
fraud  is  alleged  to  have  originated  in 
a  conspiracy,  or  to  have  been  solely 
committed  by  a  defendant  without 
aid  or  co-operation." 

H  H.  &M.  (Va.)  595. 


120  ASSUMPSIT  —  CASE  —  CONSPIRACY.  §62 

however,  to  have  approved  the  procedure.1  The  case  of 
Ouinby  v.  Strauss,2  of  which  the  reports  are  meagre  and 
unsatisfactory,  is  another  illustration.  The  action  was 
instituted  by  judgment-creditors  of  one  of  the  defendants 
against  such  defendant  and  his  attorney,  charging  them 
with  having  fraudulently  conspired  together  to  keep  the 
debtor's  personal  property  out  of  the  reach  of  his  cred- 
itors by  the  execution  of  chattel  mortgages  thereon  to 
secure  fictitious  debts,  one  of  them  to  the  attorney,  under 
which  the  property  had  been  sold  and  bid  off  in  the 
attorney's  interest.  The  property  so  sold  exceeded  in 
value  the  amount  of  the  creditor's  judgment.  The  jury 
found  that  there  was  a  conspiracy  and  the  judgment  was 
upheld,  the  appellate  court  saying  that  as  the  property 
appropriated  by  the  attorney  to  his  own  use  exceeded  in 
value  the  amount  of  the  creditor's  claim,  it  was  but  just 
that  he  should  pay  the  creditor  whose  demand  he  had 
sought  to  defeat.  The  point  that  nominal  damages  only 
could  be  awarded  was  expressly  overruled.  The  re- 
covery in  this  case  must,  however,  be  rested  upon  the 
ground  that  the  attorney  had  a  sufficient  amount  of  the 
debtor's  property  in  his  hands  to  satisfy  the  complaining 
creditor's  claim.  In  such  a  case  the  rule  that  only  nomi- 
nal damages  are  recoverable  is  not  controlling.3 


1  Compare  Mott  v.  Danforth,  G  and  its  purpose  was  to  recover  dam- 
Watts  (Pa.)  307  ;  Penrod  v.  Morrison,  ages  which  the  plaintiffs  claim  to  have 
2  P.  &  W.  (Pa.)  126.  suffered  by  the  alleged  tortious  and 

- 90  N.  Y.  664.  But  in  Braem  v.  wrongful  act  of  the  defendant  in  tak- 
Merchants'  Nat.  Bank,  127  N.  Y.  514,  ing  its  judgment  and  issuing  execu- 
28  N.  E.  Rep.  597,  a  damage  suit  by  tion  upon  it,  thus  apparently  defeat- 
one  creditor  against  another  was  de-  ing  the  lien  of  their  execution  and 
feated.  The  defendant  had  procured  the  benefits  which  they  otherwise 
a  judgment  by  consent  against  a  cor-  would  have  derived  from  it."  The 
poration  in  violation  of  the  statute  court  adds  that  plaintiff  had  no  lien 
forbidding  corporate  preferences  and  when  defendant  levied  its  judgment, 
collected  its  claim.  Plaintiff  sued  the  and  that  redress  could  not  be  had  in 
defendant  for  so  doing.  The  action  this  form  of  action. 
failed.  Bradley,  J.,  said:  "This  is  in  3 The  authorities  establish  the  right 
the  nature  of  an  action  on  the  case,  of  a  judgment  creditor  to  his  action 


§§  62a,  63      RELIEF   COLLATERAL   TO    MAIN    ACTION.  121 

§  62a.  Reference  not  ordered. —  In  New  York  State  an 
action  to  set  aside  a  fraudulent  conveyance  will  not  be 
referred.  Gilbert,  J.,  said  :  "  References  are  proper  only 
as  aids  to  facilitate  the  transaction  of  business.  The 
growing  multiplication  of  them  within  the  last  fifteen 
years  has  been  an  evil  prolific  of  individual  injustice  and 
public  alarm."1 

§  63.  Relief  collateral  to  main  action.  —  The  rule  is  estab- 
lished in  New  York  that  in  surplus-money  proceedings  in 
a  foreclosure  suit,  the  referee  has  the  authority  to  inquire 
as  to  the  validity  of  liens  or  conveyances,  and  they  may 
be  attacked  as  fraudulent.2  In  a  reference  as  to  title  in 
partition,  a  party  can  assail  a  mortgage  held  by  another 
party  on  the  ground  that  it  is  fraudulent  and  void  as 
against  creditors.3  It  is  asserted  that  no  good  reason 
exists  why  the  fraudulent  character  of  conveyances  can- 
not be  tested  in  such  proceedings.  When  the  jurisdic- 
tion of  equity  is  once  acquired,  the  court  has  the  right  to 
proceed  to  the  end  and  administer  complete  justice 
between  the  parties.4  This  practice  is  considered  more 
convenient  for  the  disposition  of  cases  of  this  character, 
and  avoids  the  tedious  process  and  increased  expense 
incident  to  a  distinct  and  separate  action  instituted  for  that 
purpose.  Again,  actions  in  aid  of  an  execution  at  law  are 
ancillary  to  the  original  suit,  and  are,  in  effect,  a  continu- 


against    rescuers    of  the    person    or  s  Bergen  v.    Carman,  79  N.  Y.  147  ; 

goods  of  the  debtor,   seized  by   the  1    Am.    Insolv.    Rep.   341.      Compare 

sheriff  to  satisfy  the    judgment,    or  Sehafer  v.  Reilly,  50  N.  Y.  61 ;  Mutual 

against     those     who     prevent      the  Life  Ins.  Co.  v.  Bowen,  47   Barb.  (N. 

seizure  of  the  debtor's  goods  on  exe-  Y.)  618;  Fliess  v.    Buckley,   90  N.  Y. 

cution,   or   who   conspire  to   prevent  292. 

the  levy  of  a  tax  to  satisfy  a  judg-  3  Halsted  v.  Halsted,  55  N.   Y.    1 12. 

ment.     Findlay  v.  McAllister,  113  U.  "  Manufacturing     Co.    v.    Bradley, 

S.   104,    5  S.  C.  Rep.  401,  and  cases  105  U.   8.   182;  Oelriclis  v.    Spain,  15 

cited.  Wall.  211 ;  Martin  v.    Tidwell,  36  Ga. 

1  Bushnell  v.  Eastman,  2  Abb.  Pr.  345  ;  Souder's  Appeal,  57  Pa.  St.  498, 

N.  S.  (N.  Y.)  411.  502. 


122  REMEDY  GOVERNED  BY  LEX  FORI.  §  64 

ance  of  the  suit  at  law  to  obtain  the  fruits  of  a  judgment, 
or  to  remove  obstacles  to  its  enforcement.1  Usually  the 
titles  of  adverse  claimants  cannot  be  litigated  in 
foreclosure.2 

§  64.  Remedy  governed  by  lex  fori. —  In  a  case  already 
cited  which  arose  in  Massachusetts,3  it  was  said  that  the 
law  of  New  York  respecting  fraudulent  conveyances  was 
the  same  as  the  common  law  and  the  law  of  Massachu- 
setts ;  and  that  although  choses  in  action  could  not  be 
attached  or  levied  upon  in  New  York,  yet  after  execution 
issued  on  the  judgment  at  law,  such  interests  might  be 
reached  by  supplementary  proceedings  ;  while  in  Massa- 
chusetts these  kinds  of  rights  were  subject  to  trustee 
process.  The  court  said  that  the  assignment  having  been 
found  by  the  judge,  before  whom  the  case  was  tried  with- 
out a  jury,  to  have  been  made  in  fraud  of  the  plaintiff,  as 
a  creditor  of  the  assignor,  and  being"  under  the  law  of 
either  State  voidable  by  creditors  in  some  form  of  judicial 
process,  the  question  whether  it  should  be  relieved 
against  on  the  common-law,  or  on  the  equity  side  of  the 
court,  was  a  question  of  remedy  only,  and  governed  by 
the  lex  foi'i.x  It  may  be  observed  that  the  general  rule 
that  the  lex  fori  governs  the  remedy  controls  the  right  to 
arrest  the  debtor.  Thus  where  goods  were  sold  in  New 
York  on  credit  to  parties  who  transacted  business  in 
Alabama,  and  the  debtors  subsequently  disposed  of  their 
property  in  the  latter   State  with  intent  to  defraud  their 


'  (Jlafflin    v.    McDermott,    12    Fed.  4  In  the  case  of  a  sale  of  horses  and 

Rep.  375,    20  Blatchf.  522.  mules   that   took   place   in  Virginia, 

2  Kinsley  v.  Scott,  58  Vt.  420 ;  Mer-  where  the    stock   was    subsequently 

chants'  Bank  v   Thompson,  55  X.    Y.  sent  to  Pennsylvania  for   pasturage, 

11  ;  Lewis   v.    Smith,    '.)   N.   Y.     51  t  ;  and  was  there  seized  on  a  foreign  at- 

Ruyter  v.  Reid,  121   N.  Y.  50:>,  24  N.  tachment  against  the  vendor,  it  was 

E.  Rep.  791.  held  that  the  validity  of  the  transfer 

8 Drake  v.  Rice,  130    Mass.   IK!.    See  must  he  tested  by  the  lawsof  Virginia. 

§  17.  Born  v.  Shaw,  29  Pa.  St.  288. 


§64  REMEDY    GOVERNED    BY    LEX    FORI.  123 

creditors,  the  New  York  Supreme  Court  held  that  an 
order  of  arrest  was  properly  issued  against  the  defendants 
by  that  court1  In  Pritchard  v.  Norton,2  the  court  said  : 
"  The  principle  is  that  whatever  relates  merelv  to  the 
remedy,  and  constitutes  part  of  the  procedure,  is  deter- 
mined by  the  law  of  the  forum,  for  matters  of  process 
must  be  uniform  in  the  courts  of  the  same  country;  but 
whatever  goes  to  the  substance  of  the  obligation,  and 
affects  the  rights  of  the  parties,  as  growing  out  of  the 
contract  itself,  or  inhering  in  it  or  attached  to  it,  is  gov- 
erned by  the  law  of  the  contract."3  It  is  foreign  to  the 
scope  of  this  treatise  to  discuss  at  length  the  question  of 
how  far  a  transfer  of  personal  property,  which  is  lawful  in 
the  owner's  domicil,  will  be  respected  in  the  courts  of  the 
country  where  the  property  is  located,  and  where  a  dif- 
ferent rule  as  to  transfer  prevails.  This  is  a  question 
upon  which  the  courts  are  much  at  variance.  It  must  be 
remembered  that  there  is  no  absolute  right  to  have  such 
a  transfer  respected  in  the  foreign  forum,  and  it  is  only 
on  a  principle  of  comity  that  it  is  ever  allowed.  And  this 
principle  of  comity  always  yields  in  cases  where  the  laws 
and  policy  of  the  State  in  which  the  property  is  located 
have  prescribed  a  different  rule  of  transfer  from  that  of 
the  State  in  which  the  owner  lives.4      The  general  rule 


'Claflin  v.  Frenkel,  3  Civ.  Pro.  (N.  S.  652,  13  S.  C.  Rep.  466;  Metcalf  v. 

Y.)  109;  Brown  v.  Ashbough,  40  How.  Watertown,  153  U.  S.   073,  14   S.  C. 

Pr.  (N.  Y.)  226.    See  §  191.    A  fraud-  Rep.  947. 

ulent  disposition  of  property  in  Penn-  4  Green  v.  Van  Buskirk,  7  Wall. 
sylvania  may  be  made  the  subject  of  151,  reversing  mb  nomine,  Van  Bus- 
attachment  in  New  York.  Kibbe  v.  kirk  v.  Warren,  4  Abb.  App.  Dec.  1  N . 
Wetmore,  31  Hun  (N.  Y.)  424.  Y.)  457.    Compare  Guilhmder  v.  Eow- 

2 106  U.  S.  129  ;  Coghlan  v.  South  ell,  35  N.  Y.  657  ;  Ockerman  v.  Cross, 

Carolina  R.  R.  Co.,  142  U.  S.   109,  12  54  N.  Y.  29;  Howard  Nat.  Bank,   v. 

S.  C.  Rep.  150.  King,   10  Abb.  N.  C.    (N.    Y.)    346; 

3See    McDougall  v.   Page,   55  Vt.  People  ex rel.  Hoyt  v.  Commissioners 

187,    28  Alb.  L.J.  372;  Great  West-  of  Taxes,   23  N.    V.  235;   Chafee  v. 

ern  Tel.  Co.  v.  Burnham,  162  U.  S.  Fourth  Nat.  Bank,    71   Me.    514,  and 

339,  16  S.  C.  Rep.  850,  and  cases  cited,  cases  cited  in  the  arguments  of  counsel. 

Compare  Bauserman  v.  Blunt,  147  U.  See,  also,  Matter  of  Dalpay,  41  Minn. 


124  CUMULATIVE    REMEDIES.  §  65 

that  a  voluntary  transfer  of  personal  property,  where- 
soever situated,  is  to  be  governed  by  the  law  of  the 
owner's  domicil,  always  yields  where  the  policy  of  the 
State  where  the  property  is  actually  located  has  pro- 
vided a  different  rule  of  transfer.1 

§  65.  Cumulative  remedies  allowed  and  disallowed.  —  We 
have  disclaimed  the  consideration  of  fraud  in  the  li^ht  of 
a  crime,"  and  entertain  no  design  of  noticing  the  penal 
statutes  enacted  for  the  punishment  of  fraudulent  insol- 
vents or  their  co-conspirators.  This  subject  more  legiti- 
mately appertains  to  a  treatise  on  criminal  law,3  and  is  a 
matter  regulated  by  statute,  Sometimes  resort  to  the 
penal  statutes  conflicts  with  the  pursuit  of  the  civil  rem- 
edy. In  a  controversy  which  arose  in  Maine  it  was  de- 
cided that  one  who  had  commenced  an  action  to  recover 
the  penalty  provided  by  the  Revised  Statutes4  of  that 
State,  for  knowingly  aiding  a  debtor  in  the  fraudulent 
transfer  of  his  property  to  secure  it   from  the  creditors, 


532,  43  N.  W.  Rep.  564.  As  to  real  O'Neil,  44  N.  Y.  301  ;  Monroe  v.  Doug- 
property  the  rule  seems  to  be  that  the  lass,  5  N.  Y.  447.  In  Barnett  v.  Kin- 
validity  of  the  transfer  must  be  ney,  147  U.  S.  476,  an  assignment 
judged  by  the  law  of  the  State  where  with  preferences  made  by  one  citizen 
the  land  was  situated.  So  a  mort-  of  Utah  to  another,  valid  by  the  laws 
gage  on  land  situated  in  Maine  to  of  Utah,  was  held  to  be  valid  in  Idaho 
secure  an  antecedent  indebtedness,  against  an  attaching  creditor  as  to 
valid  by  the  laws  of  Maine,  was  up-  property  in  Idaho,  of  which  the 
held  in  Massachusetts,  although  not  assignee  had  taken  possession,  though 
authorized  by  the  laws  of  that  State.  the  statutes  of  Idaho  prohibited  as- 
Chipman  v.  Peabody,  159  Mass.  420,  signments  containing  preferences. 
34  N.  E.  Rep.  563.  There  is  See  Frank  v.  Bobbitt.  155  Mass.  112, 
do  presumption  that  the  common-  29  N.  E.  Rep.  209. 
law  prevails  in  Russia  (Savage  v.  'Keller  v.  Paine,  107  N.  Y.  83,13 
O'Neil,  44  N.  Y.  300)—  a  presumption  N.  E.  Rep.  635. 
of  its  existence  is  indulged  in  by  the  2  See  §3. 

courts  only  in  reference  to  England  3  An  indictment  alleging  the  mak- 

and  the  States  which  have  taken  the  ing  of    a  fraudulent  conveyance  is 

common  law.    [n  the  absence  of  proof  sufficient  where  its  recitals  charge  the 

of  the   foreign    law,   the  law  of   the  language  of    the  statute.      State   v. 

forum  must  furnish  the  rule  for  the  Miller,  98  Ind.  70. 

guidance  of  the  court.      Savage   v.  *  Chap.  118,  §  51. 


§  6$  CUMULATIVE   REMEDIES.  1 25 

waived  his  right  to  prosecute  his  suit  by  filing  a  petition 
against  his  debtor  and  having  him  declared  a  bankrupt, 
and  then  causing  a  suit  to  be  commenced  against  the 
alleged  fraudulent  transferee  by  the  assignee  in  bank- 
ruptcy, to  recover  the  value  of  the  property  alleged  to 
have  been  fraudulently  transferred.1  As  to  civil  reme- 
dies it  was  decided  in  Michigan  that  where  a  judgment- 
creditor  had  elected  to  treat  as  fraudulent  a  conveyance 
made  by  his  debtor  before  the  judgment,  and,  notwith- 
standing the  transfer  of  title,  had  proceeded  to  sell  the 
property  on  an  execution,  he  could  not  afterward  main- 
tain a  bill  in  equity  to  set  aside  the  conveyance.2  The 
logic  of  this  ruling  is  scarcely  apparent.  Again,  a  credi- 
tor who  has  instituted  an  action  at  law  for  the  recovery 
of  a  debt,  and  levied  an  attachment,  cannot,  before  judg- 
ment, bring  a  second  suit  to  recover  the  debt,  annul  an 
alleged  fraudulent  judgment  recovered  against  the  debtor 
and  restrain  its  collection.3  In  New  York,  on  the  other 
hand,  a  complainant  may  institute  supplementary  pro- 
ceedings and  prosecute  a  suit  to  establish  his  judgment 
as  a  lien  upon  real  estate  ;  he  may  prosecute  either  or 
both  proceedings  until  his  judgment  is  satisfied.4  So  he 
may  bring  a  creditor's  action  to  remove  a  cloud  upon 
title,  and  also  sell  the  debtor's  land  under  execution.5 
And  in  Massachusetts  a  remedy  is  given  by  statute,0 
which  enables  a  creditor  to  maintain  a  bill  to  reach  any 
property  of  a  debtor  liable  to  be  attached  or  taken  on 
execution  in  a  suit  at  law  and  fraudulently  conveyed. 
Before  that  statute  a  creditor  could  reach  property  fraud- 


1  Fogg  v.  Lawry,  71  Me.  215.  (N.  Y.)  551  ;   Schloss   v.    Wallach,  16 

2  Crimson   v.   Smith,   47  Mich.  647.  Abb.  N.  C.  (N.  Y.)  319n,  38  Hun  (N. 
But  see  Erickson  v.   Quinn,   15  Abb.  Y.)  638,  affi'd  102  N.  Y.  683. 

Pr.  N.  8.  (N.  Y.)  168.  5  Erickson  v.   Quinn,    15    A.DD.    Pr 

3  Mills  v.    Block,   30    Barb.   (N.  Y.)  N.  S.  (X.  Y.)  166. 

549.     See  §85.  6  Public  Statutes,  Ch.  151,  § 3. 

4  Gates  v.  Young,   17  Weekly   Dig. 


126  EFFECT    OF    IMPRISONMENT   OF   DEBTOR.         §§66,  67 

ulently  conveyed  by  attachment  and  execution.  The 
statute  gave  him  a  concurrent  remedy  in  equity  to  enforce 
the  same  right,  without  having  previously  recovered  a 
judgment  at  law,  and  without  admitting  other  creditors 
to  join  in  prosecuting  the  suit.1  It  was  decided  that  this 
remedy  was  not  superseded  by  the  grant  of  general  equity 
powers.2 

§  66.  Effect  of  imprisonment  of  debtor.  —  It  may  be  con- 
sidered as  settled  law  that  while  the  creditor  has  the  body 
of  the  debtor  in  execution  on  a  ca.  sa.  his  right  to  pro- 
ceed against  propertv  is  suspended.3  So  long  as  the  de- 
fendant is  in  custody  the  creditor  cannot  file  a  bill  in 
chancery  to  reach  his  equitable  assets.4  This  rule  pro- 
ceeds upon  the  theory  that  the  arrest  and  imprisonment 
of  the  debtor  constitute  a  satisfaction  of  the  judgment 
during  the  continuance  of  the  imprisonment.5  When 
the  constructive  imprisonment  is  terminated  by  operation 
of  law,  the  creditor's  remedy  is  no  longer  suspended.6 

^67.  Election  of  remedies.  —  In  Cone  v.  Hamilton,7  the 
Supreme  Court  of  Massachusetts  said  it  had  been  decided 
in  that  State  that  levies  of  executions  in  favor  of  creditors 
passed  no  title  where,  at  the  time  of  the  conveyance  (which 
was  before  the  Stat,  of  1844,  c.  107,  took  effect),  there  was 
no  statute  by  which  land  paid  for  and  occupied  by  a  debtor, 
the  legal  title  to  which  had  never  been  in  him,  but  had 
been  conveyed  by  his  procurement  to  other  persons  in 
order  to  secure  it  from  his  creditors,  could  be  attached  or 


'Bernard   v.  Barney  Myroleum  Co.,  5  Koenig  v.  Steckel,  58  N.  Y.  475  ; 

147  Mass.  356,  17  N.  E.  Rep.  887.  Bowe  v.  Campbell,  63  How.   Pr.  (N. 

Barry  v.  Al.l.ot.  100  Mass.  396.  Y.)  170;  Ryle  v.  Falk,  24  Hun  (N.  Y.) 

3  See  Flack  v.  State  of  New  York,  2.">.     Compare,  especially,  Kasson  v. 

95  N.  Y.  469.  People.  44  Barb.  (N.  Y.)  347. 

*  Stillwell  v.  Van  Epps,  1  Paige  (N.  "Sandman   v.  Seaman,  84  Hun  (X. 

,      615;  Tappan   v.   Evans,   11  N.  H.  Y.)  337,  32  N.  Y.  Supp.  338. 

321;  King  v.  Trice,  3  [red.  Eq.  (N.  C.)  7  102  .Mass.  57. 
573. 


§6?  ELECTION   OF   REMEDIES.  I  27 

taken  on  execution  at  law  as  his  property.1  Gray,  }., 
continuing,  said  :  "  Upon  this  state  of  facts,  either  of 
two  remedies  was  opened  to  the  judgment-creditors. 
The  conveyance  being  fraudulent  as  against  them,  the 
parties  who  took  the  legal  title  (though  not  participating 
in  the  fraud),  paying  no  consideration  for  the  conveyance, 
and  the  equitable  title  being  in  the  debtor  who  paid  the 
purchase-money,  the  judgment-creditors  might  doubtless 
have  maintained  bills  in  equity  to  charge  the  land  with 
their  debts.2  Or,  it  appearing  that  the  land  cannot  be 
held  under  their  levies,  they  might  by  scire  facias,  have 
obtained  new  executions  on  the  original  judgments.3  It 
does  not,  however,  follow  that  this  bill  can  be  maintained 
in  its  present  form.  The  plaintiff  has  acquired  no  inter- 
est in  those  judgments,  or  in  the  debts  on  which  they 
were  recovered.  The  only  transfers  from  the  judgment- 
creditors,  under  which  she  claims  are  quit-claim  deeds, 
without  covenants  of  warranty,  of  the  land  taken  on 
execution,  which,  as  the  grantors  had  no  title,  passed 
none.  Those  creditors  are  not  made  parties  to  this  suit, 
either  as  plaintiffs  or  defendants,  and  would,  therefore,  be 
at  liberty,  notwithstanding  any  decree  therein,  to  pursue 
their  remedy  by  scire  facias  against  their  debtor.  It 
would  be  inconsistent  with  the  principles  and  the 
practice  of  courts  of  equity  to  maintain  this  bill,  upon  the 
ground  that  the  original  conveyance  was  fraudulent  and 
void  as  against  the  judgment-creditors,  without  making 
them  parties  to  the  suit  in  due  form."  It  may  be  further 
observed  that  a  judgment-creditor  is  not  obliged  to  follow 
all    the    fraudulent   conveyances   which   may   have   been 


1  Hamilton  v.  Cone,  99  Mass.  478.  Johns  Ch.  (N.  Y.)  450  ;   Lynde  v.  Mc- 

3Huguenin    v.  Baseley.  14  Ves.  273;      Gregor,  13  Allen  (Mass.)  182. 

Neate   v.   Marlborough,  3   Myl.  &  Cr.  3  Dennis   v.  Arnold,  12  Met,  (Mass.) 

407;  Goldsmith   v.  Russell,  5   DeG.,      449;     Dewing   v.    Durant,    10    Gray 

M.  &  G.  547  ;  Bayard  v.    Hoffman,   4      (Mass. )  29  ;    Gen.  Stats,   of  Mass.    c 

103,  &22. 


[28  creditors'  bills.  §68 

made  by  several  execution  defendants,  but  may  leave 
some  of  them  to  stand  while  he  seeks  to  set  aside 
others  ;:  nor  can  the  debtor  or  the  fraudulent  alienee,  as 
a  general  rule,  compel  the  creditor  to  elect  which  method 
of  procedure  or  class  of  property  he  will  pursue.2  But 
after  a  creditor  has  made  his  election  between  two  incon- 
sistent remedies,  he  is  bound  by  it.  So  it  was  held 
that  a  judgment-creditor  who  had  sold  on  execution 
the  equity  of  redemption,  belonging  to  his  debtor,  could 
not  afterwards  bring  an  action  to  set  the  mortgage  aside 
as  fraudulent.3  The  same  rule  applies  when  he  sells 
simply  all  the  debtor's  right  and  title.  In  such  case  the 
right  to  attack  the  existing  mortgage  as  fraudulent  passes 
to  the  purchaser  on  such  sale.* 

§  68.  Creditors'  bills.  —  It  is  said  in  New  York,5  that 
the  object  of  a  creditor's  bill  in  that  State6  is  to  reach 
choses  in  action  and  equitable  assets  of  the  judgment- 
debtor  which  cannot  be  reached  by  execution.  And, 
before  such  a  bill  can  be  filed,  it  is  always  necessary  that 
an  execution  should  be  issued  to  the  county  where  the 
judgment-debtor   resides,7   and  be  returned  unsatisfied;8 


1  First     Nat.    Bank   v.    Hosmer,    48  of  creditors,    may    be  readied    !>\    a 

Mich.   200,  12  N.  W.  Rep.  212;  Miller  creditor's  bill;  a  remedy   which  may 

v.  Dayton,  4?  Iowa,  312.  be  considered  as  having  originated  in 

'Gray  v.  Chase,  57  Me.  558  :  Vasser  the  case  of  Spader  v.  Davis  (5  Johns. 

v.  Henderson,  40  Miss.  519  ;  Edmunds  Ch.  [N.  Y.]  280,  decided  by  Chancellor 

V.  Mister,    58  Miss.   TOO  ;    Baker  v.  Ly-  Kent)  in  the  year  1*21.  and  winch  has 

man,  53  Ga.  339.  been  very  extensively  employed  since 

»Knoop   \.   Kelsey,  102  Mo.  291,  14  that  time" 

8.W.  Rep.  110;  Messmore  v.  Buggard,  6See  2  R.  S.  171  ;  2  Barb.  Ch.  Pr. 

40  Mich.  ."-VJ,  0  N.  W.  Rep.  853.  147. 

'Knoop   %•.  Kelsey,  121  Mo.   642,20  'Compare    Wadsworth  v.  Schissel- 

S.  W.  Rep.  683.  bauer,   32  Minn.    87,    19  N.  W.   Rep. 

Kmx    v.  Moyer,  54  N.  Y.  128.    Mr.  890  ;  Northwestern  Iron  Co.  v.  Central 

Bispham    Bays,  in   his  Principles    of  Trust  Co.,  90  Wis.  570, 63  N.  W.  Rep. 

Equity,    ;'    346:     "In     many    of    the  752,  64  Id.  828. 

States,  property  of  an  equitable  char-  h<  'ompare  the    llolladay  Case,  27 

acter,  and  property  conveyed  in  fraud  Fed.  Rep.  845. 


§  68  CREDIT"  >RS'    BILLS. 

and  in  such  an  action  all  the  judgment-debtors  arc  neces- 
sary parties,  unless  it  can  be  shown  that  one  omitted  is 
insolvent  or  a  mere  surety  for  the  defendant.  The  filing 
of  a  creditor's  bill,  and  the  service  of  process,  as  we  have 
said,1  creates  a  lien  in  equity  upon  the  effects  of  the  judg- 
ment-debtor.2 It  has  been  aptly  termed  an  "equitable 
levy."3  It  maybe  here  observed  that  a  creditor's  bill,  in 
many  of  our  States,  is  an  appropriate  remedy  to  annul  a 
conveyance  in  fraud  of  creditors.  It  ought  always  to  be 
resorted  to  where  this  latter  relief  is  desired.  "  A  creditor's 
bill  is  the  continuation  of  the  former  controversy,  so  far 
as  the  fruits  of  the  judgment  are  concerned.  The  com- 
plainant asks  the  aid  of  the  court  to  reach  the  assets  of 
the  defendant,  so  as  to  be  made  liable  to  his  judgment, 
which  assets  have  been  secreted  or  fraudulently  assigned 
to  defeat  the  judgment."  4  Usually  creditors'  bills  are 
largely  regulated  by  statute,  and  the  relief  extended  is 
often,  in  a  measure,  dependent  upon  the  local  laws  gov- 
erning the  subject.  It  may  be  asked  in  what  respects  a 
creditor's  bill  differs  from  an  ordinary  bill  in  equity,  pro- 
secuted to  cancel  a  covinous  conveyance  or  remove  a 
fictitious  transfer.  The  answer  is  that  the  creditor's  bill, 
at  least  in  some  States,  is  broader  and  more  effectual  in  its 
operations  and  results.  The  ordinary  bill  or  suit  in  equity 
is  generally  brought  to  unravel  some  particular  transac- 
tion, and  to  annul  some  particular  conveyance,  or  remove 


1  See  §  61.  25  Barb.  (N.  Y.)  662  :  I  ieorge  \ .  Wil 

2  Per  Swayne,  J.,  in  Miller  v.  liamson,  26  Mo.  190;  State  v.  Bowen, 
Sherry,  2  Wall.  249.  Citing  Bayard  38  W.  Va.  91,  is  S.  E.  Rep.  375; 
v.  Hoffman,  4  Johns.  Ch.  (N.  Y.)  450  ;  Sweeny  v.  Grape  Sugar  Refining 
Beck  v.  Burdett,  1  Paige  (N.  Y.  308;  Co.,  30  W.  Va.  443,  I  S.  E.  Rep.  431; 
Storm  v.Waddell,  2Sandf.  Ch.  (N.Y.)  First  Nat.  B'k  v.  Shuler,  L53  NY.  I  12. 
494;  Corning  v.  White,  2  Paige  (N.  3Tilford  v.  Burnham,  3  Dana(Ky.) 
Y.)  569  ;  Edgell  v.  Haywood,  2  Atk.  110  ;  Miller  v.  Sherrj  .  2  Wall.  J  r.». 
352.  See  Brown  v.  Nichols,  42  N.  Y.  4Hatch  v.  Dorr,  l  McLean  113 ; 
26;  Lynch  v.  Johnson,  48  N.  Y.  33;  Havi,ls.»n  v.  Burke,  143  111.  139,  32  X. 
Roberts  v.  Albany  &  W.  S.  R.  R.  Co.,  E.  Rep.  511. 

9 


130 


CREDITORS     BILLS. 


68 


a  specific  cloud  on  a  particular  title.1  A  creditor's  bill, 
on  the  other  hand,  is  usually  in  the  nature  of  a  bill  of  dis- 
covery,2 and  is  more  extended  in  its  results  ;  not  only  does 
it  reach  property  described  therein,  but  by  means  of  this 
form  of  remedy  every  species  of  assets,  and  even  debts 
due  the  debtor  of  which  the  creditor  knew  nothing, 
and  which  were  not  referred  to  in  the  bill,  may 
be  reached  through  the  instrumentality  of  a  receiver, 
and  applied  to  the  claim.  For  this  reason  it  is  appro- 
priately called  an  omnibus  bill.3      "  Creditors'  bills,"  says 


1  See  Brown  v.  Nichols,  42  N.  Y. 
26  ;  Lynch  v.  Johnson,  48  N.  Y.  33  ; 
Roberts  v.  Albany  &  W.  S.  R.  R.  Co., 
25  Barb.  (N.  Y.)  662;  George  v.  Wil- 
liamson, 26  Mo.  1S»0. 

2  See  Newman  v.  Willetts,  52  111  101. 

3  In  Conro  v.  Port  Henry  Iron  Co. 
(12  Barb.  [N.  Y.]  58),  the  court  said  : 
"  There  are  two  sorts  of  creditor's  bills 
known  to  our  jurisprudence;  the  one  is 
the  statutory  bill,  framed  under  2  R.  S. 
173,  in  aid  of  a  judgment-creditor  who 
has  exhausted  his  remedy  at  law,  to 
enable  him  to  discover  the  debtor's 
property,  and  to  reach  his  equitable  in- 
terests. This  bill  was  known  before 
the  statute.  (Hadden  v.  Spader,  20 
Johns.  [N.  Y.]  554.)  And  the  statute 
was  framed  to  aid  in  carrying  out  the 
principle  of  that  and  other  like  deci- 
sions. In  proceedings  under  such  bill, 
it  had  always  been  held  that  several 
creditors,  by  judgment,  of  the  same 
debtor,  might  unite  in  the  action, 
though  they  had  no  other  common  in- 
terest  than  in  the  relief  sought.  (Ed- 
meston  v.  Lyde,  1  Paige  [N.  Y.]  637  ; 
Wakeman  v.  Grover,  4  Paige  [N.  Y.] 
23.)  All  the  judgment-creditors  were 
proper  parties,  though  not  necessary 
parties,  because  the  action  could  nol  be 

ii  itained  by  n  single  judgment-cred- 
itor. The  same  ruleexisted  before  I  he 
statute,  and  was  applied  in  a  creditor's 


suit  by  Chancellor  Kent  in  McDermutt 
v.  Strong  (4  Johns.  Ch.  [N.  Y.]  687). 
The  other  class  of  creditors'  suits,  not 
depending  upon  any  statute,  are  suits 
brought  for  the  administration  of  as- 
sets, to  reach  property  fraudulently 
disposed  of,  or  held  in  trust,  etc.  The 
bill  in  such  case  is  filed  in  behalf  of  the 
plaintiff  or  plaintiffs,  and  all  others 
standing  iu  a  similar  relation,  who  may 
come  in  under  such  bill  and  the  decree 
to  be  made.  It  may  be  filed  by  simple 
contract  creditors;  and  does  not  re- 
quire a  judgment  to  have  been  ob- 
tained. (Barb.  Chan.  Prac.  vol.  II,  p. 
149)."  In  Fusze  v.  Stern,  17  Bradw. 
(111.)  432,  the  court  said  :  "  There  are 
several  kinds  of  original  bills  known 
to  our  laws,  wherein  courts  of  equity 
entertain  jurisdiction  to  aid  a  creditor 
in  obtaining  satisfaction  of  his  claim 
from  his  debtor,  and  which  are  gen- 
erally denominated  creditors'  bills, 
not  only  by  the  members  of  the  legal 
profession,  but  by  the  courts  as  well, 
as  where  a  debtor  seeks  to  satisfy  his 
debt  out  of  some  equitable  estate  of 
the  defendant  which  is  not  subject  to 
levy  and  sale  under  an  execution  at 
law  ;  then  before  be  can  have  the  aid 
of  a  <<>mt  of  equity  to  decree  the 
cqiiifiibfc  estate,  subject  to  the  pay- 
ment of  his  debt,  the  creditor  must 
show  by  his   bill,  as  in  other  cases 


68 


CREDITORS      BILLS. 


131 


Mr.  Bispham,1  "  are  bills  filed  by  creditors  for  the  pur- 
pose of  collecting  their  debts  out  of  the  real  or  personal 
property  of  the  debtor,  under  circumstances  in  which  the 
process  of  execution  at  common  law  could  not  afford 
relief.  This  equitable  remedy  may  be  made  use  of  dur- 
ing the  life-time  of  the  debtor,  or  after  his  death.  Cred- 
itors'  bills   filed   against   the  estate  of  a  decedent,  gen- 


where  invoking  equitable  jurisdiction, 
that  he  has  no  adequate  remedy  at 
law,  which  can  only  be  shown  by  al- 
leging and  proving  that  he  has  ex- 
hausted all  the  means  provided  by  the 
law  for  the  collection  of  his  debt,  viz., 
a  recovery  of  judgment,  the  issuing 
of  execution,  and  its  return  nulla 
bona  by  the  officer  charged  with  its 
collection.  A nother  kind  of  bill  analo- 
gous to  this  is  where  the  creditor,  hav- 
ing recovered  judgment  against  his 
debtor,  seeks  to  remove  a  fraudulent 
conveyance  or  incumbrance  out  of 
the  way  of  an  execution  issued  or  to 
be  issued  upon  such  judgment.  In 
such  case  equity  will  afford  relief  on 
the  ground  that  such  judgment  is  an 
equitable  lien  upoii  real  estate,  nomi- 
nally held  by  a  third  party  under  such 
fraudulent  conveyance,  and  the  cred- 
itor having  this  lien  is  entitled  to  levy 
upon  and  sell  upon  his  execution  such 
real  estate  discharged  and  untram- 
meled  from  the  cloud  upon  it  caused 
by  such  conveyance.  In  bills  of  this 
kind  the  complainant  need  not  even 
prove  the  return  of  execution  nulla 
bona,  as  such  conveyances  are  void  by 
the  statute,  and  courts  of  equity  do 
not  hesitate  to  declare  them  void  be- 
cause of  such  fraud,  and  place  the 
creditor  in  the  same  position,  respect- 
ing his  judgment,  that  he  would  have 
occupied  if  such  conveyance  had  not 
been  made.  A  recovery  of  a  judg- 
ment which  atTtime  of  filing  the  bill 


would,  in  absence  of  such  conveyance, 
be  a  legal  lien  under  the  statute  upon 
the  land,  is  all  that  is  necessary  to 
aver  and  prove."  Citing  Miller  v. 
Davidson,  8  111.  518;  Weigtman  v. 
Hatch,  17  111.  281  ;  Shufeldt  v.Boehm, 
96  111.  561.  See  also  McKenna  v.  Crow- 
ley, 16  R.  I.  364, 17  Atl.  Rep.  354.  Mr. 
Bispham  says,  in  Principles  of  Equity, 
§  527:  "The  threefold  advantage  of 
reaching  property  otherwise  exempt, 
of  setting  aside  fraudulent  convey- 
ances, and  of  discovery,  renders  a 
creditor's  bill  a  very  effective  instru- 
ment for  the  collection  of  debts." 
Creditors'  bills  are  much  used  against 
insolvent  corporations  where  the  capi- 
tal stock  is  treated  as  a  trust  fund. 
See  Sawyer  v.  Hoag,  17  Wall.  610  ; 
Sanger  v.  Upton,  61  U.  S.  56  ;  Hol- 
lins  v.  Brierfield  Coal  &  Iron  Co.,  150 
U.  S.  381  ;  Hatch  v.  Dana,  101  U.  S. 
205  ;  County  of  Morgan  v.  Allen,  103 
TJ.  S.  498;  Crandall  v.  Lincoln,  52 
Conn.  73  ;  Terry  v.  Anderson,  95  U. 
S.  628,  636  ;  Clark  v.  Bever.  139  U. 
S.  110 ;  Fogg  v.  Blair,  139  U.  S.  125  : 
Messersmith  v.  Sharon  Savings  Bank, 
96  Pa.  St.  440 ;  Stone  v.  Chisolm,  113 
U.  S.  302,  5  S.  C.  Rep.  497.  Such  a 
bill  can  be  entertained  by  a  Federal 
court  by  virtue  of  the  jurisdiction  at- 
taching in  cases  of  fraud  and  inde- 
pendent of  any  statute.  Lewi-,  v. 
Shainwald,  48  Fed.  Rep.  492. 

1  Bispham's   Principles  of    Equity, 
§  525. 


132  DIRECT   AND    COLLATERAL   ATTACK.  §69 

erally,   though  not  necessarily,  partake  of  the  nature  of 
administration  suits." 

§  69.  Direct  and  collateral  attack.  —  Exceptional  doctrine  in 
Louisiana.  —  A  novel  principle  relating  to  covinous  con- 
veyances, derived  from  the  civil  law,  prevails  in  Louisiana. 
If  a  sale  is  fraudulent  as  to  creditors,  it  must  be  regularly 
set  aside  in  a  direct  action  or  proceeding  instituted  for 
that  purpose.  Not  only  is  it  binding  between  the  original 
parties,  which  is  the  universal  rule,1  but  it  is  conclusive 
upon  third  parties  until  nullified  by  the  form  of  action 
which  the  law  provides,  and  the  possession  of  the  vendee 
is  legal  until  the  fraudulent  instrument  is  avoided  in 
the  due  course  of  law.2  The  reasons  for  this  practice 
are  ingeniously  given  in  Peet  v.  Morgan,3  by  Porter,  J., 
who  there  says  :  "  Of  its  correctness  the  court  enter- 
tains no  doubt.  It  is  clearly  supported  by  authority, 
and  it  is  sanctioned  by  reason  and  utility.  The  principle 
on  which  it  rest  is,,  that  men  are  presumed  to  act 
honestly  until  the  contrary  is  proved  ;  that  the  con- 
veyances alleged  to  be  fraudulent  are  prima  facie  cor- 
rect and  fair  ;  and  that  it  is  improper  in  opposition  to  these 
presumptions,  the  creditor  should  exercise  rights  that 
could  only  properly  belong  to  him,  in  case  the  acts  of  his 
debtor  were  null  and  of  no  effect.  In  many  instances, 
should  a  contrary  doctrine  prevail,  sales  which  were  alleged 
fraudulent  might  turn  out  to  be  bona  fide,  and  the  pur- 
chaser be  deprived  of  the  use  and  enjoyment  of  property 
which  was  honestly  his.  In  the  uncertainty  which  must 
prevail  until  the  matter  undergoes  a  judicial  investigation, 


'  Sir  1  lhap.  XXVI.  missioners,  7  Rob.  (La.)  234 ;  Presas  v. 

2  Yocum  v.  Bullit,  6    Mart.   N.   S.  Lanata,  11  Rob.  (La.)  288 ;  Collins  v. 

(La.)  334,  17   Am     Dec.  184,  and  the  Shaffer,    20    La.    Ann.    41;    Payne 

learned  note  of    \.  < '.  Freeman,  Esq.  v.  Graham,  23  La.  Ann.  771  ;  Ford  v. 

s.-c  Barbarin  v.  Saucier,  5  Mart.  N.S.  Douglas,  5  How.  160. 
(La.)  361;    I."   Goaster    v.    Barthe,   2         :;  0  Mart.  X.  S.  (La.)  1:57. 
Rob.  (La.)  388 ;  Drumrnond  v.  Com- 


§69  DIRECT  AND   COLLATERAL  ATTACK.  I  33 

it  is  certainly  the  wisest  course,  and  the  one  most  con- 
ducive to  general  utility,  to  consider  the  thing  sold  as 
belonging  to  him  in  whom  the  title  is  vested."  It  is  idle 
to  speculate  as  to  the  utility  of  this  doctrine,  for  it  is  en- 
tirely opposed  to  the  general  practice  in  the  other  States, 
and  'to  the  English  and  American  authorities.  The 
fraudulent  transfer  is  not  generally  regarded  as  being 
effectual  against  creditors  ;  it  does  not  as  to  them  divest 
the  debtor's  title,  but  his  interest  remains  subject  to  their 
remedies,  and  may  be  seized  and  sold  on  execution.1 
The  property  may  be  treated  and  reached  by  creditors  as 
though  the  transfer  had  never  been  made.2  Thus  in 
Imray  v.  Magnay,3  the  court  said  ;  "  It  is  now  of  fre- 
quent occurrence  that  the  sheriff  is  bound  to  take  goods 
which  have  been  fraudulently  conveyed  or  assigned  to 
defeat  creditors,  and  is  responsible  in  an  action  for  a 
false  return  at  the  suit  of  a  creditor."  Though  the  prin- 
ciple embodied  in  these  Louisiana  cases  may  seem  logical 
and  fair  upon  its  face,  certainly  its  practical  operation 
would  not  be  commensurate  with  the  needs  of  creditors 
generally.  The  creditor  cannot  be  expected  to  lay  for- 
mal siege  to  every  semblance  of  an  obstruction  that  the 
debtor  rears  in  his  pathway.  The  theory  concerning  a 
fraudulent  conveyance  is  that  it  has  only  the  color  and 


1  Jacoby's  Appeal,  67  Pa.  St.  434  ;  4  Col.  595  ;  citing  Jackson  v.    Myers, 

Hoffman's    Appeal,    44    Pa.    St.    95 ;  11   Wend,    (N.    Y.)   535  ;  Jackson    v. 

Russell  v.  Dyer,  33  N.  H.186;  Allen  v.  Bnrgott,  10  Johns.  (N.  Y.)  456  ;  Rem- 

Berry,  50  Mo.  90  :  Ryland  v.  Callison,  ington    v.     Linthicum,    14    Pet.    84; 

54   Mo.    513;    Fowler   v.   Trevein,  16  Rogers  v.  Brent,  10  111.580;  Jamison 

Ohio  St;  493  ;  Staples  v.  Bradley,  23  v.  Beaubien,  4111.  114  ;  Baze  v.  Arper, 

Conn.    167  ;    Foley  v.  Bitter,  34   Md.  6  Minn.  220  ;  Cook  v.   Swan,  5  Conn. 

646  ;  Gormerly  v.   Chapman,    51  Ga.  140  ;  Marcy  v.  Kinney,  9  Conn.  397 ; 

421;  Freeman  on  Executions,  §  136.  Lillie  v.  Wilson,    2  Root  (Conn.)  517. 

"  In  an  action  of  ejectment  it  is  com-  -Russell  v.   Winne,  37  N.  Y.    591; 

petent  to  show  that  a  conveyance  re-  Brown  v.  Snell,  46  Me.  490  :  Booth  v. 

lied  upon  by  one  of  the  parties  to  the  Bunce,  33  N.  Y.  139  ;    Angier  v.   Ash, 

action  was   made  with  intent  to  de-  26  N.  H.  99. 

fraud  creditors."    Knox  v.  McFarran,  311  M.  &.  W.  267. 


134  CASES   OF    FRAUD   ON   WIFE.  §  70 

appearance  of  a  valid  act,  and  is  not  in  itself  effectual ; 
why  then  should  the  creditor  be  forced  to  undergo  the 
vexatious  delay  and  expense  incident  to  procuring  a 
formal  adjudication  vacating  every  covinous  alienation  of 
property  which  the  ingenuity  of  the  debtor  may  devise  ? 
If  the  transfer  is  in  fact  fraudulent,  then,  by  seizing  and 
selling  the  property  on  execution,  the  controversy  is 
practically  concluded  without  further  trouble  or  suit, 
and  the  fraudulent  alienee  will  not  be  rash  enough  to 
attempt  to  reclaim  it.  On  the  other  hand,  if  the  transfer 
is  bona  fide,  the  creditor  is  legally  accountable  for  the 
seizure.  If  the  creditor  unjustly  refuses  to  treat  the 
transfer  as  valid  the  purchaser,  if  it  relate  to  realty,  may 
hold  the  possession  and  defend  in  ejectment ;  while  if  it 
be  personalty,  he  may  recover  it  by  replevin  or  sue  in 
trover.  In  either  case,  if  the  vendee  claims  the  property, 
indemnity  would  be  exacted  by  the  officer  making  the 
seizure.  Under  the  Louisiana  system  a  debtor,  by 
selecting  an  irresponsible  vendee,  could  shield  him  with 
a  simulated  transfer,  and  enable  him  to  dissipate  the 
property  in  practical  defiance  of  the  creditor. 

§  70.  Forms  of  relief  in  cases  of  fraud  on  wife.  —  Special 
treatment  of  the  relationship  of  husband  and  wife  as  bear- 
ing upon  fraudulent  transfers  will  be  found  in  the  body  of 
the  work.1  We  may  allude  here  to  the  rule  that  where  a 
husband  has  fraudulently  alienated  his  real  property,  as 
against  the  rights  of  his  wife  or  prospective  wife,  she  may, 
even  during  his  lifetime,  bring  suit  to  annul  the  deed  as 
a  fraud  upon  her  right  of  dower ;  ~  for  an  inchoate  right  of 
dower  is  an  interest  which  the  courts  will  protect.3  It  is 
as  much  a  fraud  for  a  man  to  place  his  property  out  of  his 


'See  Chap.  XX.  ;  Mills    v.   Van  Voorhies,  20  N.   Y. 

2  Youngs  v.  Carter,  10  Hun  (X.  Y.)  412;    Simar  v.   Canaday,  .53    N.    Y. 

194 ;  Petty  v.  Petty,  4  B.  Mon.  (Ky.)  293. 
210. 


§  yi  PROCEDURE   IN   FEDERAL   TRIBUNALS.  1 35 

hands  for  the  purpose  of  avoiding  the  right  of  dower 
which  is  about  to  attach  to  it,  as  it  is  for  a  debtor  who 
contemplates  the  contraction  of  debts  to  voluntarily  dis- 
pose of  his  property  in  order  to  defeat  the  efforts  of 
future  creditors  to  secure  their  payment.  The  latter 
result,  it  is  conceded,  as  elsewhere  shown,1  cannot  be  suc- 
cessfully accomplished.2  The  wife  may  in  such  cases 
maintain  a  bill  in  equity  to  reach  the  property  fraudu- 
lently conveyed,3  or  she  may,  according  to  some  of  the 
cases,  file  a  bill  in  chancery  to  recover  her  dower  in  the 
property  as  though  no  conveyance  had  ever  been 
executed.4 

§  71.  Procedure  in  Federal  tribunals.  —Statutes  passed  by 
State  legislatures  affecting  rights  of  creditors,  being  local 
enactments  and  involving  a  rule  of  property,  the  Federal 
courts  will  adopt  the  construction  which  has  been  given 
to  the  statutes  by  the  highest  judicial  tribunal  of  the 
State,5  even  though,  were  it  an  open  question  "  depend- 
ing upon  the  general  principles  of  jurisprudence,"  the 
conclusion  of  the  court  might  have  been  different.6  A 
Federal  court  is  bound  to  apply  such  a  rule  of  property 
precisely  as  though  it  were  sitting  as  a  local  court  in  the 
State  ;  and  this  is  true  as  to  the  observance  of  a  State  rule 
governing  voluntary  conveyances,7  general  assignments,8 


1  See  Chap.  VI.  Beach  v.  Viles,  2  Pet.  675.     See  Wil- 

2  See  Savage  v.  Murphy,   34  N.  Y.  Hams  v.  Kirtland,  13  Wall.  306  ;  Ross 
508  ;  Case  v.  Phelps,  39  N.  Y.  164.  v.  M'Lung,  6  Pet.  283  ;  Morse   v.  Rib- 
Wilson  v.  Hutchinson,    120  Mass.  let,  22  Fed.  Rep.  501. 

27  ;  Petty  v.  Petty,  4  B.  Mon.  (Ky.)  6  Nichols  v.  Levy,  5  Wall  443. 

215.  1  Lloyd  v.  Fulton,  91  U.  S.  485. 

4  See  Brown   v.  Bronson,   35  Mich.  8  Parker  v.  Phetteplace,  2  Cliff.  70  ; 

415  ;  Jiggitts  v.  Jiggitts,  40  Miss.  718.  Jaffray  v.  McGehee,  107  U.  S.    364,  2 

6  Nichols  v.  Levy,  5  Wall.  443,  444;  S.  C.  Rep.  367;  Sumner  v.    Hicks.    2 

Sumner  v.  Hicks,  2  Black,  532  ;  Dun-  Black,  532  ;    Union   Bank  v.  Kansas 

das  v.   Bowler,  3  McLean,  397  ;  Hey-  City  Bank,  136  U.  S.  223,  10  S.  C.  Rep. 

dock    v.    Stanhope,    1     Curtis,    471;  1013. 


136  PROCEDURE    IN   FEDERAL   TRIBUNALS.  §71 

exemptions,1  or  sales  rendered  void  for  want  of  a  change 
of  possession."  And  sometimes  relief  may  be  had  in  a 
Federal  court  where  the  jurisdiction  of  the  State  court 
would  have  proven  imperfect.3  Where  a  State  court 
acquires  possession  and  control  over  an  insolvent  debtor's 
property  it  has  power  to  dispose  of  it  and  to  give  a  good 
title.  To  this  extent,  as  against  a  Federal  court,  the 
State  law  is  a  rule  of  property.4  Where  a  creditor's  suit 
is  removed  from  a  State  court  to  a  Federal  court  on  the 
ground  that  the  controversy  is  between  citizens  of  differ- 
ent States,  jurisdiction  is  not  lost  by  admitting  as  plain- 
tiffs other  creditors  who  are  citizens  of  the  same  State  as 
the  defendants.5  As  we  have  shown,  the  local  law  where 
the  property  has  its  situs  governs  in  controversies  to 
reach  such  property  by  creditors.6  It  may  be  here 
observed  that  leave  to  sue  and  defend  in  forma  pauperis 
will  be  accorded  to  infants  in  the  Federal  courts,  though 
a  different  rule  prevailed  in  the  State  tribunals,7  and  that 
equity  jurisdiction  in  the  Federal  courts  is  wholly  inde- 
pendent of  the  local  laws  of  the  State,8  and  is  the  same 
in  its  nature  and  extent  in  all  the  States ;  and  that 
Federal  courts  are  bound  to  proceed  in  equity  causes 
according  to  the  principles,  rules  and  usages  which  belong 


'Wilson  v.  Perrin,  62  Fed.  Rep.  629.  7  Ferguson   v.  Dent,   15   Fed.   Rep. 

2  Allen    v.    Massey,    17    Wall.    351.  771.     See    Southworth   v.   Adams,   2 

See  Howard    v.  Prince,  11    N.    B.    R.  Flipp.  282.  in  notis. 

327.     As  to   supplementary   proceed-  8In   Hollins    v.    Brierfield   Coal  & 

inge  in  Federal  courts,  see  §  61,  n.  Iron  Co.,  150  U.  S.  379,  14   S.  C.  Rep. 

Si  e   Gorrell  v.    Dickson,   26   Fed.  127,    the    court    say:  "The    line    of 

Rep.  454.  demarcation   between   equitable  and 

4 Burt  v.  Keyes,   1    Flipp.    62.     See  legal  remedies  in  the  Federal   courts 

Wiswall    v.    Sampson,    14   How.    52;  cannot  be  obliterated  by  State  legisla- 

Williams   v.    Benedict,   8  How,   107;  tion."    See  Cates  v.  Allen,  149   U.    S. 

Payne  v.  Drewe,  4  East,  523.  451,  13  S.  C   Rep.  883,   977  ;  Rich   v. 

"Stewart  v.  Dunham,  115  TJ.  S.  61,  Braxton,  158  U.  S.  405,  15  S.  C.  Rep. 

5  S.  C.  Rep.  1163.  1006. 

'Spindle  v.  Shreve,  111  U.S.  542,4 
S.  C.  Rep.  522. 


§  72  RECAPITULATION.  I  37 

to  the  courts  of  chancery,  as  contradistinguished  from 
common-law  courts.1  But  "  the  general  proposition  as 
to  the  enforcement  in  the  Federal  courts  of  new  equitable 
rights  created  by  the  States,  is  undoubtedly  correct,  sub- 
ject, however,  to  this  qualification,  that  such  enforcement 
does  not  impair  any  right  conferred,  or  conflict  with  any 
inhibition  imposed,  by  the  Constitution  or  laws  of  the 
United  States."2  Federal  courts  have  no  jurisdiction  to 
entertain  a  creditor's  bill  for  a  simple  contract  creditor.3 
Questions  as  to  appellate  jurisdiction  in  Federal 
tribunals  will  be  presently  considered.4 

§  72.  Recapitulation.  — As  regards  the  enforcement  of  a 
judgment  against  real  property  fraudulently  conveyed  a 
creditor  then  may  be  said  to  have  three  modes  of  obtain- 
ing satisfaction  of  his  demand. 

First.  To  obtain  a  decree  of  a  court  of  equity  declaring 
the  conveyance  fraudulent,  setting  it  aside,  and  thereafter 
proceeding  to  sell  the  land  on  execution. 

Second.  By  inserting  in  the  decree  in  an  equitable 
action,  in  addition  to  the  provisions  avoiding  the  transfer, 
a  further  clause  appointing  a  referee  to  sell  at  public  auc- 
tion and  directing  the  debtor  to  unite  in  the  conveyance  ; 
or  a  clause  appointing  a  receiver  and  directing  that  the 
debtor  convey  the  land  to  him  and  that  he  sell  it. 

Third.  The  creditor  may  sell  the  land  on  execution, 
and  the  purchaser    may   then  set    up    the  fraud    in    the 


1  Gordon  v.  Hobart,  2  Sumner,  405  ;  right.     Adler   v.  Eckler,    I  McCrarj 

Burt  v.  Keyes,  1  Flipp.  69,  per  Story,  257. 

J.;  McFarlane    v.    Griffith,   4   Wash.  2  Scott  v.  Neely,  140  U.  S.    109,  11 

C.  C.  585  ;  Gaines  v.  Relf,  15  Pet.    9.  S.  C.  Rep.  712. 

See  Green  v.  Creighton,  23  How.  90.  3  England   v.  Russell,  71    Fed.  Rep. 

A  creditor  having  a  standing  in  the  818  ;  Cates  v.  Allen,  149  U.  S.  458,  13 

Federal  courts  can  contest  the  validity  S.  C.  Rep.  S83,  997. 

of   a    voluntary    assignment,    and  a  4  See  Chap.  XXVII. 
State  law  cannot  deprive  him  of  this 


I38  RECAPITULATION.  §  72 

debtor's  conveyance,  and  if  this  is  established,  obtain  a 
judgment  entitling  him  to  the  possession  of  the  land.1 

The  advantages  incident  to  a  judicious  selection  from 
these  remedies  in  particular  cases  should  not  be  over- 
looked.2 

Stated  in  a  form  of  more  universal  application,  it  is,  as 
we  have  seen,  a  familiar  and  unquestioned  doctrine  of 
equity,  that  the  court  has  power  to  aid  a  judgment-creditor 
to  reach  the  property  of  his  debtor,  either  by  removing 
fraudulent  judgments  or  conveyances  which  obstruct  or 
defeat  the  plaintiff's  remedy  under  the  judgment,  or  by 
appropriating  toward  the  satisfaction  of  the  judgment 
rights  or  equitable  interests  of  the  debtor,  which  are  not 
the  subject  of  legal  execution.3 


1  Dawley  v.    Brown,  65  Barb.   (N.  3  Robert   v.   Hodges,    16    N.  J.  Eq. 
Y.)  120.                                                         302. 

2  See  Chap.  XI. 


CHAPTER   IV. 


STATUS  OF  ATTACKING  CREDITORS. 


§73. 
74. 


76. 

77. 
78. 
79. 


81. 


Rights  of  creditors  at  large. 

Judgment  conclusive  as  to  in- 
debtedness. 

Creditor  must  have  lien  before 
filing  bill. 

Judgments  sufficient. 

Judgments  insufficient. 

Foreign  judgments. 

Creditors  of  a  decedent. 

Rule  as  to  judgments  in  equitable 
actions. 

Specific  lien  by  attachment. 


82. 

83. 
84. 


86. 

87. 


88. 


Property  of  the  debtor  taken  in 
name  of  third  party. 

When  judgment  is  unnecessary. 

Absconding  and  non-residen1 
debtors. 

Practice  in  Indiana,  North  Caro- 
lina, Alabama  and  Texas. 

Return  of  execution  unsatisfied. 

Distinction  between  realty  and 
personalty  as  to  issuance  of 
execution. 

Raising  the  objection. 


"  Courts  of  equity  are  not  tribunals  for  the  collection  of  debts."—  Webster  v.  Clark,  25  Me. 
314. 

§73.  Rights  of  creditors  at  large.  — A  creditor  at  large, 
commonly  called  a  simple  creditor,  cannot  assail,  as  fraudu- 
lent against  creditors,  an  assignment  or  transfer  of  property 
made  by  his  debtor,  until  the  creditor  has  first  established 
his  debt  by  the  judgment  of  a  court  of  competent  jurisdic- 
tion, and  has  either  acquired  a  lien  upon  specific  property, 
or  is  in  a  situation  to  perfect  a  lien  thereon,  and  subject  it 
to  the  payment  of  his  judgment,  upon  the  removal  of  the  ob- 
stacle presented  by  the  fraudulent  assignment  or  transfer.1 


1  Southard  v.  Benner,  72  N.  Y.  426. 
See  Case  v.  Beauregard,  101  TJ.  S.  668  ; 
Cates  v.  Allen,  149  U.  S.  457,  13  S.  C. 
Rep.  883,  977,  citing  the  text :  Spel- 
man  v.  Friedman,  130  N.  Y.  425,  20 
N.  E.  Rep.  765  ;  England  v.  Russell, 
71  Fed.  Rep.  818 ;  Taylor  v.  Bowker, 
111  U.  S.  110,  4  S.  C.  Rep.  397;  Briggs 
v.  Oliver,  68  N.  Y.  336;  Kyle  v. 
O'Neil,  88  Ky.  127,  10  S.  W.  Rep.  275; 
Chadbourne  v.  Coe,  10  U.  S.  App.  78, 


2  C.  C.  A.  327,  51  Fed.  Rep.  479; 
Morrow  Shoe  Mfg.  Co.  v.  Peabody, 
18  U.  S.  App.  256,  6  C.  C.  A.  508, 
57  Fed.  Rep.  685;  Scott  v.  Neely,  1 10 
TJ.  S.  106,  11  S.  C.  Rep.  712;  Trow- 
bridge v.  Bullard,  81  Mich.  451,  45  N. 
W.  Rep.  1012  ;  Klosterman  v.  Mason 
County  Cent.  R.  Co.,  8  Wash.  281, 
36  Pac.  Rep.  136  ;  Weber  v.  Weber,  90 
Wis.  467,  63  N.  W.  Rep.  757;  Clarke 
v.  Laird,  60  Mo.   App.   289 ;  Fleming 


140 


RIGHTS   OF   CREDITORS   AT   LARGE. 


§73 


This    principle    is    elementary.1     A     rule    of     procedure 
which   allowed    any   prowling    creditor,  before    his    claim 


v.  Grafton,  54  Miss.  79  ;  Francis  v. 
Lawrence,  48  N.  J.  Eq.  511,  22  Atl. 
Rep.  259  ;  Hollins  v.  Brierfield  Coal 
&  Iron  Co.,  150  U.  S.  371,  14  S.C.  Rep. 
127  ;  Weaver  v.  Haviland,  142  N.  Y. 
534,  37  N.  E.  Rep.  641  ;  Whitney  v. 
Davis,  118  N.  Y.  256,  42  N.  E.  Rep. 
661  ;  Frothhlgham  v.  Hodenpyl,  135 
N.  Y.  630,  32  N.  E.  Rep.  240  ;  Talbott 
v.  Randall,  3  N.  Mex.  226.  5  Pac.  Rep. 
533  ;  Goode  v.  Garrity,  75  la.  713,  38 
N.  W.  Rep.  150  ;  Arbuckle  Bros.  Coffee 
v.  Werner,  77  Texas,  45,  13  S.  W.  Rep. 
963.     See  §52. 

1  Dodd  v.  Levy,  10  Mo.  App.  122  ; 
Smith  v.  Railroad  Co.,  99  U.  S.  401  ; 
Turner  v.  Adams,  46  Mo.  95  ;  Crim  v. 
Walker,  79  Mo.  335  :  Dawson  v.  Cof- 
fey, 12  Ore.  519,  8  Pac.  Rep.  838;  Bax- 
ter v.  Moses,  77  Me.  465 ;  Bassett  v. 
St.  Albans  Hotel  Co.,  47  Vt.  314;  Pen- 
dleton v.  Perkins,  49  Mo.  565 ;  Jones 
v.  Green,  1  Wall.  330;  Skeele  v.  Stan- 
wood,  33  Me.  309  ;  Meux  v.  Anthony, 
11  Ark.  411  ;  Webster  v.  Clark,  25 
Me.  313 ;  Voorhees  v.  Howard,  4 
Keyes  (N.  Y.)  371  ;  Barrow  v.  Bailey, 
5  Fla.  9  ;  Burnett  v.  Gould,  27  Hun 
(N.  Y.)  366;  Reubens  v.  Joel,  13  N.  Y. 
488;  Alnutt  v.  Leper,  48  Mo.  319; 
Mills  v.  Block,  30  Barb.  (N.  Y.)  552  ; 
Martin  v.  Michael,  23  Mo.  50  ;  Public 
Works  v.  Columbia  College,  17  Wall. 
530;  Kent  v.  Curtis,  4  Mo.  App.  121  ; 
Tate  v.  Liggat,  2  Leigh  (Va.)  84  ; 
Greenway  v.  Thomas,  14  111.  271  ; 
Fletcher  v.  Holmes,  40  Me  364;  Adsit 
v.  Butler,  87  N.  Y.  585  ;  Tyler  v. 
Peatt,30  Mich.  63  ;  Tolbert  v.  Horton, 
31  Minn.  520,  18  N.  W.  Rep.  647;  Vas- 
ser  v.  Henderson,  40  Miss.  519;  Peo- 
ple's Savings  Bank  v.  Bates,  120  U. 
S.  562;  7  S.  C.  Rep.  679:  McKinley  v. 
Bowe,  97  N.  Y.  93  :  Webster  v.  Law- 
rence, 17  Hun  (N,  Y.)  566;  Lichten- 
berg  v.  Herdtf elder,  33  Hun  (N.  Y.) 


57  :  Bennett  v.  Stout.  98  111.  47  ;  De- 
troit, etc.  Rolling  Mills  v.  Ledwidge, 
162  111.  305,  44  N.  E.  Rep.  751  ;  Mc- 
Auliffe  v.  Farmer,  27  Mich.  76;  Smith 
v.  Millett,  12  R.  I.  59  ;  Ferguson  v. 
Bobo,  54  Miss.  121  ;  Claflin  v.  McDer- 
mott,  12  Fed.  Rep.  375  ;  Haggerty  v. 
Nixon,  26  N.  J.  Eq.  42  ;  Cropsey  v. 
McKinney,  30  Barb.  (N.  Y.)  47;  Stew- 
art v.  Fagan,  2  Woods,  215  ;  McMinn 
v.  Whelan,  27  Cal.  300;  Hunt  v.  Field, 

9  N.  J.  Eq.  36:  Robinson  v.  Stewart, 

10  N.  Y.  189  ;  McDermott  v.  Blois,  1 
R.  M.  Charlt.  (Ga.)  2S1  ;  Sturges  v. 
Vanderbilt,  73  N.  Y.  384  ;  Evans  v. 
Hill,  18  Hun  (N.  Y.)  464  ;  Sexey 
v.  Adkinson,  34  Cal.  346  ;  Dahlman 
v.  Jacobs,  15  Fed.  Rep.  863  ;  Miller  v. 
Miller,  7  Hun  (N.  Y.)  208;  Griffin  v. 
Nitcher,  57  Me.  270 :  Nugent  v.  Nu- 
gent, 70  Mich.  52,  37  N.  W.  Rep.  706  ; 
See  Ex  parte  Boyd,  105  U.  S.  653. 
Compare  Case  v.  Beauregard,  101  U. 
S.  688,  and  see  Taylor  v.  Bowker,  111 
U.  S.  110.  In  Alabama  "a  creditor 
without  a  lien  may  file  a  bill  in  chan- 
cery to  subject  to  the  payment  of  his 
debt  any  property  which  has  been 
fraudulently  transferred,  or  attempted 
to  be  fraudulently  conveyed,  by  his 
debtor."  Revised  Code,  §  3446.  In 
construing  this  statute  the  court  said 
that  it  was  obviously  the  intention  of 
the  legislature  to  enlarge  the  juris- 
diction of  the  court  of  chancery,  and 
in  cases  where  the  simple  and  pure 
relationship  of  debtor  and  creditor 
existed  to  invest  the  creditor  without 
a  lien  or  a  judgment  with  the  privi- 
lege formerly  confined  to  judgment- 
creditors.  Reynolds  v.  Welch,  47  Ala. 
200.  It  must  appear  that  the  debt  has 
become  due  and  that  he  is  in  a  posi- 
tion to  enforce  it  at  law.  Freider  v. 
Lienkauff,  92  Ala.  469,  8  So.  Rep.  758; 
McGhee  v.  Importers'  &  T.  Nat.  Bank, 


§  73  RIGHTS   OF   CREDITORS   AT   LARG1  .  141 

was  definitely  and  finally  established  by  formal  judg- 
ment, and  without  reference  to  the  character  of  his 
demand,  to  file  a  bill  to  discover  equitable  assets,  or  to 
impeach  transfers,  or  interfere  with  the  business  affairs  of 
the  alleged  debtor,  it  is  asserted  would,  manifestly,  be 
susceptible  of  the  grossest  abuse.  A  more  powerful 
weapon  of  oppression  of  a  debtor,  could  not  be  placed 
at  the  disposal  of  unscrupulous  litigants.  x  A 
creditor  at  large,2  having  no  lien  or  trust,3  is  not 
favored  in  the  class  of  litigation  under  consideration,4 
and,  generally  speaking,  has  absolutely  no  status  in 
court  for  the  purpose  of  filing  a  creditor's  bill.5 
The  possibility  of  a  judgment  will  not  suffice.6  The 
rule  is  peremptory.  "  A  court  of  equity  never  inter- 
poses," says  Rufifin,  C.  J.,7  "  in  behalf  of  a  mere  legal 
demand,  until  the  creditor  has  tried  the  legal  remedies, 
and  found  them  ineffectual."  It  was  recently  said  in 
New   York,    "  the    creditor    must   pursue   his   remedy  at 


93  Ala.   192,  9  So.  Rep.  734.     In   Mis-  Compare  Manufacturing  Co.  v.  Brad 

sissippi  equity  is  given  jurisdiction  by  ley,  105  U.  S.  175. 

section  503  of  the  Code  of  1892,  even  4  Herring  v.  New  York,  L.  E.  &  W. 

where  no  judgment  has  been  obtained  R.  R.  Co.,  63  How.  Pr.  (N.  Y.)  502. 

or  execution  been  returned.    The  debt  5  Dunlevy  v.    Tallmadge,    32  N.  V. 

must  be  actually  due  before  the  bill  is  459.     But  the  simple  contract  credi- 

filed.    Browne  v.  Hernsheim,  71  Miss,  tor  is  not  always  without  redress  in 

574,  14  So.  Rep.   36.     The  statute  in  cases  where  a  fraudulent  disposition 

West  Virginia   recognizes   the   same  of  property  has  been  made      An  at- 

rule.     State  v.  Bowen,   38  W.  Va.  91,  tachment  or  process  in  that    aature 

18  S.  E.  Rep.   375.    So  in  Indiana,  see  maybe  secured  against    the  fraudu- 

Field  v.  Holzman,  93  Ind.  205.     Same  lent  debtor,  and  the  property  iuiprop- 

rule  applied  in  Brown  v.  J.  Wayland  erly  transferred,  or  any  other  prop 

Kimball  Co.,  84  Me.  492,  24  All.  Rep.  erty   the   debtor    may    have,   can    be 

1007.  seized  under  such  provisional  process 

1  Cited  in  Artman  v.  Giles,  155  Pa.  and  held  pending  the  suit. 

St.  417,  26  Atl.  Rep.  668.     See  Swan  6  Griffin    v.    Nitcher,    57    Me.  272. 

Land  &  Cattle  Co.  v.  Frank,  148  U.  Compare   Crompton    v.   Anthony,    IS 

S.  612,  13  S.  C.  Rep.  691.  Allen  (Mass.)  36  ;  Stephens  v.  White- 

2  Button  v.  Rathbone,  126  N.  Y.  192,  head.  75  Ga.  297. 

27  N.  E.  Rep.  266;  Jones  v.  Graham,  'Brown   v.    Long,    1   Ired.  Eq.  (N. 

77  N.  Y.  628.  C.)  193. 

3  Case  v.  Beauregard,  101  U.  S.  688. 


142  RIGHTS   OF    CREDITORS   AT   LARGE.  §  73 

law  to  every  available  extent  before  he  can  resort  to 
equity  for  relief."  *  It  is  not  intended  by  this  rule  to 
exclude  simple  contract  creditors  from  the  operation  of 
the  statutes  against  fraudulent  conveyances,  they  being, 
except,  perhaps,  as  regards  statutory  liens,  as  much  pro- 
tected, in  theory  of  law,  as  creditors  by  judgment  ;  but 
until  such  creditors  have  obtained  a  judgment  and 
acquired  a  lien,  or  a  right  to  a  lien  upon  the  debtor's 
property,  they  are  not  in  a  position  to  assert  their  rights 
by  a  creditor's  action.3  It  is  observed  by  Brown,  J.,  in 
Paulsen  v.  Van  Steenbergh,3  that  "  a  court  of  equity  is 
not  the  forum  for  litigating  disputed  claims,  and,  as  a 
general  rule,  will  not  entertain  an  action  or  afford  relief 
to  a  creditor  until  he  has  established  his  debt  in  a  court 
of  law."4  Courts  of  equity  are  not  tribunals  for  the 
collection  of  ordinary  demands.5  "  The  debt,"  said 
Field,  J.,  "  must  be  established  by  some  judicial  proceed- 
ing, and  it  must  generally  be  shown  that  legal  means  for 
its  collection  have  been  exhausted.6  So  the  statute  of 
limitations  does  not  begin  to  run  against  the  right  to  main- 
tain a  creditor's  action  till  the  recovery  of  judgment  on  the 


1  Importers' &Tr.  Nat.  Bk.v.  Quack-  5Webster    v.    Chirk.    35     Me.    314. 

enbush,   143  N.  Y.  567,  071,  38  X.  E.  See  Dunlevy  v.  Tallmadge.  32  N.  Y. 

Rep.  728.  457  ;  Bownes  v.  Weld,  3  Daly  (N.  Y.) 

2 Southard  v.  Benner,  72  N.  Y.  426;  233. 

Karst   v.    Gane,  136  N.  Y.  323,  32  N.  "Public   Works     v.    Columbia  Col- 

E.    Rep.    1072  ;     Thompson    v.    Van  lege,  17  Wall.  530  ;  Powell  v.  Howell, 

Vechten,    27    N.    Y.    568  ;    Geery  v.  03  N.  C.  284  ;  Fox  v.  Moyer,  54  N.  Y. 

Geery,   63  N.  Y.  256.     See  Frisbey  v.  128.     Compare   Case    v.    Beauregard, 

Thayer,   2:.    Wend.  (N.   Y.)  396  ;  Na-  101  U.  S.  688.     Wisconsin  Granite  Co. 

fcional  Bank  of  Rondout  v.  Dreyfus,  v.  Gerrity,  144  111.  77,  33  N.  E.  Rep.  31; 

14  Weekly  Dig.  (N.  Y.)  160.  Prentiss  v.  Bowden,  145  N.  Y.  342,  40 

»65    Bow.  Pr.  (N.  Y.)342;   Eowev.  N.  E.  Rep.  13.      A  creditor's  bill  may 

Whitney,   Wi  Me.  17  ;  Taylor  v.  Bow-  be  filed  on  a  judgmenl   al    law,    after 

ker,  111  U.  S.  110,  4  S.  C.  Rep.  3(J7  :  execution,    aotwithstanding    the    re- 

Webster  v.  Clark,  25  Me.  313;  Griffin  covery  of   another  judgment  on  the 

v.    Nitcher,    57   Me.  270;  Fleming  a-,  judgment.       Elizabethtown    Savings 

Grafton.  .-,|  Miss.  79.  Inst.    v.    Gerber,    34   N.    J.   Eq.   132, 

*See  Tasker   v.   Moss,   S2  Ind.  62;  note ;  Bates  v.  Lyons,  7  Paige  (N.  Y.) 

Baxter  v.  Moses,  77  Me.  465.  85. 


§  73  RIGHTS   OF   CREDITORS   AT   LARGE.  1 43 

general  claim  and  the  return  of  execution  unsatisfied.1 
When  a  conveyance  is  said  to  be  void  or  voidable 
against  creditors  the  reference  is  to  such  parties  when 
they  are  clothed  with  judgments  and  executions,  or  such 
other  titles  as  the  law  has  provided  for  the  collection  of 
debts.2  Judge  Bronson,  in  Noble  v.  Holmes,3  after 
declaring  that  a  fraudulent  sale  could  not,  under  the 
provisions  of  the  Revised  Statutes  of  New  York,  be 
impeached  by  a  creditor  at  large,  added  :  "  It  must  be 
a  creditor  having  a  judgment  and  execution,  or  some  other 
process  which  authorized  a  seizure  of  the  goods!'  It 
may  be  urged  that,  where  a  debtor  is  manifestly  guilty 
of  fraudulent  conduct  with  reference  to  his  property,  the 
prerequisites  of  a  judgment  and  execution  will  prove  seri- 
ous impediments  to  an  ordinary  contract  creditor  who 
desires  to  take  immediate  action  to  reach  the  property 
which  the  debtor  is  dissipating  or  concealing.4  But  the 
answer  to  this  proposition  has  generally  been  that  the 
remedy  of  a  creditor  so  situated  is  not  by  creditor's  bill  ; 
he  must  seek  provisional  relief  by  arrest  or  attachment, 
or  both,  in  a  suit  founded  upon  his  contract  claim.5  A 
creditor  in  this  position  is  not,  as  we  have  seen,  usually 
entitled  to  interfere  by  injunction  before  judgment  with 
any  contemplated   alienation  of  property  by  the  debtor,0 


1  Weaver   v.    Haviland,  142  N.   Y.  v.  Davis,  148  N.  Y.  260,  42  N.  E.  Rep. 

534,  37  IS .  E.  Rep.  641.  661. 

-Per  Denio,  J.,  in  Van  Heusen  v.  5See  Dodcl   v.    Levy,  10  Mo.   App. 

Radcliff,  17  N.  Y.  580  ;  Gross  v.  Daly,  121.     "  The  non-existence  of   a  judg- 

5  Daly  (N.  Y.)  545  ;  McElwain  v.  Wil-  ment  and  execution  in  favor  of  Wax- 

lis,    9  Wend.  (N.    Y.)  561  ;  Button  v.  ner  &  Co.  is  a  radical   defect.      It   is 

Rathbone,    126  N  .   Y.    192,    27  N.  E.  not  in  the  nature   of  a  technical  or 

Rep.  266,  and  cases  cited.  formal  objection,  bul  one  going  to  the 

35  Hill  (N.    Y.)    194;    Rinchey    v.  essential  merits  of  the   case."     In    re 

Stryker,  28  N.  Y.  45;  Lux  v.  Davidson,  Collins,  6  Fed.  Cas.   116. 

56  Hun    (N.    Y.)  347,  9  N.  Y.  Supp.  *  Wiggins  v.    Armstrong,  2  Johns. 

816.  Ch.  (N.  Y.)  145;  Adler  v.  Fenton,  24 

4See   People    ex  rel  Cauffman  v.  How.   411;  Moran  v.    Dawes,  Hopk. 

Van  Buren,  136  N.  Y.  252  ;  Whitney  Ch.  (N.  Y.)  365.     See  §  52. 


144 


RIGHTS   OF   CREDITORS   AT   LARGE. 


73 


even  after  instituting-  suit  by  attachment,1  though  an 
attempt  has  been  made  under  peculiar  circumstances,  to 
extend  equitable  relief  to  preserve  an  attachment  lien 
and  hold  the  property  in  the  jurisdiction  of  the  court.2 
So  stockholders  cannot  sue  in  the  right  of  a  corporation 
without  first  trying  to  set  the  body  itself  in  motion  ;3  and 
a  creditor  or  member  who  desires  to  sue  in  place  of  a 
receiver  must  set  forth  that  the  receiver  declines  to  pro- 
ceed,4 unless  it  appears  that  the  receiver  is  himself  one 
of  the  parties  to  be  sued.5 

To  recapitulate,  then,  the  judgment  and  execution  are 
usually  necessary  to  a  creditor  before  proceeding  in 
equity — First,  to  adjudicate  and  definitely  establish  the 
leeal  demand,  and  save  the  debtor  harmless  from  inter- 
ference  at  the  instigation  of  unconscionable  claimants; 
second,  to  exhaust  the  legal  remedy.6 


1  Martin  v.  Michael,  23  Mo.  50.  See 
Whitney  v.  Davis,  148  N.  Y.  260,  42 
N.  E.  Rep.  661. 

2  People  ex  rel.  Cauffman  v.  Van 
Buven,  136  N.  Y.  252,  32  N.  E.  Rep. 
775.  But  see  Whitney  v.  Davis,  148 
N.  Y.  260,  42  N.  E.  Rep.  661,  affi'g  88 
Hun  (N.   Y.)  168,  35  N.  Y.  Supp.  531. 

3  Taylor  v.  Holmes,  127  U.  S.  402, 
8  S  C.  Rep.  1192;  Greaves  v.  Gouge, 
69  N.  Y.  157  ;  Moore  v.  Schoppert,  22 
W.  Va.  291 ;  Hawes  v.  Oakland,  104 
U.  S.  450. 

4  Fisher  v.  Andrews,  37  Hun  (N. 
Y.)  180  ;  Wait  on  Insol.  Corps.  §  100. 

5  Brinckerhoff  v.  Bostwick,  88  N. 
Y.  52. 

'See  Merchants'  National  Bank  v. 
I '.huh,  13  R.  I.  594.  In  Stone  v.  West- 
■  mi,  18  R.  I.  518,  28  Atl.  Rep.  662, 
the  court  said  :  "In  Merchants'  Na- 
tional  I  lank  v.  Paine,  13  R.I  592,  the 
defendant  had  absconded,  leaving  no 
legal  assets  which  could  be  attached 
so  thai  a  judgment  at  law  could  be 
obtained  against  him,  and  tins  court 


held  that  as  legal  process  was  thereby 
rendered  impossible,  the  reason  for 
said  rule  failed,  and  the  plaintiff 
might  therefore  proceed  at  once  to 
enforce  his  claim  in  equity.  In  Gard- 
ner v.  Gardner,  17  R.  I.  751,24  Atl. 
Rep.  785,  it  was  held  that  if  the 
debtor  be  dead  the  creditor  may  pro- 
ceed in  equity  without  first  pursuing 
his  legal  remedy.  In  the  case  at  bar  the 
defendant  bad  not  absconded,  be  was 
not  dead,  nor  is  it  even  alleged  that  he 
was  insolvent,  so  as  to  bring  the  case 
within  the  exception  made  by  those 
authorities  which  bold  that  such  an 
allegation  dispenses  with  the  necessity 
for  the  issue  and  return  of  an  execu- 
tion before  proceeding  in  equity.  Sec 
cases  cited  in  Ginn  v.  Brown,  14  R.  I. 
524.  Nor  does  the  Mil  allege  that  the 
defendant  has  conveyed  his  property 
to  another  in  fraud  of  the  judgment- 
creditor  so  as  to  excuse  him  from  the 
service  of  execution.  See  Payne  v. 
Sheldon,  63  Barb.  (N.  Y.)  169."  See 
also    National   Tradesmen's    Bank    v. 


§  74  JUDGMENT   CONCLUSIVE.  145 

The  maxim,  "  Lex  neminem  cogit  ad  vaua  sen,  inutilia 
per  agenda,"  has  struggled  for  application  in  cases  where  it 
is  manifest  the  judgment  at  law  will  be  ineffectual  or 
worthless,1  but,  though  the  sympathy  of  the  profession 
seems  to  favor  a  relaxation  of  the  rule  requiring  a  judg- 
ment and  execution  before  a  proceeding  by  creditor's  bill 
will  lie,  yet,  generally  speaking,  the  absence  of  a  judgment 
proves  fatal  to  such  a  bill.2  A  guarded  statutory  reform 
might  be  suggested  with  a  view  to  enlarge  the  facilities 
of  creditors  to  reach  equitable  assets.  Complainants 
holding  liquidated  demands,  founded  upon  written  instru- 
ments or  express  contracts,  might  safely  be  given  a  right 
to  proceed  to  attack  transfers,  against  debtors  who  have 
made  General  assignments,  or  against  whom  unsatisfied 
judgments  rest,  or  who  have  suspended  business  solely 
from  lack  of  funds  or  have  become  notoriously  insolvent. 

§74.  Judgment  conclusive  as  to  indebtedness. —  In  cases 
where  fraud  is  established,  the  creditor  does  not  claim 
through  the  debtor,  but  adversely  to  him,  and  by  a  para- 
mount title,  which  overreaches  and  annuls  the  fraudulent 
conveyance  or  judgment  by  which  the  debtor  himself 
would  be  estopped.  It  follows,  from  the  principles  sug- 
gested, that  a  judgment  obtained  without  fraud3  or  col- 
lusion, and  which  concludes  the  debtor,  whether  rendered 
upon  default,  by  confession  or  after  contestation,  is,  upon 
all  questions  affecting  the  title  to  his  property,  conclusive 


Wetmore,    124    N.  Y.  241,  26    N.    E,  Hogan,  53  Me.  554;  Terry  v.  Ander- 

Rep.  548  ;  Patchen  v.  Rofkar,  12  App.  son,  95  U.  S.  636.     See  §  83. 

Div.  (N.  Y.)  475,  42  N.  Y.  Supp.  35.  *  See  Taylor  v.    Bowker,    111    U.  S. 

1  See  Lichtenberg  v.  Herdtfelder,  33  110,   4    S.   C.    Rep.    397;    Baxter   v. 

Hun  (N.  Y.)  57,  60,  dissenting  opinion  Moses,  77  Me.  476,    1    Ail.    Rep.  350; 

of  Davis, P.  J.;  case  affi'd,  103  N.  Y.  Jones  v.  Green,  1  Wall.  330. 

302,  8  N.  E.  Rep.  526  ;  Case  v.  Beaure-  3  Equity  will  interfere    to    restrain 

gard,  101  U.  S.  690;  Hodges  v.  Silver  the     enforcement     of    a     judgmem 

Hill  Mining  Co.,  9  Ore.  202 ;  Turner  grounded    on    a    fictitious    demand, 

v.  Adams,  46  Mo.   95;  Des  Brisay  v.      Schroer  v.  Pet  lib L63    111.  42,  45 


N.  W.  Rep. 


IO 


14*5 


JUDGMENT   CONCLUSIVE. 


74 


evidence  against  his  creditors,  to  establish,  first,  the  rela- 
tion of  creditor  and  debtor  between  the  parties  to  the  re- 
cord, and  secondly,  the  amount  of  the  indebtedness.1  This 
principle  is  assumed  in  the  New  York  statute  in  relation 
to  creditors'  bills,2  and  is  so  decided  in  Rogers  v.  Rogers.3 


1  In  Whitney  v.  Davis,  148  N.  Y. 
261,  42  N.  E.  Rep.  661,  Gray,  J.,  said  : 
' '  The  principle  of  equitable  interven- 
tion to  annul  or  set  aside  transfers  of 
a  debtor's  property,  for  being  fraudu- 
lent as  to  his  creditors,  demands  for 
its  application  an  adjudication  of  the 
fact  of  the  debt." 

2  2  R.  S.  174,  §  38. 

s3  Paige  (N.  Y.)  379.  See  2  Greenl. 
Ev.  531  ;  Marsh  v.  Pier,  4  Rawle  (Pa.) 
288  ;  Candee  v.  Lord,  2  N.  Y.  270  ; 
Decker  v.  Decker,  108  N.  Y.  128,  15 
N.  E.  Rep.  307  ;  Mattingly  v.  Nye,  8 
Wall.  373,  and  cases  cited  ;  Sbaw  v. 
Manchester,  84  Iowa,  246,  50  N.  W. 
Rep.  985.  Compare  Teed  v.  Valen- 
tine. 65  N.  Y.  471.  Creditors  may  of 
course  attack  a  collusive  judgment 
when  it  is  a  fraud  upon  them.  Lewis 
v.  Rogers,  16  Pa.  St.  18  ;  Sidensparker 
v.  Sidensparker,  52  Me.  481  ;  Edson  v. 
Cumings,  52  Mich.  52  ;  Clark  v.  Doug- 
lass, 62  Pa.  St.  416,  per  Sbarswood,  J. : 
Wells  v.  O'Connor,  27  Hun  (N.  Y.) 
428.  Compare  Voorhees  v.  Seymour, 
26  Barb.  (N.  Y.)  569  ;  Meeker  v.  Har- 
ris. 19  Cal.  278  ;  Thompson's  Appeal, 
57  Pa.  St.  175  ;  Clark  v.  Foxeroft,  6 
Mr.  398;  Uhlfelderv.  Levy,  9  Cal.  607. 
Nee  especially  Sh;i\v  v.  Dwight,  27  N. 
Y.  244;  Mandeville  v.  Reynolds,  68  N. 
Y.  545  ;  Bums  v.  Morse,  6  Paige  (N. 
Y.)  108;  Whittlesey  v.  Delaney,  7:!  X. 
V.  571.  So  the  alienee  from  whom  it 
j-  soughl  to  recover  property  may 
show  thai  the  judgment  is  fraudulent 
and  collusive  (Collinson  v.  Jackson,  14 
Fed.  Rep.  309,  8  Sawyer,  357.  See 
Freeman  on  Judgments,  §§  335-7),  or 
thai  there  is,  in  fact,  no  indebtedness 
M'hi.k  v.  Anlhoin,  31  Ark.  519;  King 


v.  Tharp,  26  Iowa,  283  ;  Esty  v.  Long, 
41  N.  H.  103),  for  judgments  may  be 
fraudulent  as  well  as  deeds.  Carter 
v.  Bennett,  4  Fla.  283;  Decker  v. 
Decker,  108  N.  Y.  128.  Finch,  J.,  said  : 
"  It  does  not  alter  the  character  of  this 
fraudulent  arrangement,  or  enable  it 
to  defy  justice,  that  it  was  accom- 
plished through  the  agency  of  a  valid 
judgment  regularly  enforced.  That 
often  may  be  made  an  effective  agency 
in  accomplishing  beyond  its  own 
legitimate  purpose  a  further  result  of 
fraud  and  dishonesty."  Decker  v. 
Decker,  108  N.  Y.  128,  135,  15  N.  E. 
Rep.  307.  One  who  is  in  possession 
of  property  of  the  debtor  trans- 
ferred with  intent  to  defraud  cred- 
itors cannot  defend  himself  on  the 
ground  that  the  debtor  might  have 
had  a  defense  against  the  judg- 
ment had  he  chosen  to  assert  it 
(Dewey  v.  Mover,  9  Hun  [N.  Y.]  479); 
but  confession  of  judgment  by  an  ad- 
ministrator cannot  deprive  the  grantee 
of  his  intestate  of  the  defense  of  the 
statute  of  limitation.  McDowell  v. 
Goldsmith,  24  Md.  214.  Then  a  de- 
cree confirming  a  conveyance  of  real 
estate  from  a  husband  to  a  wife  in  a 
suit  bet  ween  them,  is  not  conclusive 
upon  the  husband's  assignee  in  bank- 
ruptcy, seeking  to  annul  the  transfer 
as  having  been  made  in  fraud  of 
creditors.  Humes  v.  Scruggs,  94  U. 
S.  22.  Mr.  .Justice  Hunt  said  in  this 
case  :  "There  would  be  little  difficulty 
in  making  and  sustaining  fraudulent 
transfers    of    property,    if   the    parties 

thereto  could  by  a  subsequent  suit  be- 
tween themselves  so  fortify  the  deed 
that  no  others  could  attack  it."    See 


§  75  T-IKN    BEFORE   FILING    BILL.  147 

The  execution  issued  upon  the  judgment  shows  that 
the  remedy  afforded  at  law  has  been  pursued  and  of 
course  is  the  highest  evidence  of  the  fact.  The  return 
shows  whether  the  remedy  has  proved  effectual  or  not, 
and,  because  of  the  embarrassments  which  would  attend 
any  other  rule,  the  return  is  generally  considered  to  be 
conclusive.  The  court  will  not  ordinarily  entertain 
inquiries  as  to  the  diligence  of  the  officer  in  endeavoring 
to  find  property  upon  which  to  levy.1  A  general  cred- 
itor cannot  attack  another  creditor's  judgment.2  But  the 
fraudulent  use  of  a  valid  judgment  may  be  overturned 3  and 
the  validity  of  an  execution  maybe  assailed  in  a  creditor's 
suit,4  and  a  judgment-creditor  attacking  another  credit- 
or's judgment  by  suit  assumes  the  burden  of  showing 
that  the  judgment  assailed  was  not  bona  fide  and  repre- 
sented no  debt.5 

§  75.  Creditor  must  have  lien  before  filing  bill. — We  must 
then  accept  the  general  rule  that  a  court  of  equity  will  not 
usually  interfere  to  enforce  the  payment  of  debts  until  the 
creditor  has  exhausted  all  the  remedies  known  to  the 
law  to  obtain  satisfaction  of  the  judgment.  It  is  usually 
essential,  in   order  to  give  the  court  jurisdiction,  and  to 


also  Van  Kleeck  v.  Miller,  19  N.  B.  R.  '  Jones  v.  Green,  1  Wall.  332  ;  Pier- 

494,  and  compare  Garner  v.  Second  stoff  v.    Jorges,    86  Wis.  129,   56  N. 

Nat.  Bank,  151  U.  S.  420-435,  14  S.  C.  W.  Rep.  735. 

Rep.    390.     A    debtor   may    attack  a  ?  Frothingham  v.  Hodenpyl,  185  N. 

judgment  as  having  been  obtained  by  Y.  630,  32  N.  E.  Rep.  240. 

fraud.     Richardson     v.    Trimble,     38  3  Decker  v.  Decker,  108  N.  Y  .135. 

Hun  (N.  Y.)   409  ;  Matter  of  Hill,  2  4Prentiss  v.  Bowden,  145  N.  Y.  348, 

Con.  (N.  Y.)  27.     We  may  here  state  40  N.  E.  Rep.  13.  See  [reporters  &  Tr. 

that  the  frauds  which  will  sustain  a  Nat.    Bk.  v.  Quackenbush,   143   X.   Y. 

bill  to  set  aside  a  judgment  or  decree  567,   38    N.    E.    Rep.  728. 

between    the   parties  rendered  by    a  6  Columbus  Watch  Co.  v.  Hodenpy] 

court   of   competent   jurisdiction  are  135  N.  Y.    430,   32    X.     E.     Rep     239. 

those  which  are  extrinsic  or  collateral  See  Brooks  v.  Wilson.  125  X.  Y.   256, 

to  the  issues  litigated.     United  States  26    N.    E.   Rep.   258;     Sweel    v.  Con- 

v.   Throckmorton,   98  U.  S.  61,  and  verse,  8«  Mich.  I.  lit  X.  W.  Rep.  899. 
cases  cited;  Ross  v.  Wood,  70  N.  Y.  9. 


148  LIEN   BEFORE   FILING   BILL.  §  75 

reach  equitable  assets,  that  an  execution  should  have 
been  issued  upon  the  judgment,  and  returned  unsatisfied, 
or,  if  an  action  is  brought  in  aid  of  an  execution  at  law, 
that  it  be  outstanding.  The  commencement  of  the  action 
will  then  give  the  creditor  a  specific  lien  J  except  as 
regards  chattels  subject  to  be  taken  on  execution.3  The 
rule  that  the  legal  remedy  must  be  exhausted  by  the  judg- 
ment-creditor before  relief  can  be  solicited  to  reach  property 
not  subject  to  the  lien  of  the  judgment  is  an  ancient  one. 
It  existed  in  England,  and  was  recognized  by  the  Court 
of  Chancery  in  New  York,  before  the  provisions  made 
by  the  Revised  Statutes3  of  that  State,  which  require 
that  an  execution  be  issued  and  returned  unsatisfied  in 
whole  or  in  part,  before  a  bill  can  be  filed  to  compel  a 
discovery  of  property  and  to  prevent  a  transfer  of  it. 
"  This  statute,"  says  Chancellor  Walworth,  in  Child  v. 
Brace,4  "  is  only  declaratory  of  a  principle  which  had 
before  been  adopted  in  this  court."5  Hence  the  cred- 
itors of  an  insolvent  partnership  must  acquire  a  legal  or 
an  equitable  lien  upon  the  property  of  the  firm  to  author- 
ize them  to  invoke  the  equitable  powers  of  the  court  in  its 


1  Adsit  v.  Butler,  87   N.  Y.  587  ;  be-  or  defeated  by  the  death  of  the  debtor 

low,  23   Hun  (N.  Y.)  45  ;  Crippen  v.  before  judgment    Brown  v.  Nichols, 

Hudson,  13  N.  Y.   161  ;  Beck  v.  Bur-  42  N.  Y.  26." 

dett,  1  Paige  (N.  Y.)  305;  Dunlevy  v.  2 First   National   Bank   v.    Shuler, 

Tallmadge,    32   N.    Y.  461.      In   First  153  N.  Y.  172. 

National  Bank  v.  Shuler,   153  N.   Y.  3  2  N.  Y.  R.  S.  174,  §38. 

171,  the  court  says  :     "  The  rule  is  well  44  Paige  (N.  Y.)  309. 

settled  in  this  state  that  the  plaintiff  Sec  Dunlevy  v.  Tallmadge,  32  N. 

in  a  creditor's  action  acquires,  by  the  Y.  460  ;  Adsit  v.  Butler,  87  N   Y.  587  ; 

commencement  of  the  suit,    a    hen  Wiggins  v.  Armstrong,  2  Johns.  Ch. 

upon  the  choses  in  action  and  equit-  (N.  Y.)  144 ;  Hendricks  v.  Robinson,  2 

able  assets  of  the  debtor,  which  en-  Johns  Ch.  (N.  Y. )  283  ;  Brinkerboff  v. 

titles  him,  in  the  successful  evenl  of  Brown,  4   Johns.   Ch.   (N.   Y.)   671; 

the  action,   to  priority  of    paymenl  Spader  v.  Davis,  5  Johns.  Ch.  (N.  Y.) 

thereout  in  preference  to  other  credit-  280;  8.  con  error,  20  Johns.  (N.  Y.) 

ore   irrespective  of  the  priority  of  the  554;    Willetts    v.     Vandenburgh,   34 

respective  judgments   (Edmeston    v.  Barb.  (N.Y.)  424;  Crippen  v.  Hudson, 

Lyde,  1  Pai.  637;  Corning  v.  White,  2  13  N.  Y.  161;  Brooks  v.  Stone,  19  How. 

Id.  567),  and  this  lien  is  not  displaced  Pr.  (N.  Y.)  396. 


§7^  JUDGMENT  SUFFICIENT.  i.|>, 

administration.1  Nor  does  the  fact  that  the  debtor  is  an 
insolvent  corporation,  and  has  alienated  its  property  in 
contravention  of  the  statute,  authorize  a  resort  to  equity 
until  the  remedy  at  law  has  been  exhausted  by  judgment 
and  execution  returned  unsatisfied.2  But  where  in  such 
case  the  property  is  in  the  hands  of  the  receiver,  against 
whom  no  execution  can  be  levied,  a  creditor's  bill  will  lie 
without  such  an  execution.3  In  general  it  may  be  said 
that  while  the  mere  fact  that  the  execution  will  probably 
prove  worthless  is  not  enough  to  warrant  the  bring-ine  of 
a  creditor's  action  without  a  levy  and  a  return  nulla  bona, 
it  is  different  where  such  levy  is  impossible  by  provision 
of  law.4 

§  76.  Judgment  sufficient.  —  An  ordinary  money-judg- 
ment rendered  in  the  State  in  which  the  debtor  resides 
and  the  concealed  property  is  located,  is  manifestly  a 
proper  foundation  for  a  creditor's  suit.  A  bill  of  this 
character  may  also  be  filed  "  to  aid  in  the  collection  of 
money  decreed  in  chancery."5  "I  have  no  doubt,  how- 
ever," said  Chancellor  Walworth,  "  that  a  creditor,  by  a 
decree  in  chancery,  upon  the  return  of  his  execution 
unsatisfied,  is  entitled  to  the  same  relief,  against  the 
equitable  rights  and  property  of  his  debtor,  as  a  creditor 
by  a  judgment  at  law."6  A  justice's  judgment  will 
suffice/   especially  if  docketed  in  a  court  of  record.8      And 


1  Crippen  v.  Hudson,  13  N.  Y.,  161;  Le  Fevre  v.  Phillips,  81  Hun  (N.  Y.) 
Dunlevy  v.  Tallmadge,  32  N.  Y.  457.  232.  30  N.  Y.  Supp.  709. 

See  Greenwood  v.  Brodhead,  8  Barb.  5  Farnsworth    v.    Strasler,    12    111. 

(N.  Y.  )   593;  Young  v.  Frier,  9  N.  J.  485;  Weigtinan   v.  Hatch,   17  111.281. 

Eq.  465.  6Clarkson  v.    De  Peyster,   3  Paige 

2  Adee  v.  Bigler,  81  N.  Y.  349.  (N.  Y. )  320. 

3  Blair  v.  Illinois  Steel  Co.,  159  111.  '  Bailey  v.  Burton,  8  Wend.  (N.  Y.) 
350,  42  N.  E.  Rep.  895.  339;    Newdigate   v.  Jacobs,   9   Dana 

4  National  Tradesmen's  Bank  v.  (Ky.)  18 ;  Heiatt  v.  Barnes,  5  Dana 
Wetmore,  124  N.  Y.  241,  26  N.  E.  Rep.  (Ky.)  220;  Ballentine  v.  Beall,  4  111.  204. 
548;  Patchenv.  Rofkar,  12  App.  Div.  *  See  Crippen  v.  Hudson,  13  N.  Y. 
(N.   Y.)  475,  42  N.  Y.  Supp.  35.     See  161. 


150  JUDGMENT    INSUFFICIENT.  §77 

a  judgment  by  confession,  even  though  defective  in  form 
and  particularity  of  statement,  authorizes  the  creditor  to 
impeach  a  fraudulent  transfer.1  Judgment  entered  upon 
an  offer  will  stand,2  and  will  not  be  set  aside  at  the  suit 
of  another  creditor  because  this  method  was  adopted  for 
the  purpose  of  avoiding  the  statutory  form  of  confession 
of  judgment.3  So  a  demand  classified  and  allowed  by  a 
probate  court  will  suffice.4  Under  a  judgment  against 
joint  debtors  only  part  of  whom  were  served  with  process, 
a  creditor's  action  may  be  prosecuted  to  reach  joint  prop- 
erty, but  not  the  separate  property  of  those  not  served 
with  process  in  the  original  suit.5  Supplementary  pro- 
ceedings may  be  taken  on  a  judgment  so  recovered  to 
reach  joint  property.6 

§  77.  Judgment  insufficient.—  It  seems  clear  in  New  York, 
at  least,  that  a  creditor's  action  cannot  be  founded  upon 
a  judgment  recovered  in  a  justice's  court  where  the  exe- 
cution had  only  been  issued  to  and  returned  by  the 
justice.7  It  should  be  docketed  in,  and  made  a  judg- 
ment of,  a  court  of  record.  It  then  becomes  as  much 
entitled  to  the  aid  of  a  court  of  equity  as  though  originally 
recovered  in  a  court  of  record.8      So  supplementary  pro- 


1  Neusbaum  v.  Keim,  24  N.  Y.  325.  6  Billhofer  v.  Heubach,  15  Abb.  Pr. 
Compare  Harrison  v.  Gibbons,  71  N.  (N.  Y.)  143.  See  Produce  Bank  v. 
Y.  58.  If  a  creditor  attacks  a  con-  Morton,  67  N.  Y.  199.  Compare 
fession  of  judgment  as  being  fraudu-  Howard  v.  Sheldon,  11  Paige  (N.  Y.) 
lent  against  him  he  must  plead  the  558;  Commercial  Bank  of  Lake  Erie 
grounds  of  the  objection.  A  general  v.  Meach,  7  Paige  (N.  Y.)  448. 
averment  will  not  suffice.  Meeker  v.  6  Perkins  v.  Kendall,  3  Civ.  Proc. 
Harris,  19  Gal.  278.  (X.  Y.)  240. 

2  Columbus  Watch  Co.  v.  Hoden-  '  Crippen  v.  Hudson,  13  N.  Y.  161. 
pyl,  135  N.  Y.  430,  32  N.  E.  Rep.  See  Dix  v.  Briggs,  9  Paige  (N.  Y.)  595; 
239  ;  Trier  v.  Herman,  115  N.  Y.  163,  Coe  v.  Whitbeck,  11  Paige  (N.  Y.)  42  ; 
21  X.  E.  Rep.  1034.  Henderson  v.   Brooks,  3  T.  &  C.  (N. 

*  Trier  v.   Herman,  115  N.   Y.  163,  Y.)  445. 

21  N.  E.  Rep.  1034.  BBailey   v.    Burton,  8  Wend.    (N. 

*Wrigh1    v.  Campbell,  27  Ark.  637.  Y.)  339  ;  Newdigate  v.  Jacobs,9Dana 

Compare  Catchings  v.    Manlove,    39  (Ky.)18;  Heiatt  v. Barnes, 5Dana(Ky.) 

Miss.  671.  220:  Ballentine  v.  Beall,  4  111.  204. 


§77 


JUDGMENT    INSUIFTCIEXT. 


ceedings\  or  a  creditor's  bill  cannot  be  founded  upon  a 
judgment  that  did  not  bind  all  of  the  debtor's  property.1 
Again,  a  judgment  in  an  attachment  suit,  where  the 
defendant  has  not  been  brought  into  court  so  as  to  make 
it  a  personal  judgment,  is  not  evidence  of  the  debt  in 
another  suit  founded  upon  that  record  ; 2  and  a  creditor's 
bill  cannot  be  brought  upon  a  judgment  barred  by  the 
statute  of  limitations,3  or  upon  a  claim  the  consideration 
of  which  is  illegal.4  And  an  action  based  upon  a  judg- 
ment rendered  against  executors  in  their  representative 
capacity,  is  not  maintainable  to  set  aside,  as  fraudulent  as 
against  creditors,  a  conveyance  of  real  estate  made  by  a 
decedent.5  This  latter  combination  of  facts  might  well 
in  some  instances  result  in  a  seeming  denial  of  justice. 
The  court  said  that  if  the  facts  recited  in  the  complaint 
were  true,  it  was  the  duty  of  the  executors  to  reclaim  the 
real  estate.  Earl,  J.,  observed:  "The  fact  that  the 
fraudulent  grantee  is  one  of  the  executors  furnishes  no 


1  Importers  &  Traders'  Nat.  Bank 
v.  Quackenbush  143  N.  Y.  567,  38  N. 
E.  Rep.  728  ;  Thomas  v.  Merchants' 
Bank,  9  Paige  (N.  Y.)  215;  Rocky 
Mountain  Nat.  Bank  v.  Bliss,  89  N. 
Y.  338. 

3  Manchester  v.  McKee,  9  111.  520. 
"It  is  apparent  that  the  plaintiff 
could  in  no  way  secure  a  judgment 
in  this  State  against  the  assignor 
for  the  amount  of  his  indebtedness 
before  commencing  this  action.  The 
assignor  was  not  within  the  juris- 
diction of  the  courts  in  this  State, 
and  no  personal  service  of  sum- 
mons could  be  made  upon  him  No 
service  could  be  made  by  publication 
of  the  summons  so  as  to  procure  a 
personal  judgment  against  him,  in- 
asmuch as  no  attachment  could  be 
levied  upon  any  property  of  his  in 
this  State  after  the  making  of  the 
assignment.     Code  Civ.  Proc.  §  1217; 


Capital  City  Bank  v.  Parent,  134  N. 
Y.  527,  31  N.  E.  Rep.  976.  The  money 
in  the  hands  of  the  assignee  could  qoI 
be  attached.  McAllaster  v.  Bailey, 
127  N.  Y.  583,  28  N.  E.  Rep.  591  ; 
Patchen  v.  Rofkar,  12  App.  Div.  (X. 
Y.)  477,  42  N.  Y.  Supp.  35." 

3  Fox  v.  Wallace,  31  Miss.  660. 

"•Alexander  v.  Gould,  1  Mass.  165. 
See  Brooks  v.  Wilson,  125  N.  Y.  262, 
26  N.  E.  Rep.  258. 

5  Litchtenberg  v.  Herdtfelder,  103 
N.  Y.  302,  8  N  E.  Rep.  526.  In  New 
York  the  personal  representative  must 
sue  to  annul  a  fraudulent  transfer 
made  by  the  decedenl  (National  Bank 
v.  Levy,  127  N.  Y.  552,  28  N.  E.  Rep. 
592  ;  Barton  v.  Hosner,  24  Hun  (N.Y.) 
467,  Laws  of  1858,  ch.  314;  butthe 
creditor  may  bring  action  where  the 
personal  representative  refuses.  Nat- 
ional Bank  v.  Levy,  L27  X.  Y.  552, 
28  N.  E.  Rep.  592. 


15-  FOREIGN    JUDGMENTS.  §78 

insurmountable  obstacle.  If  she  should  refuse  to  restore  the 
lands  to  the  estate,  she  could  be  removed  from  her  office 
of  executrix,  and  then  the  remaining  two  executors  could, 
under  the  act  of  1858,  disaffirm  the  conveyances  of  the  real 
estate  and  bring  an  action  to  set  them  aside.  Or  the  two 
executors  could  commence  the  action  making1  the  execu- 
trix  a  defendant,  and  in  such  an  action  obtain  for  the 
estate  the  relief  demanded.  If  the  two  defendants 
refused  to  commence  the  action  upon  the  application  of 
the  creditors  or  some  of  them,  they  could  be  compelled  to 
commence  it  by  an  order  of  the  surrogate."  Parties 
experienced  in  suits  instituted  to  annul  fraudulent  con- 
veyances will  readily  appreciate  the  perfunctory  manner 
in  which  these  executors  would  be  likely  to  prosecute 
their  associate. 

§  78.  Foreign  judgments.  —  Usually  a  foreign  judgment 
will  not  suffice  as  the  foundation  of  a  creditor's  bill.1  In 
Buchanan  v.  Marsh,2  which  was  an  action  in  the  courts  of 
the  State  of  Iowa  on  a  judgment  rendered  in  Canada,  an 
injunction  was  asked  restraining  the  defendants  from  alien- 
ating or  encumbering  their  real  estate  until  the  rights  of 
the  parties  should  be  determined  at  law.  Wright,  C.  J., 
said  :  "  Plaintiffs  are  not  judgment-creditors.  For  the 
purpose  of  the  present  inquiry,  their  action  is  like  any 
ordinary  one  upon  a  note,  account,  or  any  simple  contract, 
or  evidence  of  indebtedness.  They  have  a  foreign  judg- 
ment ;  but  until  it  becomes  a  judgment  in  our  courts,  they 
are  no  more  than  creditors  at  large,  and  until  they  obtain 
the  recognition  of  their  claim  by  the  adjudication  of  our 
State  tribunals,  they  have  no  other  or  different  rights  as  to 
the  property  of  their  debtor  than   if  their  demand  was 


Patchen   v.  Rofkar,  12  A.pp.   Div.      Mountain  Nat.  Bank  v.  Bliss, 89  N.  Y. 
(X.  Y.i  175,  12  N.  5T.Supp.35;  Rocky     338. 

2 17  Iowa.  494. 


§  7§  I  '  > REIGN    JUDGMENTS.  I  53 

indorsed  by  a  less  solemn  or  conclusive  proceeding  or 
instrument.  For,  however  effectual  such  judgment  may 
be,  or  whatever  the  faith  and  credit  to  which  it  may  be 
entitled,  it  is  very  certain  that  it  cannot  be  enforced  here 
until  its  validity  is  recognized  and  passed  upon  by  the 
judgment  of  our  courts.  This  being  so  upon  common 
law  principles,  we  know  of  no  principle  upon  which  plain- 
tiffs were  entitled  to  this  injunction.  The  rule  is,  as  far 
as  we  know,  without  exception,  that  the  creditor  must 
have  completed  his  title  at  law,  by  judgment  (if  not  by 
execution)  before  he  can  question  the  disposition  of  the 
debtor's  property."  In  Rocky  Mountain  National  Hank 
v.  Bliss,1  the  court  say  :  "In  requiring-  the  creditor  to 
exhaust  his  legal  remedies  against  the  corporation,  befon  • 
resorting  to  the  personal  liability  of  the  stockholders,  the 
statute  could  not  have  contemplated  that  the  recovery  of 
a  judgment  and  issue  of  an  execution  against  the  com- 
pany in  any  State  of  the  Union  should  be  a  compliance 
with  the  condition.  The  legal  remedies  afforded  by  the 
courts  of  this  State,  where  the  corporation  was  created 
and  is  domiciled,  are  those  which  the  legislature  must 
be  deemed  to  have  intended."  The  weight  of  authority 
sustains  this  view.~  On  the  other  hand,  upon  a  judg- 
ment recovered  in  Pennsylvania,  an  attachment  was  issued 
in  New  Jersey,  and  the  lien  thereby  created  was  held  to 
be  sufficient  to  enable  the  creditor  to  attack  a  fraudulent 
transfer.3  A^ain,  in  Wilkinson  v.  Yale,4  a  creditor's  bill 
was    maintained    in    the    United    States    Circuit    Court, 


1  89  N.  Y.  342.  Eq.  430  ;  Crim  v.  Walker,  79  Mo,  335  ; 

•See    McCartney  v.     Bostwick,    31  Brown  v.  Campbell,  100  Cal.   03.""),  35 

Barb.  (N.  Y.)  390, Overruled  32  N.  Y.  Pac.  Rep.  433. 

53;    Claflin    v.    McDerniott.  12   Fed.  3 Smith  v.  Muirheid,  34    X. -I.  Eq.   I. 

Rep.  375  ;  Davis  v.  Bruns,  23  Hun(N.  See  Watkins  v.  Wortnian,  1!)  W.  Va. 

T.)  648;    Berryman   v.    Sullivan,    21  79;    Chicago    Bridge   Co.    v.    An.ulo- 

Miss.  65;  Tarbell  v.  Griggs,  3  Paige  Amer.  Pack.  Co.,  46  Fed.  Rep.  >l 

(N.   Y.)   207;   Farned   v.    Harris,   19  46  McLean  16.     See  Bullitt  v.  Tay- 

Miss.  366  ;  Davis  v.   Dean,  26  N.  J.  lor,  34  Miss.  708. 


154 


CREDITORS   OF   A    DECEDENT. 


§79 


founded  upon  a  judgment  of  a  court  of  the  State  in  which 
the  Federal  court  was  sitting.1  Still  the  general  rule  is 
that  a  foreign  judgment  ranks  as  a  simple  contract  debt  ; 
it  does  not  have  the  force  and  operation  of  a  domestic 
judgment  except  for  the  purposes  of  evidence,  beyond  the 
jurisdiction  in  which  it  is  obtained.2 

§  79.  Creditors  of  a  decedent— The  question  of  the  neces- 
sitv  of  a  judgment  as  the  foundation  of  a  creditor's  pro- 
ceedings, in  cases  where  the  debtor  is  dead,  has  created 
much  dissension  in  the  courts.  Estes  v.  Wilcox,3  an 
important  case  in  the  New  York  Court  of  Appeals,  is  to 
the  effect  that  a  creditor  without  judgment  and  execution 
returned,  cannot  maintain  an  action  to  enforce  a  resulting 
trust  under  the  statutes  of  uses  and  trusts,  in  lands  pur- 
chased and  paid  for  by  the  debtor,  and  deeded  to  another, 
although  the  debtor  died  insolvent.  It  was  held  that 
these  facts  did  not  dispense  with  the  observance  of  the 


'Compare,  however,  Tompkins  v. 
Purcell,  12  Hun  (N.  T.)  664  ;  Tarbell 
v.  Griggs,  3  Paige  Ch.  (N.  Y.)  208; 
Steere  v.  Hoagland,  39  111.  264  ;  Bul- 
litt v.  Taylor,  34  Miss.  708,  743  ;  Brown 
v.  Bates,  10  Ala.  440;  Goodyear  Vul- 
canite Co.  v.  Frisselle,  22  Hun  (N.  Y.) 
174;  Crim  v.  Walker,  79  Mo.  335; 
Claflin  v.  McDermott,  12  Fed.  Rep. 
375.  Bui  see  to  the  effect  that  a  judg 
ment  in  a  United  States courl  is  to  he 
considered  a  domestic  judgment  of 
the  State  within  which  it  is  rendered. 
Firsl  Nat.  Ilk.  v.  Sloman,42  Neb.  350, 
en  X.  W.  Rep.  589  ;  Ballin  \  Loeb,78 
Wis.  104,  17  N.  W.  Rep.  516;  Embry 
v.  Palmer,  L07  U.  8.  3,  -J  S.  < '.  Rep, 
25  ;  A. lams  v.  Way,  33  Conn.  119.  In 
Johnson  v.  Powers,  139  i'.  S.  156,  159, 
tin-  courl  said  :  "  A  judgment  re- 
covered against  tin-  administrator  of 
;i  deceased  person  in  one  State  is  no 
evidence  of  debt,  in  a  subsequent  suit 
by  tin-  same  plaint  ill'  in  anol  her  state. 


either  against  an  administrator, 
whether  the  same  or  a  different  per- 
son, appointed  there,  or  against  any 
other  person  having  assets  of  the 
deceased.  Aspden  v.  Nixon,  4  How. 
KIT:  Stacy  v.  Thrasher,  6  How.  -11  ; 
McLean  v.  Meek,  18  How.  16  :  Low 
v.  Bartlett,  8  Allen  (Mass.)  259."  As 
to  when  a  foreign  judgment  is  only 
prima  fade  evidence  in  this  country 
and  for  an  exhaustive  review  of. the 
authorities,  see  Bilton  v.  Guyot,  159 
U.  S.  li:'>,  and  cases  cited.  To  im- 
peach a  foreign  judgment,  the  fraud 
must  be  distinctly  alleged,  Ritchie  \. 
McMullen,  159  V.  S.  342;  White  \. 
Hall.  12  Ves.  321. 

'McElmoyle  v.  Cohen,  13  Pet.  312. 
An  administrator  appointed  in  one 
State  cannot  sue  in  another  state, 
Johnson  v.  Powers.  139  U.  S.  156,  11 
S.  ('.  Rep.  525. 

3  67  N.  Y.  264. 


§79  CREDITORS   OP    A    DECEDENT.  [55 

general  rule  that  a  debt  must  be  fixed  and  ascertained  by 
judgment,  and  the  legal  remedies  exhausted.1  It  is  con- 
tended that  the  reason  of  the  rule  that  a  creditor's  debt 
must  be  ascertained  by  judgment  before  proceeding  in 
equity,  does  not  necessarily  fail  by  the  death  of  the  debtor 
before  judgment  recovered  upon  the  debt.  The  creditor 
may  prosecute  the  claim  to  judgment  against  the  personal 
representatives  of  the  debtor,  and  although  it  will  not  be 
conclusive  against  his  heirs  or  his  grantees  by  title 
acquired  before  his  death,  it  would  conclude  the  creditor 
as  to  the  amount  of  his  claim.2  But  we  cannot  discover 
that  the  judgment  against  the  personal  representatives 
would  be  of  much  worth  to  the  creditor.3  This  case  cer- 
tainly extended  the  requirement  to  an  extreme  limit.4 
Recent  cases  uphold  the  rule  in  all  its  strictness  where  the 
action  is  brought  exclusively  for  the  benefit  of  the  com- 
plainant.5 But  by  recent  legislation  creditors  can  bring 
without  judgment  or  execution  an  action  to  set  aside  a 
fraudulent  conveyance,  if  it  is  brought  on  behalf  of  all 
parties  interested.6  In  a  number  of  States  the  principle  is 
asserted  that  no  proof  of  the  recovery  of  judgment  is 
necessary  where  the  debtor    is   dead,7   as  the    judgment 

'See  Allyn  v.   Thurston,  53  N.  Y.  5 Prentiss    v.   Bowden,    145   N.    Y. 

622;    Fox  v.   Mover,  54  N,   Y.     129;  342,  40  N.  E.    Rep.  13  ;  ch.  487,  Laws 

Shaw  v.  Dvvight.  27  N.  Y.  249  :  North  of  1889. 

American  Fire  Ins.  Co.  v.  Graham,  5  6See§112.  See  N.  Y.  Lawsl889,ch 

Sandf.  (N.  Y.)  200  ;  Jones  v.  Green,  1  487  ;  Brown  v.  Brown,  83  Hun  (N.  5  .  I 

Wall.  332,  per  Justice  Field  ;  Chitten-  162,    31   N.  Y.  Supp.    650.     See   Nat. 

den   v.  Brewster,   2   Wall.   196.     See  Tradesmen's   Bank    v.   Wetmore,    124 

also  §  73.  N.  Y.  241,  26  X.  E.  Rep.  2  18. 

'2Estes  v.  "Wilcox,  67     N.  Y.  266;  7  Johnson   v.     Jones,   79   Ind.    141; 

Burnett  v.  Gould,  27  Hun(N.  Y.)  366;  Kipper  v.   Glancey,  2   Blackf.  (Ind.) 

followed  in  Ohm  v.    Superior  Court,  356;    O'Brien     v.    Coulter,    2   Blackf. 

85Cal.   548,  26  Pac.    Rep.    244.     See  (Ind. )  421 ;  Spencer  v.  Armstrong,  12 

O'Connor  v.  Boylan,  49  Mich.  209,  13  Heisk.  (Tenn.)   707;   Love  v.  Mikals, 

N.  W.  Rep.  519;  Fletcher  v.  Holmes,  11  Ind.  227;  Spicer   v.    A.yers,  2  T.  & 

40  Me.  364.  C.  (N.  Y.)  628  :  Reeder  v.  Speake,  I  S. 

3  Lichtenberg    v.  Herdtfelder,    103  C.  293 ;    Haston    v.  Castner,  29  N.  J. 

N.  Y.  302.  Eq.  536;    Offutt   v.    King,    1    MacA. 

4See     Merchants'    Nat.     Rank     v.  (D.  C.)  314;  Fowler's  Appeal,  87  Pa. 

Paine,  13  R.  I.  594.  St.  449  ;  Shurts   v.    Howell,  30  N.  J. 


156  JUDGMENTS   IN   EQUITABLE  ACTIONS.  §  80 

would  be  useless  and  unmeaning.1  In  Hagan  v. 
Walker,''  Mr.  Justice  Curtis,  a  very  learned  and  able 
jurist,  held  that  a  simple  creditor  might  maintain  a  suit  to 
remove  a  covinous  conveyance  and  reach  assets,  against 
the  administrator  and  the  fraudulent  alienee  of  a  deceased 
debtor.  The  court  was  of  opinion  that  such  a  case  was 
not  to  be  treated  as  an  application  by  a  judgment-cred 
itor  for  the  exercise  of  the  ancillary  jurisdiction  of  the 
court  to  aid  him  in  executing  legal  process,  but  came 
under  the  head  of  original  jurisdiction  in  equity.3  The 
authorities  upon  this  subject  cannot  be  reconciled.  The 
best  reasoning  would  seem  to  be  with  the  cases  holding 
that  no  judgment  need  be  recovered  against  the  deced- 
ent's estate,  and  in  favor  of  allowing  the  creditor  both 
to  establish  his  claim,  and  to  discover  assets  to  be  applied 
toward  its  payment,  in  the  same  action.  The  practice  of 
allowing  executors  and  administrators  to  prosecute  actions 
to  annul  fraudulent  transfers,  in  the  interest  and  right  of 
creditors,  will  be  noticed  presently.  Where  the  personal 
representatives  sue,  the  necessity  for  judgment  and  exe- 
cution returned  unsatisfied  is  superseded.4 

S  80.  Rule  as  to  judgments  in  equitable  actions. —  The 
remedy,  it  seems,  must  also  be  exhausted  where  the  judg- 
ment proceeded  upon  was  rendered  in  an  equity  suit. 
Thus  in  Geery  v.  Geery,5  which  was  an  action  brought  to 


Eq.  418;  Phelps  v.  Piatt,  50 Barb.  (N.  10(5;  Bqy  v.  Cook,  31  111.  336;  Merry 

Y.)  430:  Steere  v.  Hoagland,  39  111.  v.  Fremon,  44  Mo.  518;  Snodgrass  v. 

264  ;  Lyons  v.  Murray,  95  Mo.  23,  8  S.  Andrews,  30  Miss.  472.  Compare  Hills 

W.  Rep.  170.  v.  Sherwood,  48  Cal.  386. 

1  Piatt   v.   Mead,   9    Fed.    Rep.   9G  ;  4  Barton  v.  Hosner,  24   Hun  (N.  Y.) 

Loomis  v.  Tifft,   16  Barb.  (N.  Y.)  541,  471.   Compare  National  Bank  v.  Levy, 

(contra,    Estee    v.    Wilcox,   67  N.  Y.  127  N.  Y.   552,   38  N.  E.   Rep.   592; 

264);  Dora  11  \ .  Simpson,    1   Ves.  651 ;  Lichtenberg  v.  Herdtfelder,  103  N.  Y. 

A-lsagerv.  Rowley, 6  Ves.  749  ;  Wright  302,  8  N.  E.  Rep.  526.    See§§  112,113. 

v.  Campbell,  27  Ark.  637.  »  63   N.  V.  252;  overruling  White  v. 

*14How.32    See  Merchants',  etc.  Geraerdt,  1  Bdw.  Ch.  (N.  Y.)  336.    See 

Trans.    Co.  v.    Borland,  53  N.  J.  Eq.  Sullivan   v.    Miller,  106  N.  Y.  641,  13 

282,  31  Atl.  Rep.  272.  N.  E.  Rep.  772. 

'See Green  v.  Creighton,  23  How. 


§   8o  JUDGMENTS    F\    EQUITABLE   ACTIONS.  157 

set  aside  conveyances  of  real  estate  alleged  to  have 
been  made  by  the  defendant,  through  other  persons,  to 
his  wife,  in  fraud  of  creditors,  there  was  no  proof  of  the 
docketing  of  a  judgment,  and  of  execution  returned 
unsatisfied,  and  the  point  was  taken  that  the  ordinarj 
remedy  usually  available  to  creditors  had  not  been 
exhausted.  The  creditor  sought  to  obviate  this  objection 
by  urging  that  the  rule  did  not  apply  where  the  judgment 
sought  to  be  collected  was  rendered  in  an  equitable  action. 
It  appeared  that  the  foundation  of  the  complainant's 
claim  was  a  judgment  rendered  upon  a  partnership 
accounting,  but  the  judgment  had  not  been  docketed,  nor 
had  any  execution  been  issued  upon  it.  Earl,  J.,  said  : 
"I  can  perceive  no  reason  for  a  distinction.  A  suit  in 
equity  to  enforce  satisfaction  of  a  judgment  should  not 
be  allowed  so  long  as  there  is  a  more  simple  and  obvious 
remedy.  The  statute  law  gives  a  remedy  by  execution, 
and  that  remedy,  upon  every  reason  of  public  policy  and 
convenience,  should  be  exhausted  before  a  new  suit 
should  be  allowed  to  be  maintained."  '  Then  Johnson,  J., 
observed,  in  Crippen  v.  Hudson, ~  that  "the  court  of 
chancery  required  executions  to  be  returned  unsatisfied, 
when  issued  on  its  own  decrees,  before  it  would  entertain 
creditors'  bills  founded  upon  them."3  There  is,  however. 
a  rule  running  through  some  of  the  cases  to  the  general 
effect  that,  where  the  claim  asserted  is  purely  equitable, 
and  such  as  a  court  of  equity  will  take  cognizance  of  in 
the  first  instance,  equity  will  at  the  same  time  go  to  the 
extent  of  inquiring  into  the  matter  of  obstructions  which 
have  been   placed  in   the  way  of  enforcing  the   demand.1 


•See  supra,  %%  76,  77.     Clarkson  v.  myer  v.    Crawford,  G   Paige  (N.  Y.) 

De  Peyster,  3  Paige  (N.  Y.)  320  :  S.  p.,  254. 

Adsit  v.  Butler,  87  N.  Y.  585-r»s!t.  *  Halbert   v.  Grant,   -1     Mon.   (Ky.) 

2  13  N.  Y.  161.  583.     Compare  Shea    v.    Knew  ill''  & 

3  See  North  Am.  Fire    Ins.  Co.  v.  Kentucky  R.  R.  Co..  <i  Baxter  (Tenn. ) 
Graham,  5  Sandf .  (N.  Y.)  198  ;  Speigle-  277. 


158  SPECIFIC   LIEN    BY   ATTACHMENT.  §  8l 

For  instance,  where  a  surety  has  paid  money  for  a  princi- 
pal, chancery  has  jurisdiction  of  a  suit  for  its  recovery, 
and  the  complainant  ma)'  add  a  prayer  seeking  to  annul  a 
fraudulent  conveyance  that  stands  in  the  way  of  a  settle- 
ment or  is  calculated  to  defeat  or  embarrass  the  remedial 
action  of  the  court.1 

§  81.  Specific  lien  by  attachment.  —  In  cases  where  the 
sheriff  takes  property  upon  attachment,  which  is  of  a 
nature  subject  to  seizure  and  sale,  but  which  has  been 
fraudulently  transferred,  it  seems  rather  clearly  estab- 
lished that  the  plaintiff,  after  the  service  of  the  attach- 
ment, is  not  considered  a  mere  creditor  at  large,  but, 
according  to  some  of  the  authorities,  one  having  a  specific 
lien  upon  the  goods  attached,  and  that  the  sheriff  has  a 
like  lien,  and  the  right  to  show,  as  a  defense  to  an  action 
for  taking  the  property,  or  in  support  of  his  possession, 
that  the  title  of  the  party  claiming  it  from  the  officer  is 
fraudulent  as  against  the  attaching  creditor.2  Hence  it 
was  held,  in  an  action  brought  by  a  general  assignee  for 
the  benefit  of  creditors,  to  recover  goods  seized  by  a 
sheriff  on  a  warrant  of  attachment  issued  against  the 
assignor,  that  it  was  permissible  for  the  sheriff  to  show 
that  the  assignment  was  fraudulent  and  void  as  against 
the  attaching  creditors.3      There  is  some  confusion,  how- 


1  Waller  v.  Todd,  3    Dana  (Ky.)  508.  App.   704,   4  C.    C.    A.    205,   54   Fed. 

Compare  Smith  v.  Rumsey,  33  Mich.  \lf\>.  93. 

184;    especially   Swan    v.    Smith,   57  s  Carr  \.  Van  Boesen,  26    Hun  (N. 

Miss.  548.     Butsee§85.  5    1  316;  Rinchey  v.  Stryker,  28  N.  Y. 

Gross  v.  Daly,  5    Daly  (N.  Y.i  542  ;  15;  Eess  v.  Hess.  11TN  Y.  308,  22  N.  E. 

Rinchey   v.  Stryker,   28  N.  Y.  4"),  26  Rep.  i»o(i.     In  the  hitter  case  the  court 

How.  Pr.  ?•">  ;  Noble  v.  I  loliin's.  ."i  Hill  says:    '-Goods   and   chattels    fraudu- 

(N     Y.)   194;   Van   Etten   v.   Burst,  6  lently  assigned  by  a  debtor,  to  hinder, 

IlilhN.  F.)311;  Sheaf  e  v.  Sheafe,  40  delay  and  defraud  creditors,  are  at- 

X.   I!    516;  Webster  v.  Lawrence,  47  tachable  in  the  bands  of  his  volun- 

IIuiiiN.  5f.)  565 ;  Lux  v.  Davidson, 56  tary  assignee  al  the  suit  of  ;i  creditor 

Bun(N.   r.)345,9N.   Y.  Supp.  816;  defrauded  bj  the  assignment.      Rin- 

Waples  Platter  Co.  v.  how.  10  U.  S.  chej  v.  Stryker,  28  N.  Y.45;  Frosl  v. 


§  8l  SPECIFIC    LIEN    BY    ATTACHMENT.  1 59 

ever,  in  the  authorities  on  the  question  of  the  right  of  an 
attaching  creditor  to  attack  fraudulent  transfers.  The 
Supreme  Court  of  Nebraska  and  the  courts  of  some  other 
States  deny  such  right  in  a  variety  of  instances.1  The 
Nebraska  case  is  rested  upon  the  authority  of  Brooks  v. 
Stone,2  which  proceeds  on  the  theory  that  the  creditor's 
remedy  at  law  is  not  exhausted,  his  claim  is  not  definitely 
established,  and  perhaps  he  will  never  succeed  in  getting 
a  judgment.3  So  garnishment  process  does  not  create  a 
sufficient  lien  to  uphold  a  creditor's  bill.4  In  New  York, 
a  State  in  which  the  authorities  relating  to  different 
phases  of  our  general  subject  are  burdened  with  sub- 
tle distinctions,  and  show  apparent  conflicts,  it  is  said 
that  an  attaching  creditor  could  not  maintain  an  inde- 
pendent action  in  the  nature  of  a  creditor's  bill  to  set 
aside  a  fraudulent  transfer  of  a  chose  in  action.5  This 
case  rested  upon  the  theory  that  the  attachment,  owing 
to  the  nature  of  the  property,  created  no  lien  ;  but  where 
a  lien  is  in  fact  acquired,  the  rule,  as  already  stated,  may  be 
different,6  as  for  example,  when  the  attaching  creditor  or 


Mott,  34  id.  253.     The  rule  which  pre-  nent  v.  Battey,  18  Kan.  324  ;  Martin 

vents  the  levy  of  an  execution,  under  v.  Michael,  23  Mo.  50  ;  Greenleaf  v. 

similar  circumstances,  upon  equitable  Mumford,   19  Abb.   Pr.   (N.   Y.)  469 

assets  or  choses  in  action,  proceeds  Mills  v.   Block,  30  Barb.  (N.  Y.)  549 

upon  peculiar  grounds,  not  applicable  Melville  v.  Brown,  16  N.  J.  Law,  364 

to  chattels,  of  which  there  can  be  a  McMinn  v.  Whelan,  27  Cal.  300. 

manual  tradition.    Thurber  v.Blanck,  -  19  How  Pr.  (N.  Y.)  395  :    see  Dun- 

50  N.  Y.  80;  Anthony  v.  Wood,  96  levy  v.  Tallmadge,  82  X.  Y.  157. 

id.  180.     If,  therefore,  the  present  ac-  s Compare  Jones    v.  Green,  1  Wall, 

tion  had  been  continued  against  the  331.     See  §  73. 

sheriff,  there  can  be  no  doubt  that  he  4  Bigelow  v.  Andress,  :i!  Ml. 

could  have  defended  the  original  tak-  5  Thurber  v.  Blanck,   50  X.  Y.    80. 

ing    by   showing    that    he    took    the  See  Whitney  v.  Davis,  14S  N.  Y.  260, 

goods  "under    a     valid     attachment  42  N.  E.  Rep.  661,  explaining  People 

against  Hirschhorn  &  Co.,  and   that  ex  rel.  Cauffman   v.  Van   Buren,    136 

the  assignment  to  the  plaintiff    was  N.  V.  252,  32  N.  E.  Rep.  775 

fraudulent  as  to  the  plaintiff  in  the  'Carr    v.  Van  Boesen,  26  linn  (N. 

attachment  suit."    Compare  Bates  v.  Y.)  316  ;  Rinchey  v.  Stryker,  28  V  Y. 

Plonsky,  28  Hun  (N.  Y.)  112.  45.     Compare  Frost  v.  Moll.  3  1  N.  Y. 

1  Weil  v.  Lankins,  3  Neb.  384  ;  Ten-  255  ;  Smith  v.  Longmire,  24  Hun  (N. 


i6o 


SPECIFC   LIEN    BY   ATTACHMENT. 


§8l 


the  sheriff  is  a  defendant,  at  the  suit  of  the  fraudulent 
alienee,  and  relief  will  be,  in  certain  instances,  extended, 
both  in  that  State  and  in  sister  States,  for  the  protection 
and  vindication  of  the  lien.1  The  words  of  the  statute 
usually  make  a  judgment  an  absolute  prerequisite  to 
the  creditor's  bill.  While  it  is  admitted  that  a  creditor 
may  attach  assets  fraudulently  transferred,  it  remains 
doubtful  whether  he  can  use  the  attachment  lien  for  any 
other  than  purely  defensive  purposes,  at  least  until  he 
has  obtained  judgment.  But  where  there  is  danger  that 
assets  fraudulently  transferred  which  have  been  attached 
will  be  taken  from  the  jurisdiction  of  the  court,  an  injunc- 
tion will  be  granted  to  the  attaching  creditor.2  In  Whit- 
ney v.  Davis,3  the  case  of  People  ex  rel.  Cauffman  v.  Van 
Buren,4  is  explained  and  certainly  not  extended.5  In  Bowe 
v.  Arnold6  the  courts  of  New  York  held  that  the  plaintiffs, 
in  an  action  instituted  by  attachment,  could  not  join  with 
the  sheriff  in  a  suit  against  an  assignee  claiming  the  prop- 
erty under  an  assignment  which  it  was  sought  to  set  aside 
in  the  action  as  fraudulent.      It  was  conceded   that  such 


Y.)  257;  Hall  v.  Stryker,  27  N.  Y. 
596  ;  Castle  v.  Lewis,  78  N.  Y.  131  ; 
Ocean  Nat.  Bank  v.  Olcott,  46  N.  Y. 
12  ;  Deutsch  v.  Reilly,  57  How.  Pr. 
(N.  V.)  75  ;  Whitney  v.  Davis,  148  N. 
Y.  260,  42  N.  E.  Rep.  661. 

1  Heyneinan  v.  Dannenberg,  6  Cal. 
378  ;  Scales  v.  Scott,  13  Cal.  76;  Joseph 
v.  McGill,  52  Iowa,  128:  Heye  v. 
Bolles,  33  How.  Pr.  (N.  Y.)  266 ;  Mer- 
riam  v.  Sewall,  8  Cray  (Mass.)  316; 
Falconer  v.  Freeman,  I  Saudi'.  Cli. 
i  X.  Y.i  565  :  Stone  v.  Anderson,  26  N. 
II.  506  ;  Dodge  v.  Griswold,  8  N.  H. 
425;  Hunt  v.  Field,  9  N.  J.  Eq.  36; 
Williams  v.  Michenor,  11  X.  .) .  Eq. 
520:  shear.-  v.  Sheafe,  i<»  X.  ii.  516: 
Whit  lies  v.  Davis.  IIS  X.  Y.  260,  42 
X.   E.  Rep.  661, 


2  People  ex  rel.  Cauffman  v.  Van 
Buren,  136  N.  Y.  252,  32  N.  E.  Rep.  775. 

3 148  N.  Y.  256,  42  N.  E.  Rep.  661. 

4 136  X.  Y.  252,  32  N.  E.  Rep.  775. 

6 "Where  the  attachment  is  issued 
against  property  of  nonresident 
debtors,  the  righl  maj  now  be  en- 
forced in  New  York  by  an  act  ion  in 
aid  of  the  attachment.  Chap.  504,  X. 
Y.  Laws  1889;  Hardin-  v.  Elliott,  91 
Hun  (N.  Y.)  506,  36  N.  Y.  Supp,  648. 
Tn  New  .lersev  an  affirmative  action 
may  lie  brought  by  a  creditor  having 

a  lien.  Cocks  v.  Varnev,  45  X.  .1.  Eq. 
72,  17  Atl.  Rep.  10S.  See  Taylor  v. 
Branscombe,  71  Iowa.  534,  38  X.  W. 
Rep.  400. 

•  is  Weekly  Dig.  (X.  Y.)  326;  31 
I  Inn  (N.  Y.)  256  ;  affi'd  101  X.  Y.  652. 


§  8l  SPECIFIC    LIEN   BY   ATTACHMENT.  161 

parties  might  join  in  that  State,1  in  actions  to  collect 
debts,  effects,  or  choses  in  action  attached  by  the  sheriff,2 
but  the  court  observed  that  this  was  not  such  a  case. 
The  counsel  sought,  upon  the  authority  of  Bates  v. 
Plonsky,3  to  maintain  the  action  as  being  instituted  for 
the  protection,  preservation,  and  enforcement  of  the  lien 
obtained  by  the  supposed  levy  of  the  attachment,  but  the 
court  said  that  the  precedent  cited  was  a  suit  of  a  differ- 
ent nature,  and  was  prosecuted  merely  to  enjoin  the 
distribution  of  a  fund  until  the  rights  of  the  conflicting 
claimants  could  be  established.  It  is  observed  in  the 
course  of  the  opinion  that  a  creditor  could  only  file  a  bill 
to  annul  a  fraudulent  transfer  after  return  of  execution 
unsatisfied,4  or  in  aid  of  the  execution  after  the  recovery 
of  a  judgment.5 

The  judgment  in  this  case  may  have  been  correct,  but 
in  view  of  the  other  authorities  cited,  the  decisions  of 
that  State  relative  to  the  rio-hts  of  an  attaching  creditor 
are  not  in  a  very  clear  or  satisfactory  condition.  We 
incline  to  deny  that  a  mere  attaching  creditor  can,  under 
any  correct  theory  of  law  and  without  legislative  aid, 
become  an  actor  in  a  creditor's  suit.  Indeed  the  under- 
lying principles  of  the  cases  in  which  it  is  sought  to  make 
a  lien  acquired  by  the  provisional  remedy  of  attachment 
the  practical  equivalent  of  a  lien  procured  by  final  judg- 
ment, are  subversive  of  the  time-honored  policy  and  rule 
of  the  courts,  that  a  creditor's  bill  must  be  founded  upon 


1  See  N.  Y.  Code  Civ.  Pro.  §£  655-667.  N.  Y.  261,  82  N.  E.  Rep.  775  ;   Keller 

'•'Compare  Thurber  v.  Blanck,  50  N.  v.  Payne,  22  Abb.  N.  C.  (N.  Y.) 

Y.  86;  People  ex  rel.  Cauffman  v.  Van  1  N.  Y.  Supp.  148  ;  W  hitnej  \.  I 

Buren,   136  N.  Y.  252,   32  N.  E.  Rep.  148  N.  Y.  256,  42  N.  E.  Rep.  661. 
775  ;  Whitney  v.  Davis,  148  N.  Y.  260,  4  See  Chatauque  Co.  Bank  v.  Risley, 

42  N.  E.  Rep.  661;  Lynch  v.  Ciary,  52  10  N.  Y.  370  ;  Cole  v.  Tj  Ler,  65   N.  Y. 

N.  Y.  183.  73  :  Ballou  v.  Jones.  13  Hun  (N.  Y.) 

3  28  Hun  (N.  Y.)  112.     See  People  629. 
ex  rel.  Cauffman  v.  Van  Buren,  136         5See  Adsit  v.  Butler,  87  X.  Y.  585. 

II 


1 62  SPECIFIC   LIEN   BY   ATTACHMENT.  §  8 1 

a  definite  claim,  established  by  a  judgment  at  law.1  If 
the  innovations  in  modern  procedure  call  for  the  abroga- 
tion of  this  old  chancery  practice,  it  should  not  be  super- 
seded by  indirection,  but  deliberately,  and  by  some  care- 
fully formulated  legislative  substitute.  The  requirement 
is  neither  artificial  nor  technical  ;  it  is  a  necessary  pro- 
tection and  safeguard  to  the  debtor.  Manifestly,  where 
the  property  in  controversy  is  of  such  character  as  not  to 
be  susceptible  to  an  attachment  lien,  the  attaching  cred- 
itor cannot,  either  as  plaintiff  or  defendant,  avoid  or 
attack  any  alienation  or  disposition  that  may  have  been 
made  of  it ;  he  has  no  status  and  no  lien.  Where,  how- 
ever, an  attachment  lien  has  been  actually  acquired,  and 
the  officer  or  attaching  creditor  is  made  defendant  in  a 
suit  by  the  fraudulent  alienee,  the  efficacy  of  the  lien 
may  be  vindicated  by  setting  up  the  fraud  by  way  of 
defense,  because  the  plaintiff  will  be  forced  to  recover 
upon  the  strength  of  his  own  title,  and  if  it  be  shown  that 
such  title  is  affected  with  fraud  as  regards  the  defendant 
or  attaching  creditor,  the  plaintiff  will  fail  to  make  out  a 
good    title.2     Chancellor    Green    said    in    New    Jersey: 


1  See  §  73.  Wales  v.  Lawrence,  36  attaching  creditor  to  maintain,  ordi- 
N.  J.  Eq.  209.  narily,  prior  to  judgment  and  execu- 

2  In  Whitney  v.  Davis,  148  N.  turn,  nor  to  introduce  any  innovation 
Y.  201,  42  N.  E.  Rep.  661,  Gray,  upon  the  settled  rule  It  was  con- 
J.,  said:  ''All  that  the  Cauffman  sidered,  however,  that  where  the 
case  (People  ex  rel.  Cauffman  v.  debtor's  property  was  about  being 
Van  Buren,  136  N.  Y.  252,  32  N.  E.  transferred  beyond  the  reach  of  the 
Rep.  775)  decided  was,  that  special  sheriff,  in  whose  hands  it  was,  a  case 
circumstances  mighl  exist  and  if  was  presented  where  the  court  might 
shown  thai  they  would  authorize  the  properly  extend  its  equitable  arm  and 

granting  of  equitable  relief  at  the  in-  stay   the  threatened  transfer 

stance    <«t'    an      attaching    creditor,  What  reason  is  there,  or  what  justifi- 

though  prior  to  judgment  and  execu-  cation  exists  for  allowing  an  attach- 

tion,  in  order  to  preserve  tin-  debtor's  ing  creditor,  before  hi'  has  established 

property  in   a  condition  where  a   re-  his  claim   against  his  alleged   debtor, 

covery    by    the    attaching     creditor  to  attack  an  apparently  valid  transfer 

could  be  made  effective.     It  was  not  of  real  estate?"  An  attaching  creditor 

mtended   to  hold    thai   an  equitable  may  proceed  by  creditor's  hill  in  New 

action   was  within  the  power  of  the  Jersey.     Francis  v.  Lawrence,  48  N. 


§  82  PROPERTY   TAKEN   IN   NAME   OF   THIRD    PARTY.  1 63 

"  Equity  will  not,  of  course,  grant  its  aid  to  enforce  legal 
process."  1 

§  82.  Property  of  the  debtor  taken  in  name  of  third  party.  — 
The  rules  of  procedure  in  cases  where  property  has  been 
paid  for  by  the  debtor,  but  the  title  taken  in  the  name  of 
third  parties,  have  already  been  noticed.3  The  New 
York  Court  of  Appeals,  in  The  Ocean  National  Bank  v. 
Olcott,3  said,  ill-advisedly  as  we  think,  that  it  was  diffi- 
cult to  perceive  the  reason  for  any  distinction  between 
the  rights  of  creditors  as  to  the  property  fraudulently 
transferred  by  the  debtor  personally,  and  property  paid 
for  by  him  and  transferred  by  the  vendor  or  grantor  to  a 
third  person.  "  Why,"  said  Chief-Justice  Church,  "  should 
creditors  have  different  and  superior  rights  to  enforce 
their  debts,  in  the  latter  case,  to  those  enjoyed  in  the 
former?  I  can  see  no  reason  for  any  distinction,  and  I 
do  not  believe  the  statute  has  created  any.  But,  in  either 
case,  the  commencement  of  an  equitable  action  is  neces- 
sary to  constitute  a  lien  or  charge,  in  any  legal  sense, 

upon  the  land The  harmony  and  analogies  of  the 

law  are  better  preserved  by  requiring  all  available  legal 
remedies  to  be  resorted  to,  as  a  preliminary  requisite  to 
an  action  for  the  application  of  the  trust  property."  In 
Ohio  it  is  said  that  the  statute4  does  not  apply  to  cases 
where  the  title  is  taken  in  the  name  of  a  third  party  for  the 


J.  Eq.  512,  22  Atl.  Rep.  259.     An  at-  77  N.  Y.   219;  Scott  v.   Morgan,  94  N. 

taching  creditor  was  allowed  in  Na-  Y.  509,  as  bearing  upon   the  jurisdic- 

tional  Park  Bank  v.  Goddard,  131   N.  tion  wnich  was  hotly  contested. 

Y.  494,  to  file  a  bill   and   secure  an  >  Robert  v.  Hodges,  16  N.  J.  Eq.  303. 

injunction,  the  appointment  of  are-  See  Wales  v.  Lawrence,  36  N.  J.   Eq. 

ceiver   and   the  sale  of  an   attached  209. 

stock  of  goods,  also  claimed  by  numer-  2  See  §  57. 

ous     defendant   creditors     who     had  346N.  Y.  23. 

revoked  the  sales  for  fraud  and  had  '  Swan  &  Sayler's   Stats.  397,    regu- 
brought  replevin  suits,  each  claiming  lating  the  mode  of  administering  as- 
disputed    portions     of    the    partially  signments  in   trust  for  t  he   benefit   "| 
manufactured    stock.     Compare   Su-  creditors. 
pervisors  of  Saratoga  Co.   v.  Deyoe, 


164  PROPERTY   TAKEN   IN   NAME   OF   THIRD    PARTY.  §  82 

reason  that  the  avoidance  of  the  conveyance  merely  leaves 
the  title  in  the  grantor,  which,  of  course,  does  not  benefit 
the  creditor; 1  such  an  interest  it  is  argued  must  be  reached 
by  a  creditor's  bill.-  It  cannot  be  sold  on  execution.3  This 
question  arose  in  Spaulding  v.  Fisher.4  It  was  held  that 
property  purchased  with  the  funds  of  the  debtor,  though 
taken  in  the  name  of  a  third  party,  was  the  property  of  the 
debtor  as  regards  his  creditors.  The  court  said:  u  Its 
fraudulent  transfer  and  concealment  is  equally  established, 
whether  the  transfer  is  directly  from  the  debtor  or  from 
another  by  his  direction  and  procurement,  the  property 
transferred  having  been  purchased  with  his  funds.  The 
object  of  the  statute  is  to  afford  a  remedy  to  the  creditor 
against  any  one  to  whom  the  property  of  his  debtor  no  mat- 
ter in  what  it  consisted,  or  how  situated,  has  been  fraudu- 
lently transferred  for  the  purpose,  and  with  the  intent  on 
the  part  of  the  debtor  transferring,  and  the  individual 
receiving  such  transfer,  to  conceal  the  same,  so  as  '  to  secure 
it  from  the  creditors  and  prevent  its  attachment  or  seizure 
on  execution.'"5  Even  where  by  statute  his  interest  can 
be  sold  on  attachment  or  execution  it  has  been  held  that 
this  did  not  change  the  nature  of  the  interest  which  those 
claiming   under   him   take  in  the  property  so  conveyed. 


1  Shorten  v.  Woodrow  34,  O.  S.  645.  1844,  c.  107,  took  effect,  land  paid  for 

2  Bomberger  v.  Turner,  13  O.  S. 263.  and  occupied  by  a  debtor,  the  legal 
See  Martin  v.  Elden,  32  O.  8.  282.  title  to  which  had  never  been  in  him, 
Compare  Combs,  v.  Watson,  32  0.  S.  but  had  been  conveyed  to  another  per- 
228.  son  in  order  to  secure  it  from  hiscred- 

3Garliel<]  v.  Hatmaker,15  X.  Y.  !?.">.  itors,  could  not  be  attached  or  taken  on 

An  equitable  trust  arises  in  favor  of  execution  as  his  property.     Hamilton 

creditors  enforceable  in  equity.  Brown  v.  ( !one,  99  Mass.  47  s;  Howe  \ .  Bishop, 

v.  Chubb,  i:::.  \.  Y.  177,  :!l  X.  E.  Rep.  3    Met.     (Mass.)  26.     See  also    Gar- 

1030.    Batesv.  Ledgerw I  M'f'gCo.,  field  v.  Hatmaker,  15  N.  Y.475;Web- 

130    X.    Y.    205,29    X.   E.   Rep.    102.  ster  v.  Folsom,  58  Me.  230.     Compare 

Robertson  v.  Sayre,   184  N.Y.  '■><).  :ii  Guthrie  v.  Gardner,  19  Wend.  (N.  Y.) 

N.  E.  Rep.  250.  114 ;  and  see  Arbuckle  Brothers  Coffee 

'•-)7  Me.  415.      See  §  57.  Co.   v.     Werner,   77  Tex.    43;    13  S.  W. 

In  Massachussetts,  until  the  St.  of  Rep.  963. 


§   83  WHEN  JUDGMENT    tS    UNNECESSARY.  [65 

As  to  them  the  conveyance  is  valid,  so  that  e.  g.  his  wife 
is  not  entitled  to  any  interest  in  the  propertyby  virtue  of 
the  marriage.1 

§  83.  When  judgment  is  unnecessary.— It  has  been 
decided,  though  the  question  is  a  debatable  one,  that  in 
special  cases,  if  the  execution  cannot  be  issued  in  the  State 
in  which  the  land  lies,  it  will  suffice  if  issued  in  the  State  of 
the  debtor's  residence  ;2  and  if  the  debtor's  property  is  in 
the  hands  of  a  receiver  appointed  by  the  court,  so  that  a 
levy  cannot  be  made,  levy  is  excused; 3  the  same  rule 
applies  when  the  property  is  in  the  hands  of  an  assignee 
in  bankruptcy;4  and  where,  by  reason  of  special  circum- 
stances, the  creditor  has  no  remedy  at  law,  it  has  been 
argued  that  the  legal  remedy  cannot  be  exhausted  before 
proceeding  in  equity.5  McCartney  v.  Bostwick  6  seems 
to  be  in  its  general  statements  overruled  by  Estes  v. 
Wilcox ; 7  at  least  the  courts  have  so  held.8  A  distinc- 
tion is  drawn  in  McCartney  v.  Bostwick  between  prop- 
erty fraudulently  alienated  by  the  debtor,  and  property 
paid  for  by  him  and  taken  in  the  name  of  a  third  party. 
In  the  former  instance,  the  proceeding  is  to  remove  imped- 
iments in  the  way  of  reaching  the  debtor  s  property;  in  the 
latter,  it  is  to  charge  with  a  statutory  lien  the  property  of 
a  third  party,  which  the  debtor  never  owned  ;  in  the  one 
case,  it  is  to  exercise  auxiliary  jurisdiction  in  aid  of  legal 
process  ;  in  the  other  to  enforce  a  trust  of  which  the  courts 


1  Marshall  v.  Whitney,  43  Fed.  Rep,  See   also  Adsit    v.    Sanford,  23  Hun 

343  ;  but  see  Whitney  v.  Marshall,  138  (N.  Y.)  49. 

Ind.  472,  37  N.  E.  Rep.  964.  4  Barker  v.  Barker,  Assignee,  2  Fed. 

-  McCartney  v.  Bostwick,  32  N.  Y.  Cas.  807. 

53.  6Kamp  v.  Kamp,  46  How.  Pr.  (N. 

3  Stewart    v.    Beale,  7  Hun  (N.  Y.)  Y. )  143  ;  overruled  in  other  respects,  59 

405.    This  case  contains  an  important  N.  Y.  212.     See  §  80. 

review  of  the  authorities,  and  is  af-  632  N.   Y.  53.     Compare    Niver   v. 

firmed    without    an  opinion    in    the  Crane,  98  N.  Y.  40. 

Court  of  Appeals.     See  68  N.  Y.  629.  7  67  N.  Y.  264. 

8 Evans  v.  Hill,  18  Hun  (N.  Y.)  465. 


l66  WHEN   JUDGMENT   IS    UNNECESSARY.  §  83 

of  law  have  no  jurisdiction.  We  have  already  shown  that 
Chief-Justice  Church,  in  a  later  case,  could  see  no  reason 
for  this  distinction.1  In  a  controversy  which  arose  in 
Georgia,  it  was  decided  that  where  a  creditor  of  an  insol- 
vent estate  was  under  injunction  not  to  sue  the  executor, 
this  constituted  a  good  excuse  for  not  obtaining  judgment 
on  his  debt  before  proceeding  by  bill  in  equity  to  cancel  a 
voluntary  conveyance  made  by  the  testator  in  his  lifetime.2 
The  court  in  this  case  seemed  determined  to  favor  the 
creditor,  for  it  was  held  that  if,  during  the  pendency  of  the 
bill,  a  judgment  or  decree  establishing  the  amount  of  the 
debt  was  obtained  against  the  executor,  it  might  be  brought 
into  the  bill  by  way  of  amendment,  and  used  as  effectively 
as  if  the  adjudication  had  preceded  the  filing  of  the  bill, 
and  had  been  originally  alleged  therein.3  Where  the 
performance  of  a  condition  becomes  impossible  or  illegal, 
performance  is  excused.4  So  in  some  States  creditors 
may  proceed  against  an  insolvent  estate  without  the 
return  of  an  execution.5  In  Case  v.  Beauregard,6  Mr. 
Justice  Strong  observed  :  "  But,  after  all,  the  judgment 
and  fruitless  execution  are  only  evidence  that  his  legal 
remedies    have    been    exhausted,    or   that  he    is  without 


■The  Ocean  National  Bank  v.Olcott,  pare  Crompton  v.  Anthony,  13  Allen 

46  N.  Y.  22.     See§  82.  (Mass.)  36;  Wright  v.    Campbell,  27 

'Compare  Shellington  v.  Howland,  Ark.   637  ;  Everett  v.  Raby,  104  N.  C. 

53  N.  Y.  371.  479,    10  S.    E.    Rep.    526;   Gilbert   v. 

3  Cleveland   v.    Chambliss,    64    Ga.  Stockman,  81  Wise.  802,  51  N.  W.  Rep. 

352.  1076,  52  Id.  1045. 

4 Shellington  v.  Howland,  53  N.  Y.  •  101    U.  S.  690.     "This  rule  is  not 

374;  Cohen  v.  N.  Y.  Mutual  Life  Ins.  so  unrelenting  as  to  deny  to  a  party 

Co.,  50  N.  Y.  610;  Semmes  v.  Hartford  the  interposition  of  the  equity  powers 

Ins.  Co.,  13  Wall.  158.  of  the  court  when  the  situation  is  such 

5  Steere   v.    Hoagland,   39  111.    264  ;  as  to  render  impossible  the  aid  of  a 

McDowell  v.  Cochran,  11  111.  31  ;  Bay  court  of  law  to  there  take  the  pre- 

v.  Cook,  31  111.  336  ;  Hagan  v.  Walker,  liminary    steps    and    produce     what 

14  How.  32  ;  Merry  v.  Fremon,44  Mo.  ordinarily  may  be  treated  as  the  con- 

518;  Haston  v.  Castner,  29  N.  J.  Eq.  dition  precedent  to  the  application 

536;   Johnson   v.  Jones,  79  Ind.  141;  for  equitable  relief."   National  Trades- 

Platt  v.  Mead,  9  Fed.  Rep.  96.     Com-  men's  Bk.  v.  Wetmore,  124  N.  Y.  249. 


§  83  WHEN  JUDGMENT    IS    UNNECESSARY.  1 67 

remedy  at  law.  They  are  not  the  only  possible  means  of 
proof.  The  necessity  of  resort  to  a  court  of  equity  may 
be  made  otherwise  to  appear.  Accordingly  the  rule, 
though  general,  is  not  without  many  exceptions.  Neither 
law  nor  equity  requires  a  meaningless  form,  ''Bona,  sed 
imposs'ibilia  non  cogit  lex'  It  has  been  decided  that 
where  it  appears  by  the  bill  that  the  debtor  is  insolvent 
and  that  the  issuing  of  an  execution  would  be  of  no 
practical  utility,  the  issue  of  an  execution  is  not  a  neces- 
sary prerequisite  to  equitable  interference.1  This  is  cer- 
tainly true  where  the  creditor  has  a  lien  or  a  trust  in  his 
favor."2  The  observations  of  Mr.  Justice  Strong  were 
not  accorded  hearty  approval  for  a  long  time  in  the 
Supreme  Court  itself.3  The  rule  laid  down  by  him  has 
been  followed,  however,  in  many  cases,  especially  where  a 
trust  existed  in  favor  of  the  creditor.4  In  Russell  v. 
Clark,5  Chief-Justice  Marshall,  in  discussing  the  general 
subject,  said  :  "  If  a  claim  is  to  be  satisfied  out  of  a 
fund,  which  is  accessible  only  by  the  aid  of  a  court  of 
chancery,  application  may  be  made,  in  the  first  instance, 
to  that  court,  which  will  not  require  that  the  claim  should 
be  first  established  in  a  court  of  law."6  Then,  as  we 
shall   presently   see,7    in  cases  where  the  statute  gives  a 


'Citing  Turner  v.  Adams,  46  Mo.      Pack.  Co.,  46  Fed.  Rep.  584 ;  Consoli- 


95  ;  Postlewait  v.  Howes,  3  la.  365 
Ticonic  Bank  v.  Harvey,  16  la.  141 
Botsford    v.    Beers,     11    Conn.  369 


dated  T.  L.  Co.  v.  Kansas  City  Var- 
nish Co.,  45  Fed.  Eep.  7  ;  Kanka- 
kee   "Woolen    Mill    Co.    v.     Kampe, 


Payne   v.    Sheldon,   63  Barb.  (N.  Y.)  38  Mo.  App.  234;  Reyburn  v.  Mitch- 

169.     See  Fink  v.   Patterson,  21  Fed.  ell,  106  Mo.   365,   16  S.  W".   Rep.  592  ; 

Rep.  609.  Sage   v.    Memphis,    etc.    R.    R.    Co., 

-  See  Austin  v.  Morris,  23  S.  C.  403.  125  U.  S.  376,  8  S.  C.  Rep.  887  ;  Blanc 

3  Taylor  v.   Bowker,  111  U.  S.  110,  v.  Paymaster  Mining  Co.,  95  Cal.  524. 
4    S.     C.  Rep.   397;  People's  Savings  30  Pac.  Rep.  765. 

Bank  v.  Bates,  120  U.  S.   556,  7  S.  C.  5  7  Cranch  89. 

Rep.    679.      Compare    Thompson    v.  6  See  Shufeldt  v.  Boehm,  96  111.563; 

Van  Vechten,  27  N.  Y.  568,  582;  Bax-  Steere  v.  Hoagland,  39  111.  264. 

ter  v.  Moses,  77Me.  476  1  Atl.  Rep.  7  See  Chap.  VII.  Bennett  v.  Minotl 

350  ;  Jones  v.  Greene,  1  Wall.  330.  28  Oreg.  339,  44  Pac.  Rep.  288. 

4  Chicago  Bridge  Co.  v.  Anglo- Amer. 


1 68  ABSCONDING   DEBTORS.  §  84 

new  remedy  in  favor  of  creditors  at  large,  by  giving  to 
an  assignee  or  trustee  for  their  benefit  a  statutory  right 
to  property  conveyed  in  fraud  of  creditors,  this  statutory 
right  takes  the  place  of  the  specific  lien  required  by  law 
as  a  condition  of  the  ri^ht  of  individual  creditors  to  con- 
test  the  validity  of  the  transfers.1 

§  84.  Absconding-  and  non-resident  debtors. —  The  fact 
that  the  debtor  is  a  non-resident,  and  has  no  property 
within  the  State,  has  been  considered  not  to  be  proof 
that  all  the  legal  remedies  have  been  exhausted. ~  If  he 
has  fraudulently  alienated  real  property  within  the  State, 
his  interest,  whatever  it  may  be,  must  be  first  reached  by 
attachment.3  Where,  however,  the  debtor  has  absconded 
so  that  no  personal  judgment  can  be  obtained  against 
him,  and  there  is  no  statutory-  proceeding  by  which  his 
property  can  be  reached,  it  has  been  held  that  a  creditor's 
bill  will  lie  in  the  first  instance,  and  from  the  necessity  of 
the  case,4  and  where  a  State  statute  provides  that  in  case 
of  fraudulent  alienations  a  trust  results  to  creditors 
where  the  debtor  is  a  non-resident  and  has  no  property 
in  the  State,  an  action  to  enforce  the  trust  may  be  begun 
without  first  obtaining  judgment.5  It  is  considered  as 
analogous  to  a  proceeding  to  reach  and  subject  the 
equities  of  a  deceased  debtor  to  the  claims  of  creditors, 
or  to  satisfy  a  debt  from  a  specific  equitable  fund,  as  to 
enforce  a  lien,  in    neither  of  which    cases    is   a    personal 


'Southard  v.  Benner,  72  N.  Y.427;  Greenway  v.  Thomas,  14111.  372. Con- 
Barton  v.  Hosner,  24  Hun  (N.  Y.)  471;  tra,    Anderson    v.    Bradford,    5  J.J. 
Cadj   v.  Whaling,  7  Biss.  430;Cragin  Marsh.  (Ky.)  69 ;  Scott  v.  McMillen,   1 
v.  Carmichael, 2  Dillon,  520;  Piatt,  As-  Litt.  (Ky.)  302. 
signee.v.  Matthews,  10  Fed.  Rep.  280.  4See  Turner  v.  Adams,  46  Mo.  95  ; 

'Ballou  v.  Jones,   13  Hun  (N.  Y.)  Pope  v.  Solomons,  36  Ga.  541 ;  Taylor 

631.      I!m  1     see    National   Tradesmen's  v.   Branscombe,  74  la.  534,  38  N.  W. 

Bank  r.Wetmore,  124  N.  Y.  241,  20  N.  Rep.  400. 
E.  Rep.  548.  Overmire   v.  Ha  worth,   48   Minn. 

3Dodd  v.   Levy,  10  Mo.   App.   121;  372,  51  N.  W.  Rep.  121. 


§85  PRACTICE   IN   INDIANA,   NORTH    CAROLINA,  ETC.  169 

judgment  required.1  A  full  review  of  the  authorities 
upon  this  question  may  be  found  in  Merchants'  National 
Bank  v.  Paine,2  an  important  and  well-considered  case. 
The  court  there  maintain  the  right  of  a  creditor,  before 
the  recovery  of  judgment,  to  file  a  bill  to  reach  equitable 
assets  where  the  absconding  debtor  had  left  no  legal 
assets  liable  to  attachment,3  and  cite  in  support  of  their 
conclusion  cases  from  Kentucky,4  Virginia,5  Indiana/' 
South  Carolina,''  and  Missouri,8  and  adopt  the  views  of 
the  Supreme  Court  of  Missouri,  already  quoted.  Where 
a  judgment  by  personal  service,  or  jurisdiction  by  attach- 
ment, are  both  impossible,  the  courts  of  New  York  are 
now  inclining  to  allow  a  simple  contract  creditor  to  file  a 
creditor's  bill.9 

§  85.  Practice  in  Indiana,  North  Carolina,  Alabama  and 
Texas.  —  In  some  States  where  the  tendency  to  dispense 
with  the  prerequisite  of  a  judgment  has  been  introduced  a 
novel  practice  as  to  joinder  of  claims  prevails.  Thus  a  claim 
to  cancel  a  conveyance  of  real  property  from  a  husband  to 
his  wife,  as  being  fraudulent  against  creditors,  may  be 
united  with  a  demand  against  the  husband  arising  out  of 
contract.10   Then  in  an  action  against  a  husband  and  wife, 


■Pendleton  v.  Perkins,  49  Mo.  565.  5  Peay  v.  Morrison's  Exrs.,  10  Gratt. 

Compare  O'Brien  v.  Coulter,  2  Blackf.  (Va.)  149. 

(Ind.)  421;  Russell  v.  Clark,  7  Cranch  6  Kipper  v.  Glancey.  2  Blackf.  (Ind.) 

89,    per  Chief -Justice  Marshall.     See  356;    O'Brien    v.    Coulter,  2    Blackf. 

§79.  (Ind.)  421. 

513R.  I.  592.  Tarrar  v.  Haselden,    9  Rich.    Eq. 

3  Scott  v.    McMillen,    1    Litt.  (Ky.)  (S.  G)  331. 

302.       Compare    Russell  v.  Clark,    7  8 Pendleton  v.  Perkins,  49  Mo.    565. 

Cranch  69,  89  ;  Miller  v.  Davidson,  8  9Nat.    Tradesmen's    Bank    v.   Wet. 

111.  518,  522;  Greenway  v.  Thomas,  14  more,  124  N.Y.  241,  26N.  E.   Rep.  548; 

111.  271;  Anderson  v.  Bradford,  5  J.  J.  Patchen  v.  Rofkar,   12  App.  Div.  (X. 

Marsh.  (Ky.)  69;  Meux  v.  Anthony,  11  Y.)  475,   42  X.  Y.    Supp.  35.      See  Le 

Ark.  411.     See  Turner  v.  Adams,  46  Fevre  v.  Phillips,  81  Hun   (N.  Y.) 

Mo.   95,  99;   McDermutt  v.  Strong,  4  30  N.  Y.  Supp.  r09. 

Johns.  Ch.  (N.  Y.)  687,  689.  10Lindley  v.  Cross,  31  Ind.  106. 

4 Scott    v.    McMillen,    1  Litt.  (Ky.) 
302. 


170  PRACTICE   IN   INDIANA,  NORTH    CAROLINA,    ETC.  §  85 

instituted  to  obtain  judgment  against  the  husband  for 
the  price  of  goods  sold,  a  fraudulent  conveyance  from  the 
husband  to  the  wife  may  be  set  aside  so  as  to  let  in  the 
lien  of  the  judgment  when  recovered.1  In  North  Caro- 
lina the  court  declares  it  obvious  that  the  rule  exacting  the 
recovery  of  a  judgment  at  law  before  proceeding  inequity 
grew  out  of  the  relations  of  the  two  courts  under  the 
former  system,  one  acting  as  an  aid  to  the  other,  and 
that  it  was  essential  to  the  harmony  of  their  action  in 
the  exercise  of  their  separate  functions  in  the  administra- 
tion of  the  law.  Chief-Justice  Smith  continuing,  said  : 
"  It  must  of  necessity  cease  to  have  any  force,  when  the 
powers  of  both,  and  the  functions  of  each,  are  committed 
to  a  single  tribunal,  substituted  in  place  of  both.  Why 
should  a  plaintiff  be  compelled  to  sue  for  and  recover 
[judgment  on]  his  debt,  and  then  to  bring  a  new  action  to 
enforce  payment  out  of  his  debtor's  property  in  the  very 
court  that  ordered  the  judgment  ?  Why  should  not  full 
relief  be  had  in  one  action,  when  the  same  court  is  to  be 
called  on  to  afford  it  in  the  second  ?  The  policy  of  the 
new  practice,  and  one  of  its  best  features,  is  to  furnish  a 
complete  and  final  remedy  for  an  aggrieved  party  in  a 
single  court,  and  without  needless  delay  or  expense."2 
The  same  rule  is  recognized  in   Texas,8  and  in  Alabama 


1  Prank  v.  Kessler,  30  Ind.  8.  77  Tex.  43,  13  S.  W.  Rep.  963.     But  it 

8  Bank  v.    Harris,    84    N.    C.    210.  was  held  in  Cassaday  v.  Anderson,  58 

Claims  for  judgment  ujjou  coupons  Tex.  535,  that   while  as  between  two 

and  for  a  mandamus  to  coerce  pay-  creditors  if  one  lias  already  obtained 

ment  were  joined.  McLendon  v.  Com-  his  judgment  and   instituted  proceed- 

missioners  of  Anson,  71  N.  C.  38.    So  ings  to  set  the  fraudulent  conveyance 

it  was  held  competent  to  proceed  in  aside,  lie  will   have  the  right  to  have 

the  same  action  against  an  insolvent  his  debl  satisfied  out  of  the  property, 

debtor  bank  and  against  stockholders  but  the  bringing  of  a  suit  to  set  aside 

upon  their  individual  liabilities  under  the  conveyance  by  a  simple  contract 

the  charter.    Glenn  v.  Farmers"  Bank,  creditor  gives  him  no  priority  over  the 

72  X.  C.  626.  purchaser  at  an    execution    sale    of 

<  assaday  v.  Anderson,  53  Tex.  535;  another  creditor. 
Arbuckle  Bros.  Coffee  Co.  v.  Werner, 


§85         PRACTICE   IN    INDIANA,    NORTH    CAROLINA,    ETC.  \J\ 

a  creditor  without  a  lien  may  file  a  bill  in  chancery  to  dis- 
cover assets.1  The  method  of  procedure  indicated  seems 
to  be  an  innovation.  New  York,  the  birthplace  and 
stronghold  of  the  reformed  procedure,  clings,  in  the  main, 
tenaciously  to  the  old  practice  of  requiring  a  judgment 
and  execution  before  an  appeal  can  be  made  to  the  equity 
side  of  the  court.  Not  only  has  the  rule  been  rigidly 
enforced  in  that  State,,  but,  as  is  shown  elsewhere,  it  has 
been  in  some  respects  extended  and  strengthened.2  The 
rule  has  been  relaxed  in  other  States,  but  the  cases  which 
completely  subvert  or  overturn  it  are  comparatively  few 
The  old  method  of  procedure  did  not  result,  as  the  court 
supposed  in  Bank  v.  Harris,3  wholly  from  the  relation  of 
courts  of  law  to  courts  of  equity,  nor  is  the  necessity  for 
its  observance  abrogated  by  the  amalgamation  of  these 
jurisdictions.  If  the  creditor  is  to  be  allowed  to  prove  and 
recover  judgment  upon  his  simple  demand,  and  cancel 
fraudulent  conveyances,  or  reach  equitable  assets  in  the 
same  action,  it  would  seem  to  follow  that  the  usual  inci- 
dents of  a  creditor's  suit  would  attach  to  the  proceeding. 
The  creditor  in  an  action  for  assault  and  battery,  libel,  or 
slander,4  might  apply  for  an  injunction  against  the  debtor, 
or  for  a  receiver  of  his  property,  or  embarrass  him  by 
filing  a  lis  pendens.  The  time-honored  rule  that  the 
debtor's  management  and  control  of  his  property  should 
not  be  interfered  with  by  injunction  or  otherwise,  before 
judgment,  would  be  uprooted,5  and  an  unscrupulous 
creditor,  having  only  the  faintest  shadow  of  a  claim,  could 
work  out  the  debtor's  financial  destruction.  The  ancient 
practice  must  not  be   regarded  as   technical  or  artificial, 


1  Wooten  v.  Steele,  109  Ala.  565.  ne}'  v.  Davis,  148  N.  V.  356,    12  N     E. 

s  See  Estes  v.  Wilcox,  67  N.  Y.  264  ;  Rep.  661.     See  §§  79,  80. 

Burnett  v.  Gould,  27  Hun  (N.  Y.)  366  ;  3  84  N.  C.  210. 

Crippen   v.    Hudson,    13   N.   Y.    161  ;  4  See  §  90. 

Adee  v.  Bigler,  81  N.  Y.   349  ;  Whit-  5  See  §  52. 


172 


RETURN   OF   EXECUTION    UNSATISFIED. 


§86 


but  as  a  safeguard  to  the  debtor  dictated  alike  by  reason 
and  necessity.  If  the  practice  is  to  undergo  a  change,  as 
seems  likely  in  some  States,  then  the  joinder  should  be 
limited  to  cases  of  liquidated  demands  of  creditors,  certain 
in  their  character,  and  provisional  relief  should  be  with- 
held. The  union  of  remedies  is  calculated  to  crowd  into 
a  single  action  a  multitude  of  complicated  issues  concern- 
ing distinct  transactions,  as  to  the  debt  and  the  facts 
attending  the  alienation,  a  result  always  to  be  deprecated; 
and  would  necessitate  the  presence  of  the  alleged  fraud- 
ulent vendee  in  the  action.1 


§  86.  Return  of  execution  unsatisfied.— A  cloud  of  cases 
may  be  cited  to  the  general  effect  that,  to  reach  personal 
property  or  equitable  assets,  by  bill,  a  creditor  must  first 
secure  the  return  of  an  execution  unsatisfied 2  unless  it  can 
be  shown  that  the  property  is  not  susceptible  to  levy.3 
And  it  is  immaterial  that  the  return  of  the  execution  was 


lSee§  181. 

2  Morgan  v.  Bogue,  7  Neb.  429  ; 
Castle  v.  Bader,  23  Cal.  76  ;  Newman 
v.  Willetts,  52  111.  98  ;  Brown  v.  Bank 
of  Mississippi,  31  Miss.  454  ;  McElwain 
v.  Willis,  9  Wend.  (N.  Y.)  548; 
Hogan  v.  Burnett,  37  Miss.  617  ;  Yas- 
ser v.  Henderson,  40  Miss.  519  ;  Scott 
v.  Wallace,  4  J.  J.  Marsh.  (Ky.)  654  ; 
Roper  v.  McCook,  7  Ala.  318  ;  Baxter 
v.  Moses,  77  Me.  465;  Weigtman  v. 
Hatch,  17  111.  286  ;  Bigelow  v. 
Andress,  31  111.  334  ;  Beach  v.  Bestor, 
45  111.  346.  In  National  Tube  Works 
Co.  v.  Ballou,  146  U.  S.  523,  13  S.  C. 
Rep.  165,  Mr.  Justice  Blatchford 
said  :  "  Where  it  is  sought  by  equi- 
table process  to  reach  equitable  in- 
terests <il'  a  debtor,  the  bill,  unless 
otherwise  provided  by  statute,  causi 
set  forth  a  judgment  in  the  juris- 
diction where  the  suit  in  equity  is 
brought,  the  issuing  of  an  execution 
thereon,  ami  its  return  unsatisfied,  or 


must  make  allegations  showing  that 
it  is  impossible  to  obtain  such  a  judg- 
ment in  any  court  within  such  juris- 
diction." Citing  Taylor  v.  Bowker,  111 
U.  S.  110,  4  S.  C.  Rep.  397  :  Webster  v. 
Clark.  25  Me.  313 ;  Parish  v.  Lewis, 
Freeman's  Ch.  299  ;  Brinkerhoff  v. 
Brown,  4  Johns.  Ch.  (N.  Y.)  671  ;  Dun- 
levy  v.  Tallmadge,  32  N.  Y.  457; 
Terry  v.  Anderson,  95  U.  S.  628  ; 
Smith  v.  Railroad  Co.,  99  U.  S.  398; 
Hawkins  v.  Glenn,  131  U.  S.  334,  9 
S.  C.  Rep.  739 ;  McLure  v.  Benini,  2 
Ired.  Eq.  (N.  Car.)  513;  Famed  v. 
Harris,  19  Miss.  371  ;  Patterson  v. 
Lynde,  112  111.  196;  Swan  Land,  etc. 
Co.  v.  Frank,  148  U.  S.  612,  13  S.  C. 
Rep.  691.  In  Illinois  I  lie  judgment- 
creditor  need  nut  wait  for  the  return 
•  if  execution  unsatisfied.  I  Jill  man  v. 
Nadelhoffer,  162  111.  625,  45  N.  E. 
Rep.  680. 

3Snodgrass   v.    Andrews,   30   Miss. 
472. 


RETURN   OF   EXECUTION    UNSATTSI  III'. 


173 


made  at  the  request  of  the  plaintiff  and  within  sixty  days 
after  its  issuance.1  A  seeming  conflict  of  decisions,  more 
or  less  embarrassing,  must  be  noticed,  between  the 
Court  of  Appeals  of  New  York,  in  Thurber  v.  Blanck,-' 
and  the  Commission  of  Appeals  of  the  same  State,  in 
Mechanics'  and  Traders'  Bank  v.  Dakin.3      The  Commis- 


1  Forbes  v.  Waller,  25  N.  Y.  430. 

250N.  Y.  80. 

3  51  N.  Y.  519 ;  reargument  de- 
nied, 54  N.  Y.  681.  Compare  Mc- 
Elwaine  v.  Willis,  9  Wend.  (N.  Y.) 
561  ;  reviewed  in  Smith  v.  Weeks,  60 
Wis.  100.  See  the  reconciliation  of 
these  cases  stated  by  Maynard,  J. 
In  People  ex  rel.  Cauffman  v.  Van 
Buren,  136  N.  Y.  259,  32  N.  E. 
Rep.  775,  the  court  says:  "In 
Thurber  v.  Blanck  (50  N.  Y.  80), 
it  was  held  that  an  attaching  creditor 
had  no  standing  in  court  to  reach 
equitable  assets  until  his  remedy  at 
law  was  exhausted,  nor  to  attack  a 
fraudulent  transfer  of  the  property  of 
his  debtor  until  after  judgment ;  and 
in  the  Mechanics'  and  Traders'  Bank 
v.  Dakin  (51  N.  Y.  519),  the  Commis- 
sion of  Appeals  held  that  an  attaching 
creditor,  after  the  recovery  of  judg- 
ment and  the  issuing  of  execution 
may  maintain  an  equitable  action  in 
his  own  name  to  set  aside  a  fraudu- 
lent transfer  of  the  property  which 
had  been  seized  under  the  attachment. 
The  impression  seems  to  have  pre- 
vailed that  there  was  an  irreconcilable 
conflict  between  these  two  cases,  and 
the  reporter,  in  a  foot  note  in  the  51 
N.  Y.,  says:  'This case,  it  will  be  per- 
ceived, was  argued  prior  to  the  de- 
cision of  the  case  of  Thurber  v. 
Blanck  (50  N.  Y.  80).  with  which  it 
is  in  conflict.  That  case  had  not  been 
brought  to  the  attention  of  the  Com- 
mission at  the  time  of  the  decision 
herein.'  But  we  fail  to  discover  any 
real  ground  of  antagonism  between 


them.  In  Thurber  v.  Blanck  the 
court  was  dealing  with  an  attempl 
on  the  part  of  an  attaching  creditor  to 
reach  equitable  assets,  which  it  has 
been  uniformly  held  cannot  be  done 
until  judgment  has  been  recovered, 
execution  issued  and  returned  un- 
satisfied, and  an  action  or  proceeding 
in  the  nature  of  a  creditor's  bill  insti- 
tuted. The  provisions  of  the  Revised 
Statutes  (now  g§  1871-9  of  the  Code) 
which  authorized  a  judgment-cred- 
itor's action  imperatively  required  the 
recovery  of  a  judgment  and  the  issue 
and  return  of  an  execution  unsatisfied 
as  an  indispensable  condition  of  the 
creditor's  right  to  bring  the  action. 
In  Bank  v.  Dakin,  the  attaching 
creditor  had,  by  the  recovery  of  judg- 
ment and  the  issue  of  execution,  ac- 
quired the  right  to  have  the  attached 
property  applied  to  the  satisfaction  of 
the  execution,  but  in  the  assertion  of 
this  right  he  found  the  way  obstructed 
by  the  interposition  of  a  conveyance 
of  the  property  by  his  debtor,  which 
was  apparently  valid,  but  which  was, 
in  fact,  void.  In  such  cases  it  has 
always  been  held  thai  while  the  pro- 
cess for  the  collection  of  the  debl  was 
outstanding  the  equitable  jurisdiction 
of  the  court  could  be  invoked  to  re 
move  the  fraudulent  obstruction  to 
the  legal  process  and  permit  it  to  be 
effectually  enforced.  The  subsequent 
decisions  bearing  upon  the  question  in 
tins  court  have  all  been  in  line  with 
the  principles  enunciated  in  these  two 
typical  cases,  but  none  of  them  in- 
volved   the    point    here    presented    of 


174  RETURN    OF   EXECUTION   UNSATISFIED.  ■     §  86 

sion  held  that  when  a  suit  had  been  commenced  by  attach- 
ment, and  a  judgment  recovered,  the  plaintiff,  after 
issuance  of  execution,  and  before  its  return,  could  main- 
tain an  equitable  action  to  set  aside  a  fraudulent  assign- 
ment of  a  bond  and  mortgage,  to  the  end  that  it  might  be 
applied  toward  the  satisfaction  of  the  judgment ;  the  theory 
being,  that,  by  the  service  of  the  attachment,  a  lien  was 
acquired  upon  the  bond  and  mortgage,  which  could  be 
enforced  after  judgment,  and  to  which  the  fraudulent 
assignment  was  no  impediment.1  The  Court  of  Appeals 
held,  however,  that  an  equitable  action  could  not  be 
brought  in  a  somewhat  different  case  until  the  remedy  at 
law  was  first  exhausted ;  that  is,  until  the  execution  on 
the  judgment  had  been  returned  unsatisfied  ;  that  no  lien 
could  be  acquired  by  the  attachment  upon  a  bond  and 
mortgage,  the  legal  title  to  which  was  in  a  third  person  ; 
that  in  the  case  of  choses  in  action  and  debts,  the  lien  is 
constructive,  and  cannot  operate  through  an  intermediate 
or  inchoate  legal  title  ;  that  in  such  a  case  no  debt  at  law 
is  owing-  to  the  defendant,  and  there  is  nothing  for  the 
attachment  to  operate  upon,  since  it  can  only  act  upon 
legal  rights,  and  not  upon  mere  equitable  interests  ;  that 
debts  and  choses  in  action  are  legal  assets  under  the  attach- 
ment law  only  when  the  process  acts  directly  upon  the 
legal  title,  and  that  when  they  are  so  situated  as  to 
require  the  exercise  of  the  equitable  powers  of  the  court 


the  right  of  an  attaching  creditor  to  ment  had  not  issued."    Judge  Gray 

prevent    the    application   of    the  at-  also  says  in  Whitney  v.  Davis,  148  N. 

tached  property  to  the  payment  of  a  Y.  260,  42  N.  E.  Kep.  661,  that  Thur- 

prior  lieu.     It  must  he  apparent  that  ber  v.  Blanck,  50  N.  Y.  80,  and  Me- 

unless  such  a  right  exists  the  remedy  chanics'  and  T.  Bank   v.  Dakin,  51  N. 

by  attachment  will  be  lost  in  many  Y.  519,  "  were  not  in  conflict  with  each 

cases.      The    sheriff    must    sell    the  other, because  contemplating  different 

property  under  the  prior  executions  conditions  of  the  property  sought  to 

and  apply  the  proceeds  to  their  pay-  be  reached." 
ment,  and  the  plaintiff  would  be  in  'See  §81. 
no  better  condition  than  if  his  attach- 


§  86  RETURN    OF   EXECUTION    UNSATISFIED.  1 75 

to  place  them  in  that  condition  they  are  to  be  regarded 
as  equitable  assets  only,  and  that,  in  such  a  case,  to  allow 
the  equitable  action  upon  the  issuance  of  an  execution 
and  before  its  return,  would  be  in  direct  conflict  with  the 
rule  that  a  creditor  has  no  standing  in  court  to  reach 
equitable  assets  until  his  remedy  at  law  is  exhausted. 
The  decision  of  the  Commission  of  Appeals,  it  may  be 
observed,  was  unanimous,  while  that  of  the  Court  of 
Appeals  was  rendered  by  a  majority  of  the  court,  three 
judges  dissenting,  and  three  concurring  with  the  chief- 
justice.  The  Commission  of  Appeals  was  a  temporary 
court,  called  into  existence  to  relieve  the  overcrowded 
calendar  of  the  Court  of  Appeals.  Its  duration  as  a  court 
was  limited  and  it  has  ceased  to  exist.  The  Court  of 
Appeals  being  the  permanent  appellate  court  its' decision, 
if  there  be  a  real  conflict,  which  the  cases  attempt  to  deny, 
has  been  generally  followed,1  though  it  must  be  conceded 
that  the  relief  which  the  Commission  of  Appeals  attempted 
to  extend  would,  in  many  instances,  prove  highly  ser- 
viceable to  creditors.  The  decision  of  the  New  York 
Court  of  Appeals,  in  Thurber  v.  Blanck,a  is  not  to  be 
taken  as  being  in  conflict  with  the  class  of  cases  in  which 
it  has  been  held  that  an  equitable  action  may  be  brought 
after  the  issuance  of  an  execution,  and  before  its  return 
unsatisfied,  to  set  aside  a  fraudulent  transfer  of  goods 
and  chattels,  or  of  real  estate  which  can  be  levied  upon 
under  the  execution  when  the  fraudulent  impediment  is 
removed.3      A  rule  ought  to  be  deduced  from  the  authori- 


1  Gross  v.  Daly,  5  Daly  (N.  Y.)  54:!  ;  3  Gross  v.  Daly,  5  Daly  (N.  Y.  1  5 1 J  : 
Castle  v.  Lewis,  78  N.  Y.  137.  See  McElwain  v.  Willis,  9  Wend.  (N.  V .) 
Smith  v.  Longmire,  1  Am.  lnsolv.  R.  561  ;  Heye  v.  Bolles,  2  Dalj  (N.  Y.) 
426;  Anthony  v.  Wood,  96  N.  Y.  185,  231;  McCollough  v.  Colby,  5  Bosw 
citing  this  section.  (N.  Y.)  477  ;  North  America  Fire  I  us. 

2  50  N.  Y.  80.  See  People  <:r  rel  Co.  v.  Graham,  5  Sandf.  (N.  Y>  300  ; 
Cauffman  v.  Van  Buren,  136  N.  Y.  Falconer  v.  Freeman,  4  Sandf .  Ch.  (N. 
252,  32  N.  E.   Rep.  775.  Y.)  565;   Greenleaf  v.  Mumford,    30 


176 


REALTY   AND    PERSONALTY 


§87 


ties  that  no  return  of  an  execution  need  be  shown  where 
the  creditor  is  seeking  equitable  assets  solely. 

§  87.  Distinction  between  realty  and  personalty  as  to  issu- 
ance of  execution.  —  The  predicate  of  the  jurisdiction  as 
affecting  realty  is  that  the  creditor  has  a  lien,1  and  of 
course  if  the  lien  has  expired  the  creditor's  action  will  fail.2 
A  judgment  is  usually  a  lien  upon  real  property  by  statute, 
and  hence  authority  can  be  found  for  the  proposition 
that  a  covinous  conveyance  of  real  property  can  be 
attacked  by  a  judgment-creditor  without  the  issuance, 
levy,  or  return  of  an  execution.3  Jurisdiction  is  invoked 
in  such  cases  in  aid  of  the  remedy  at  law.  It  may  be 
observed  that,  as  a  creditor  must  usually  exhaust  the 
personal  property  of  the  judgment-debtor  before  having 
recourse  to  the  realty,  it  is  generally  essential  to  show,  in 
proceedings  to  reach  the  latter,  that  an  execution  has 
been  issued.4  There  is,  however,  an  absence  of  harmony 
in  the  authorities.     The  question   came  before  the   New 


How.  Pr.  (N.  Y.)  30.  See  Gibbons  v. 
Pemberton,  101  Mich.  397,  59  N.  W. 
Rep.  663.  Although  in  some  States 
the  distinction  between  suits  to  re- 
move obstructions  and  suits  to  reach 
equitable  assets  is  lost  sight  of,  and  it 
is  required  in  both  cases  that  execu- 
tion should  issue,  the  correct  rule  is 
thai  it  is  only  required  in  the  first 
class  of  cases.  Wisconsin  Granite 
Co.  v.  Gerrity,  144  111.  77,  33  N.  E.  Rep. 
31  ;  Fecheimer  v.  Hollander,  6  Mackey 
l  I ).  C.),  512. 

1  Partee  v.  Mathews,  53   Miss.  146  : 
Pulliam   v.  Taylor,  50  .Miss.  551-554  ; 
Carlisle  v.  Tindall,  49  Mis..  229-232. 
Evans  v.  Kill,  is   linn  (N.  Y.)  464. 

"Cornell  v.  Radway,  22  Wis.  260  ; 
Mohawk  Bank  v.  Atwater,  2  Paige 
(N.  Y.)  58  :  Clarkson  v.  De  Peyster,  3 
Paige  (N.  Y.)320;  Shaw  v.  Dwight, 


27  N.  Y.  249  (contra,  Adsit  v.  Butler, 
87  N.  Y.  5S7) ;  Brinkerhoff  v.  Brown, 
4  Johns.  Ch.  (N.  Y.)  671  ;  Royer 
Wheel  Co.  v.  Fielding,  61  How.  Pr. 
(N.  Y.)  437  ;  McCalmot  v.  Lawrence, 
1  Blatcli.  232  ;  Newman  v.  Willetts, 
52  111.  98;  Dillman  v.  Nadelhoffer, 
162  111.  625,  43  N.  E.  Rep.  378  ;  Vasser 
v.  Henderson,  40  Miss.  519;  Baldwin 
v.  Ryan,  3  T.  &  C.  (N.  Y.)  253  ;  Bin- 
nie  v.  Walker,  25  111.  App.  82  :  Mult- 
nomah Sheet  Ry.  Co.  v.  Harris,  13 
Ore.  198,  9  Pac.  Rep.  402;  Payne  v. 
Sheldon,  63  Barb.  (N.  Y.)  169;  Weigt- 
inan  v.  Batch,  17  III.  281  ;  Dargan  v. 
Waring,  11  Ala.  993.  See  Buswell 
v.  Lincks,  8  Daly  (N.  Y.)  518. 

1  North  Am.  Fire  Ins.  ( !o.  v.  Gra- 
ham, 5  Saudf.  (N.  Y.)  197  :  reviewed 
in  McCollough  v.  Colby,  5  Bosw.  (N. 
Y.)  477. 


87 


REALTY   AND    PERSONALTY. 


177 


York  Court  of  Appeals,1  and  the  result  of  the  decision  is 
briefly  to  the  effect  that,  in  an  action  to  set  aside  a  fraud- 
ulent conveyance  of  realty,  the  complaint  must  allege  the 
issuance  of  an  execution  and  its  return  unsatisfied,  or  the 
action  must  be  brought  in  aid  of  an  execution  then  out- 
standing. The  authorities  in  that  State,  on  the  general 
proposition  that  all  available  legal  remedies  must  be 
pursued  before  resort  to  equity,2  are  reviewed,  and 
Shaw  v.  Dwight3  distinguished.  This  decision  being  an 
important  utterance  of  the  court  of  last  resort,  it  follows 
that  in  New  York  State,  at  least,  execution  must  issue 
upon  a  judgment  before  a  creditor's  action,  or  a  suit  to 
annul  a  fraudulent  conveyance  of  realty  can  be  supported. 
This  places  real  property  and  equitable  interests  on 
substantially  the  same  basis,  as  regards  the  status  of  an 
attacking  creditor,  and  in  some  measure  restricts  his 
rights.4 


1  Adsit  v.  Butler,  87  N.  Y.  586.  See 
Spelman  v.  Freedman,  130  N.  Y.  425, 
29  N.  E.  Rep.  705  ;  Weaver  v.  Havi- 
land,  142  N.  Y.  537,  37  N.  E.  Rep. 
641  ;  Gardner  v.  Lansing,  28  Hun  (N. 
Y.)  415;  Importers'  &  Tr.  Nat.  Bank 
v.  Quackenbush,  143  N.  Y.  571,  38  N. 
E.  Rep.  728. 

2  Ocean  Nat.  Bank  v.  Olcott,  40  N. 
Y.  12  ;  Geery  v.  Geery,  63  N.  Y  252 ; 
Estes  v.  Wilcox,  67  N.  Y.  264  ;  Allyn 
v.  Thurston,  53  N.  Y.  622  ;  McCartney 
v.  Bostwiok.  32  N.  Y.  62;  Fox.  v. 
Moyer,  54  N.  Y.  125  ;  Crippen  v.  Hud- 
son, 13  N.  Y.  161. 

3  27  N.  Y.  244. 

4  See  Verner  v.  Downs,  13  S.  C. 
449  ;  Hyde  v.  Chapman,  33  Wis.  399  ; 
Dana  v.  Haskell,  41  Me.  25.  In  the 
Holladay  Case,  27  Fed.  Rep.  845,  the 
court  say  :  "  The  issue  of  an  execu- 
tion, and  the  return  of  nulla  bona 
thereon,  is  considered  sufficient  evi- 
dence of  the  insolvency  of  the  judg- 

12 


ment-debtor,  and  that  the  judgment- 
creditor  is  remediless  at  law.  But  it 
is  not  the  only  evidence  of  that  fact, 
nor,  in  my  judgment,  always  the 
best.  The  authorities  are  in  appar- 
ent conflict  on  this  question.  Wait 
Fraud.  Conv.  §  68;  Bump,  Fraud. 
Conv.  518,  527.  But  where  the  diver- 
sity is  not  the  result  of  local  legisla- 
tion, I  think  the  apparent  conflict 
arises  from  confounding  creditors' 
bills  to  subject  personal  propery  to  the 
satisfaction  of  a  judgment  with  an 
ordinary  bill  in  equity  to  set  aside  or 
postpone  a  conveyance  of  real  prop- 
erty on  which  the  plaintiff's  judgment 
is,  as  against  his  debtor,  a  lien  without 
an  execution.  In  the  latter  case  the 
right  to  maintain  the  suit  is  based  on 
the  unsatisfied  judgment,  the  fraudu- 
lent conveyance,  and  the  insolvency  of 
the  debtor  ;  which  latter  fact  may  be 
proved  by  any  competent  evidence,  as 
well  as  a  return  of  nulla  bona  <>n  an 


178  RAISING  THE   OBJECTION.  §  88 

To  obtain  an  equitable  lien  upon  property  not  the  sub- 
ject of  levy  and  sale  under  execution,  the  creditor  must,  of 
course,  have  exhausted  his  remedy  under  his  judgment  or 
decree  by  the  return  of  an  execution  unsatisfied.1  The 
return  of  the  execution,  even  as  to  personalty  capable  of 
being  subjected  to  a  lien,  is  not  always  essential.  In  Bus- 
well  v.  Lincks,'~  Chief-Justice  Daly  said  :  "The  equitable 
aid  of  the  court  to  set  aside  a  fraudulent  conveyance  is 
given  where  the  one  invoking  it  has  a  lien  upon  the  prop- 
erty which  is  obstructed  by  the  conveyance.  In  the  case 
of  personal  property,  a  judgment-creditor  acquires,  by  the 
issuing  of  an  execution,  a  lien  upon  the  personal  property 
of  the  debtor  as  against  a  fraudulent  conveyance,  and  the 
aid  of  the  court  is  given  in  that  case  to  remove  the 
obstruction  in  the  way  of  the  execution,  which  cannot  be 
done  if  the  execution  has  been  returned,  for  the  lein 
under  it  is  them  at  an  end."3 

§  88.  Raising  the  objection.— The  objection  that  the  cred- 
itor's remedy  is  at  law,  or  that  his  bill  is  without  equity,  or 
his  lien  is  suspended,  may  be  raised  at  the  hearing,4  though 
it  is,  of  course,  safer  to  bring  it  up  by  demurrer,  if  apparent 
on  the  face  of  the  pleading,  or  by  answer,  if  the  defect  is 
not  so  shown.     The  court  may  itself   raise  the  objection.5 


execution."    "Wisconsin  Granite  Com-  3  Citing  Forbes  v.    Logan,  4  Bosw. 

panyv.  Gerrity.  144  111.77,  33  N.  E.  (N.  Y.)  475;  Watrous  v.  Lathrop,  4 

Rep.  31.     As  to  proof  of  insolvency,  Sandf.  (N.  Y.)  700. 

see  Hodges  v.  Silver  Hill  Mining  Co.,  4  Meux   v.  Anthony,  11    Ark.  423; 

9  Ore.  200  ;  Terry  v.  Tubman,  92  U.  Tappan  v.  Evans,  11  N.  H.  311  ;  Brown 

S.    156;  Case  v.  Beauregard,   101  U.  v.  Bank  of  Mississippi,  31  Miss.  454. 

s.    688;    McCalmont  v.  Lawrence,  1  5  Oelrichs    v.  Spain,  15   Wall.  211. 

Blatchf.  232.  "  The  doctrine  of  these  and  similar 

1  Clarkson   v.    De  Peyster,  3    Paige  cases  is,  that   the  court,  for  its  own 

(N.  Y.)  320;  Shaw  v.  Dwight,  27  N.  protection,     may    prevent      matters 

Y. 249; Brinkerhoff  v.  Brown, 4 Johns,  purely  cognizable  at    law  from    be- 

Ch.  (N.   V.)  <;?<)•,    Adsil   v.  Butler,  87  ing   drawn     into  chancery,     at    the 

N.  Y.  587;  Fox  v.  Mover,  54  N.  Y.  128.  pleasure  of  the  parties  interested  ;  but 

•  8  Daly  (N.XY.)  518.  it  by  no  means  follows,  where  the  sub- 


§88  RAISING  THE   OBJECTION.  I  79 

In  concluding  this  chapter  we  may  state  that,  as  a  general 
rule,  under  both  the  old  Chancery  system  and  the  reformed 
procedure  in  New  York,  the  bill  should  generally  show 
affirmatively  that  an  honest  attempt  has  been  made  to  col- 
lect the  debt  by  the  issuing  of  an  execution  against  the 
debtor  and  its  return  unsatisfied,  and,  where  there  are  sev- 
eral defendants  jointly  liable,  that  such  effort  has  been  made 
and  the  remedy  exhausted  against  all  the  judgment- 
debtors  before  jurisdiction  will  be  entertained  in  chan- 
cery.1 Where  the  sole  purpose  of  the  bill  is  to  subject 
real  property  fraudulently  aliened  to  the  lien  of  a  judg- 
ment the  exaction  that  execution  should  have  been 
returned  is  not  uniformly  enforced. 


ject-matter  belongs  to  the  class  over  altogether  too  late  even    though,   if 

which  a  court  of  equity  has  juris-  taken   in  limine,  it  might  have  been 

diction,  and   the   objection   that   the  worthy    of    attention."       Reynes    v. 

complainant  has  an  adequate  remedy  Dumont,  130  U.  S.  354,  395,   9  S.  C. 

at  law  is  not  made  until  the  hearing  in  Rep.  486. 

the  appellate  tribunal,  that  the  latter  J  Voorhees  v.  Howard,  4  Keyes  (N. 

can  exercise  no  discretion  in  the  dis-  Y.)  383.     See  Child  v.  Brace,  4  Paige 

position  of  such  objection.    Under  the  (N.  Y.)  309  ;  Reed  v.  Wheaton,  7  Paige 

circumstances  of  ^this^case,  it  comes  (N.  Y.)  663.  . 


CHAPTER  V. 


EXISTING  CREDITORS. 


§89.  Classes    of    creditors  —  existing 
and  subsequent. 

90.  Contingent  creditors. 

91.  Who  are  not  creditors. 

92.  Transfer  of  right  to  sue. 


§93 


Voluntary  alienations  as  to  exist- 
ing creditors. 

94.  Such  conveyances  only  presump- 

tively fraudulent. 

95.  Evidence  of  solvency. 


"  The  complainant,  not  showing  that  he  was  at  the  time  a  creditor,  cannot  complain.  Even 
a  voluntary  conveyance  is  good  as  against  subsequent  creditors,  unless  executed  as  a  cover  for 
future  schemes  of  fraud."— Mr.  Justice  Field  in  Horbach  v.  Hill,  112  TJ.  S.  149. 

§89.  Classes  of  creditors  —  existing  and  subsequent.— As 
appertaining  to  the  subject-matter  of  this  treatise,  credit- 
ors may  be  said  to  resolve  themselves  into  two  great 
classes  or  subdivisions,  commonly  named  existing  credit- 
ors and  subsequent  creditors.  Existing  creditors  are 
those  whose  claims  or  demands  against  the  debtor  were 
in  being,  or  in  existence,  in  some  form  at  the  date  of  the 
alleged  voluntary1  or  fraudulent  alienation.2  Subse- 
quent creditors  are  those  to  whom  the  insolvent  became 
indebted  at  a  time  subsequent  to  the  alienation  which  is 


1  See  Thomson  v.  Crane,  73  Fed. 
Eep.  327;  Horbach  v.  Hill,  112  U.  S. 
144,  149,  5  S.  C.  Rep.  81  ;  Trezavent 
v.  Terrell,  96  Tenn.  528. 

2  See  Horbach  v.  Hill,  112  U.  S.  149, 
5  S.  C.  Rep.  81  ;  Schreyerv.  Scott,  134 
U.  S.  410, 10  S.  C.  Rep.  579.  A  person 
who  becomes  a  creditor  after  the  con- 
veyance, but  before  possession  under  it 
is  changed  or  notice  given,  is  an  exist- 
ing creditor.  Goll  &  F.  Co.  v.  Mil- 
ler, 87  la.  431,  54  N.  W.  Rep.  443; 
Fox  v.  Edwards,  38  la.  215.  Con- 
cerning what  evidence  will  be  held 
not    sufficient     to     show     that    the 


debt  was  in  existence  at  the  time 
of  the  conveyance,  see  Pidcock  v.Voor- 
hies,  84  la.  705,  42  N.  W.  Rep.  646,  49 
Id.  1038.  It  was  decided  in  Minnesota 
that  a  judgment-creditor  who  brings 
an  action  to  set  aside  a  conveyance 
made  prior  to  his  judgment  is  bound 
to  show  affirmatively  that  the  debt 
for  which  it  was  rendered  existed  at 
the  time  the  conveyance  was  made. 
Bloom  v.  Moy,  43  Minn.  397, 45  N.  W. 
Rep.  715.  As  to  a  debt  contracted 
partly  before  and  partly  after  the  con- 
veyance, see  Henderson  v.  Hender- 
son, 133  Pa.  St.  399,  19  Atl.  Rep.  424. 


§  go  CONTINGENT   CREDITORS.  l8l 

the  subject  of  inquiry.  The  rights  of  these  two  classes  of 
creditors  are  manifestly  and  necessarily  different ; x  the 
proofs  in  each  case  vary,  and  the  measure  of  relief 
extended  by  the  courts  in  particular  instances  is  largely 
dependent  upon  the  question  as  to  which  of  these  two 
classes  or  subdivisions  the  complaining  creditor  belongs. 
"The  difference,"  says  Chancellor  Williamson,  "between 
existing  and  subsequent  debts,  in  reference  to  voluntary 
conveyances,  is  this  —  as  to  the  former  the  fraud  is  an 
inference  of  law,  but  as  to  the  latter  there  must  be  fraud 
in  fact."2  This  latter  distinction,  as  we  shall  presently  see, 
is  not  universally  applied.  Manifestly  if  the  debtor  has 
made  any  secret  reservation  for  his  own  benefit  the  aliena- 
tion may  be  overturned  by  either  class  of  creditors.3 
A  party,  we  may  observe,  loses  no  rights  by  a  change  of  his 
securities,  and  the  holder  of  a  new  note  given  in  exchange 
for  an  old  one  may  attack  a  conveyance  which  is  fraudu- 
lent as  to  the  old  note.4 

§90.  Contingent  creditors.  —  In  a  multitude  of  cases  it 
has  been  repeatedly  adjudged  that  a  party  bound  by  a 
contract  upon  which  he  may  become  liable  for  the  pay- 
ment of  money,  although  his  liability  be  contingent,  is  a 
debtor  within  the.  meaning  of  the  statute  avoiding  all 
grants   made  to   hinder    or    delay   creditors.5     A   contin- 


1  See  Gordon  v.  Reynolds,  114  111.  Gardner  v.  Hiker,  25  la.  348  ;  Lowry 
123,  28  N.  E.  Rep.  455  ;  Jones  v.  King,  v.  Fisher,  2  Bush  (Ky.)  70  ;  Treza- 
86  111.  225  ;  Severs  v.  Dodson,  53  N.  J.  venfc  v.  Terrell,  96  Tenn.  530,  :j:5  S.  W. 
Eq.  633,  34  Atl.  Rep.  7.  Rep.  109  ;  Miller  v.  Hilton,  8S  .Mr.  429. 

2  Cook  v.  Johnson,  12  N.  J.  Eq.  54.  34  Atl.  Rep.  266. 

3  See  Gordon  v.  Reynolds,  114  111.  5  Young  v.  Heerrnans,  66  N.  Y.  384  ; 
133,  28  N.  E.  Rep.  455  ;  Neuberger  v.  Fearn  v.  Ward,  65  Ala.  33  ;  Van 
Keim,  134  N.  Y.  38,  31  N.  E.  Rep.  268;  Wyck  v.  Seward,  18  Wend.  (N.  Y.) 
Schreyerv.  Scott,  134  U.  S.  411,  10  S.  375,  383,  and  cases  cited;  Shontz  v. 
C.  Rep.  579;  Clement  v.  Cozart,  109  Brown,  27  Pa.  St.  123;  Bibb  v.  Free- 
N.  C   180,  13  S.  E.  Rep.  862.  man,  59  Ala.  612;  Cook   v.  Johnson, 

"Thomson  v.  Hester,   55  Miss.  656.  12  N.  J.  Eq.  52;  Hamet  v.  Dundass, 

See   Cansler   v.    Sallis,  54  Miss.  446 ;  4  Pa.  St.  178  ;  Jenkins  v.  Lockard,  66 


182 


CONTINGENT    CREDITORS. 


90 


uing  liability  to  pay  rent  under  a  lease  constitutes  the 
relationship  of  debtor  and  creditor.1  It  follows  that  the 
person  to  whom  the  debtor  is  bound  is  a  creditor.2  A 
wife  is  a  creditor  under  13  Eliz.  c.  5,  in  a  case  where  her 
husband  covenanted  with  trustees  to  pay  her  a  sum  of 
money  after  his  death.3  A  surety  is  a  creditor  from  the 
time  the  obligation  is  entered  into,4  or  the  bond  signed  ;5 
a  person  liable  contingently  as  an  accommodation  in- 
dorser  is  a  creditor  before  the  dishonor  of  the  note ; 8  and  a 
warrantor,  if  at  the  date  of  the  deed  a  paramount  title 
was  outstanding,  is,  from  the  time  of  the  conveyance,  a 
debtor  to  the  warrantee.7  A  remainderman  is  a  cred- 
itor against  whose  claim  a  voluntary  conveyance  made 
during  the  lifetime  of  the  life  tenant  will  be  set  aside.8 
A  municipal  corporation  is,  upon  the  issuance  to  the 
proper  officer  of  a  tax  warrant,  a  creditor  within  the 
statute.9      The  date  when  the  agreement   or    obligation 


Ala.  381  ;  Benson  v.  Benson,  70  Md. 
253  ;  Yardley  v.  Torr,  67  Fed.  Rep. 
857 ;  Petree  v.  Brotherton,  133  Ind. 
6!).").  32  N.  E.  Rep.  300. 

1  O'Brien  v.  Whigani,  9  App.  Div. 
(N.  Y.)  113. 

8  See  Jackson  v.  Seward,  5  Cow. 
(N.  Y.)  67;  Jackson  v.  Myers,  18 
Johns.  (N.  Y.)  425. 

a  Rider  v.  Kidder,  10  Ves.  360. 

4  Pennington  v.  Seel,  49  Miss.  525  ; 
Howell  v.  Thompson,  95  Tenn.  396, 
32  S.  W.  Rep.  309  ;  Matter  of  Rea,  82 
Iowa  231,  48  N.  W.  Rep.  78;  Reel  v. 
Livingston,  34  Fla.  377,  16  So.  Rep. 
284  ;  Humphrey  v.  Spencer,  36  W.  Va. 
11,  14  S.  E.  Rep.  410  ;  cf.  In  re  Reyn- 
olds, 20  Fed.  Cases,  615  ;  Barnes  v. 
Summons,  128  Ind.  596,  27  N.  E.  Rep. 
747.  So  held  in  the  case  of  a  surety 
on  a  guardian's  bond.  Benson  v. 
Benson,  70  Md.  253. 

'•  Yeend  v.  Weeks,  104  Ala.  330,  16 
So.  Rep.  165. 


6  Harnet  v.  Dundass,  4  Pa.  St.  178. 

1  Gannard  v.  Eslava,  20  Ala.  740 ; 
Pennington  v.  Seal,  49  Miss.  525.  It 
is  said  in  Severs  v.  Dodson,  53  N.  J. 
Eq.  637,  34  Atl.  Rep.  7,  that  none  of 
the  cases  decide  "that  a  contingent 
liability  will,  per  se,  raise  an  irrefu- 
table inference  of  fraud  so  as  to  in- 
validate a  conveyance  made  during 
the  continuance  of  such  a  condition 
of  affairs." 

8  Soden  v.  Soden,  34   N.  J.  Eq.  115. 

9  Stimson  v.  Wrigley,  86  N.  Y.  332. 
A  judgment  for  costs  accrues  at  the 
time  the  judgment  is  rendered,  and 
not  when  the  action  is  commenced, 
as  regards  the  question  of  whether 
the  claimant  is  an  existing  or  subse- 
quent creditor.  Inhabitants  of  Pel- 
ham  v.  Aldrich,  8  Cray  (Mass.)  515  ; 
Ogden  v.  Prentice,  33  Barb.  (N.  Y.) 
160;  Stevens  v.  Works,  81  Ind.  449. 


§  9° 


CONTINGENT   CREDITORS. 


I83 


came  into  existence  governs1  in  determining  the  com- 
plaining or  attacking  creditor's  rights.  As  elsewhere 
shown,  a  person  whose  claim  arises  from  a  tort,~  such  as 
libel  or  slander,3  is  a  creditor.  The  date  the  tort  or  in- 
jury was  committed  governs  in  determining  the  creditor's 
status,  where  the  conveyance  was  made  in  pursuance  of  a 
fraudulent  design  to  defeat  the  judgment  which  might 
be  recovered  upon  it.4  In  such  case  the  transfer  will  be 
set  aside,  if  actual  fraud  is  established.  It  is  not  enough 
that  the  conveyance  is  constructively  fraudulent.5  So  a 
transfer  to  defeat  a  claim  for  deceit,6  for  usury  penal- 
ties,7 breach  of  promise  to  marry,8  seduction,9  bastardy,10 
and  assault  and  battery,11  may  be  annulled.  And  a  wife  may 
attack  alienations  intended  to  defeat  claims  for  alimony.12 


1  Van  Wyck  v.  Seward,  18  Wend. 
(N.  Y.)  375 ;  Seward  v.  Jackson,  8 
Co  wen  (N.  Y.)  406.  See  Wooldridge 
v.  Gage,  68  111.  158  ;  Stone  v.  Myers, 
9  Minn.  309. 

2  Post  v.  Stiger,  29  N.  J.  Eq.  558  ; 
Scott  v.  Hartman,  26  N.  J.  Eq.  90  ; 
Pendleton  v.  Hughes,  65  Barb.  (N.  Y.) 
136;  Barling  v.  Bishopp,  29  Beav.  417; 
Shean  v.  Shay,  42  Ind.  375  ;  Bongard 
v.  Block,  81  111.  186  ;  Weir  v.  Day,  57 
Iowa  87;  Jackson  v.  Myers,  18  Johns. 
(N.  Y.)  425  ;  Shontz  \.  Brown,  27  Pa. 
St.  131  ;  Harris  v.  Harris,  23  Gratt. 
(Va.)  737  ;  Tobie  &  Clark  Mfg.  Co.  v. 
Waldron,  75  Me.  472  ;  Hepworth  v. 
Union  Ferry  Co.,  62  Hun  (N.  Y.)  257, 
16  N.  Y.  Supp.  692  ;  Boid  v.  Dean,  48 
N.  J.  Eq.  203,  21  Atl.  Rep.  618.     See 

1  §  123. 

3  Cooke  v.  Cooke,  43  Md.  522 ;  Hall 
v.  Sands,  52  Me.  355.  But  see  Fowler 
v.  Frisbie,  3  Conn.  320. 

4  Miller  v.  Dayton,  47  Iowa  312; 
Evans  v.  Lewis,  30  Ohio  St.  11  ;  Ford 
v.  Johnston,  7  Hun  (N.  Y.)  563  ;  Hep- 
worth  v.  Union  Ferry  Co.  ,62  Hun  (N. 
Y.)257,  16  N.  Y.  Supp.  692. 

6  Fuller  v.  Brown,  76  Hun  (N.  Y.) 
559,  28  N.  Y.  Supp.  189.     See  Sanders 


v.  Logue,  88  Tenn.  355,  12  S.  W.  Rep, 
722. 

6  Miner  v.  Warner,  2  Grant  (Pa.) 
448. 

I  Heath  v.  Page,  63  Pa.  St.  108. 

8  Hoffman  v.  Junk,  51  Wis.  613,  8 
N.  W.  Rep.  493  ;  Thompson  v.  Rob- 
inson, 89  Me.  56;  McVeigh  v.  Rite- 
nour,  40  Ohio  St.  107. 

9  Hunsinger  v.  Hofer,  110  Ind.  390, 
11  N.  E.  Rep.  463. 

10  Schuster  v.  Stout,  30  Kans.  530, 
2  Pac.  Rep.  642.  Leonard  v.  Bolton, 
153  Mass.  428,  26  N.  E.  Rep.  1118. 

II  Martin  v.  Walker,  12  Hun  (N.  Y.) 
46. 

12  Morrison  v.  Morrison,  49  N.  H.  69; 
Bouslough  v.  Bouslough,  68  Pa.  St. 
495;  Turner  v.  Turner,  44  Ala.  437; 
Dugan  v.  Trisler,  69  Ind.  553 ;  Bailey 
v.  Bailey,  61  Me.  361 ;  Livermore  \  . 
Boutelle,  11  Gray  (Mass.)  217;  ('has.' 
v.  Chase,  105  Mass.  385:  Hinds  v. 
Hinds,  80  Ala.  225,  227,  citing  this 
section;  Foster  v.  Foster,  56  Vt.  546; 
Stuart  v.  Stuart,  123  Mass.  370;  Bur- 
rows v.  Purple,  107  Mass.  435  :  Picket 
v.  Garrison,  76  Iowa  347,  II  X.  W. 
Rep.  38;  Boog  v.  Boog,  78  Iowa  534, 
43  N.  W.  Rep.  515. 


184  WHO    ARE    NOT   CREDITORS.  §91 

In  Pendleton  v.  Hughes,1  the  defendants,  at  the 
date  of  the  fraudulent  alienation,  had  in  their  possession 
a  5-20  U.  S.  bond  belonging  to  plaintiff  which  they  after- 
ward converted.  The  court  held  that  plaintiff  was  equi- 
tably entitled  to  protection  against  the  fraudulent  trans- 
fer to  the  same  extent  as  though  the  defendants  had  been 
indebted  to  her  in  that  amount  at  the  time  of  the  fraudu- 
lent alienation. 

§  91.  Who  are  not  creditors.  —  In  Baker  v.  Gilman,2  the 
court,  speaking  by  Johnson,  J.,  said  that  the  sole  object 
of  the  statute  "  in  declaring  conveyances  void,  is  to  pro- 
tect, and  prevent  the  defeat  of,  lawful  debts,  claims  or 
demands,  and  not  those  which  are  unlawful,  or  trumped 
up,  and  which  have  no  foundation  in  law  or  justice,  and 
the  verity  of  which  is  never  established  by  any  judgment 
or  by  the  assent  of  the  person  against  whom  they  are 
made.  As  against  claims  and  demands  of  the  latter  class, 
the  statute  does  not  forbid  conveyances  or  assignments, 
nor  declare  them  void."  So  a  party  who  is  not  a  bona 
fide  creditor  is  not  entitled  to  equitable  relief  on  a  cred- 
itor's bill.3  A  pretended  creditor  whose  claim  is  illegal,4 
or  void  as  against  public  policy,5  or  barred  by  statute  at 
law,8  or  who  is  not  concerned  in  the  transfer,7  or  is  estop- 
ped by  his  knowledge  and  acquiescence,8  cannot  support 


1  65  Barb.  (N.  Y.)  136.  8Scholey  v.  Worcester,  4  Hun   (N. 

-  52  Barb.  (N.  Y.)  37.  Y.)  302.     See  Olliver  v.  King,  8  De  G. 

3  Townsend  v.  Tuttle,  28  N.  J.  Eq.  M.  &  G.  110  ;  Phillips  v.  Wooster,  36 
449.     See  §73.  N.   Y.  412.     See    §    402.     Greene    v. 

4  Fuller   v.Brown,   30  N.  H.  861;  Sprague    Mfg.     Co.,  52    Conn.    330.' 
Alexander  v.  Gould,  1  Mass.  165.     See  In   Beaupie  v.    Noyes,  138  U.   S.  401, 
Walker  v.  Lovell,  28  N.  H.  138;  Tay-  the  court  says  :  "That  ground  is  thai 
lor  v.  Van  Deusen,  3  Gray    Mass.)  498.  there  was   evidence  tending  to  show 

I'.ruggerman  v.  Hocrr,  7   Minn,  that  t  lie  defendants  acquiesced  in  and 

337.  assented    to  all  that    was   done,  and 

•Edwardsv.    M'Gee,  31    Mi-s    143.  waived  any  irregularity  in  the  mode 

7  Morrison    v.  Atwell.  <j  Bosw.  (N.  in  which  the  assignee  conducted   the 

F.)508;   Powers  v.  Graydon,  10  Bosw.  business;    and     that    the     question 

(N.  Y.  j  630.  whether  the  defendants  so  acquiesced 


§§92,93  TRANSFER   OF    RIGHT   TO    SUE.  185 

a  creditor's  action.  A  court  of  equity  can  only  lend  its 
aid  to  enforce  a  judgment  which  could  be  enforced  at 
law,  and  the  creditor  must  have  clean  hands. 

§  92.  Transfer  of  right  to  sue.—  It  may  be  here  observed 
that  the  right  to  avoid  a  fraudulent  conveyance  is  not 
personal  to  the  then  existing  creditor ;  his  successors 
and  assigns  may  enforce  the  right.  Thus  the  subsequent 
purchaser  of  a  pre-existing  note  may  attack  a  transfer.1 
Campbell,  J.,  says  :2  "  No  change  in  the  ownership  or  the 
form  of  the  debt  affects  the  right  incident  to  the  debt 
to  attack  a  conveyance  fraudulent  as  to  it."  Davis,  J., 
observed  :  "  The  conveyance  was  void  as  against  the 
person  intended  to  be  defrauded,  and  his  heirs,  suc- 
cessors, executors,  administrators,  and  assigns,  if  their 
actions,  suits,  debts,  etc.,  were  liable  to  be  delayed  or 
hindered  thereby.3"  In  Massachusetts  it  has  been  held 
that  a  fraudulent  conveyance  may  be  avoided  by  an 
assignee  in  insolvency,  but  not  by  a  transferee  of  such 
assignee,  unless  the  assignee  has  first  distinctly  mani- 
fested his  election  to  avoid  the  transfer.4 

§  93-  Voluntary  alienations  as  to  existing  creditors. —  At 
first  blush  it  would  seem  apparent  that  every  voluntary 
alienation  of  a  debtor's  estate,  aside  from,  or  ignoring 
the  question  of  intent,  ought  to  be  avoided  as  to  existing 
creditors.     The  debtor's  property  is  sometimes  character- 


and  assented  with  knowledge  of  all  by   agreement  with  other  creditors, 

the  facts,  and  thereby  waived  their  designed  to  prevent  a  sacrifice  of  the 

right    to    treat     the    assignment    as  assigned  property,  by  a  disposal  of  it 

fraudulent,  was  properly  submitted  to  in  the  ordinary  way,  by  the  assignees." 

the  jury."     See  Eustis  v.  Bolles,  150  'Warren  v.  Williams,   52    Me.  349. 

U.  fl.  368  ;  Clay  v.  Smith,  3  Pet.  411.  2  Cook  v.  Ligon,  54  M  iss.  655. 

In  Rapalee  v.  Stewart,  27  N.  Y.  314,  3  Warren  v.    Williams,  52  Me.  849. 

the  court  says  :     "Here  is  not  only  a  4Morgan    v.  Abbott,  148  Mass.  507, 

waiver  of  any  right  to  attack  the  as-  20   N.  E.    Rep.  165.     Sec  Freeland  v. 

signment  for  fraud,  but  a  ratification  Freeland,    102    Mass.    475 ;    Tuite  v 

of  it,  by  coming  in  and  taking  action,  Stevens,  98  Mass.  305. 


1 86  VOLUNTARY   ALIENATIONS.  §  93 

ized  as  the  fund  or  evidence  of  means  or  stability  upon 
which  the  creditor  relied  in  extending  the  credit,  and  it  is 
urged  that,  after  the  creditor's  claim  accrued,  this  fund 
should  not  be  depleted  and  allowed  to  pass  into  the  hands 
of  persons  who  did  not  pay  value  for  it  to  the  detriment  of 
the  creditor  whose  claim  remains  unpaid.  Exactly  how 
to  accomplish  substantial  justice  in  such  cases  to  all 
parties,  and  yet  to  give  full  scope  and  effect  to  the  proper 
presumptions  and  rules  of  law  and  evidence  is  not  easily 
determined.  Shall  such  voluntary  conveyance  be  declared 
prima  facie  or  absolutely  void,  or  must  the  creditor 
assume  the  burden  of  showing  something  more  than  that 
the  conveyance  was  voluntary? 

Some  of  the  confusion  and  uncertainty  which  has  been 
introduced  into  this  subject  in  this  country  may  be  traced 
to  the  discussion  over  the  celebrated  decision  of  Chan- 
cellor Kent  in  the  widely  known  case  of  Reade  v.  Liv- 
ingston,1 in  which  it  was  held  that  a  voluntary  marriage 
settlement,  after  marriage,  was  of  itself  void  as  to  existing 
creditors.  This  case  has  been  declared  by  an  essayist2 
to  be  "  the  grandest  monument  of  legal  acumen  and  wide 
and  varied  erudition  which  New  York  has  ever  produced," 
and  while  it  is  conceded  that  the  case  was  repudiated  by 
the  courts  of  the  very  State  which  gave  it  birth,3  it  was 
asserted  that  "  unless  indications  are  wholly  delusive  the 
learned    Chancellor    was    not    more    than    a    century    in 


'3  Johns.  Ch.  (N. -Y.)  481,   8   Am.  where  shown,  the  question  of  fraud  is 

Dec.    520  ;  Lloyd  v.  Fulton,  91   U.   S.  made  one  of  fact,  and  no  conveyance 

479,  and   cases  cited.     See  Haston  v.  is  considered   fraudulent    as  against 

Castner,  31  X.  J.  Eq.  G97.  creditors  or  purchasers  solely  on  the 

-  Fraudulent   Conveyances  to  Bona  ground  that  it  was  not  founded  upon 

Fide  Purchasers,  etc.,  by  John  Key-  a  valuable  consideration.    See  Dygert 

uold-,  Esq.,  cited,  supra.  v.  Bemerschnider,  32  N.  Y.  636  ;  Kain 

3  Seward    v.  Jackson,  8  Cow.  (N.  Y.)  v.  Larkin,   131  N.    Y.   300,   30  N.   E. 

406.     By  statue  in  New  York,  as  else-  Rep.  105. 


§  93  VOLUNTARY    ALIENATIONS.  1 87 

advance  of  his  age."  '  The  English  Court  of  Chancery 
in  Freeman  v.  Pope,2  substantially  acknowledged  the 
doctrine  of  this  case  and  gave  the  following  emphatic  and 
extreme  illustration  :  If  at  the  time  of  a  voluntary  settle- 
ment, the  settler  had  ,£100,000,  and  put  £100  in  the  set- 
tlement, and  a  creditor  for  say  ^10,  happened  to  be 
unpaid  in  consequence  of  the  settler  losing  his  money  in 
the  interval,  that  would  be  quite  sufficient  to  set  aside  the 
voluntary  settlement;"  and  the  doctrine  of  the  case  is 
unreservedly  followed  in  many  American  cases.3  Salmon 
v.  Bennett,4  a  leading  early  case  created  an  exception  to 
the  rule  set  forth  in  Reade  v.  Livingston,  and  tends  to 
uphold  voluntary  conveyances  to  relatives  as  distin- 
guished from  strangers,  where  actual  fraud  is  not  found.5 
In  New  York  the  Revised  Statutes  expressly  declare  that 
no  conveyance  shall  be  held  fraudulent  solely  upon  the 
ground  that  it  was  not  founded  on  a  valuable  consider- 
ation. In  that  State  it  is  declared  that  the  burden  to 
prove  that  the  deed  left  the  grantor  insolvent  and  with- 
out property  to  pay  his  liabilities,  rests  upon  the  plain- 
tiff.6     In   England  it   is  provided  by  a  recent  statute,  56 


1  See  Doe  d.  Davis  v.  McKinney,  5      Emerson  v.  Bemis,  69  111.  540  ;  Annul 


Ala.  719  ;  Foote  v.  Cobb,  18  Ala.  585 
Gannard  v.  Eslava,  20  Ala.  732 
Spencer  v.  Godwin,  30  Ala.  355 
Crawford   v.  Kirksey,    55  Ala.   282 


v.  Annin,  24  N.  J.  Eq.  184;  Richard- 
son v.  Rhodus,  14  Rich.  Law  (S.  C.) 
96  ;  Clement  v.  Cozart,  109  N.  C.  1  73, 
13  S.  E.  Rep.  862  ;  Jackson  v.  Lewis, 


Early  v.  Owens,  68  Ala.  171  ;  Cook  v.  34  S.  C.  1,  12  S.  E.  Rep.  560  ;  Loehr  v. 

Johnson,    12    N.    J.    Eq.   51  ;    Smith  Murphy,  45  Mo.  App.  519 ;  Gardner  v. 

v.    Vreeland,    16  N.  J.  Eq.  198  ;  Kuhl  Kleihke,  46  N.  J.  Eq.  90,  18  Atl.  Rep. 

v.  Martin,  26  N.  J.  Eq.  60  ;  Haston  v.  457. 

Castner,  31   N.  J.  Eq.    697  ;  City  Na-  41  Conn.  525. 

tional  Bank  v.  Hamilton,  34  N.  J.  Eq.  5See§242.      Foster  v.    Foster,    56 

158  ;  Aber  v.  Brant,  36  N.  J.  Eq.  116  ;  Vt.  548  ;  Lloyd   v.   Fulton,    91    V.    S. 

Fellows  v.  Smith,  40  Mich.  689 ;  Mat-  479  ;  Babcock  v.  Eckler,  24  N.  Y.  623  ; 

son  v.  Melchor,  42  Mich.  477.  Gale  v.  Williamson,  8  M.  &  W.  405. 

2L.  R.  9Eq.  at  p.  211.  6  Kain   v.  Larkin,  131    N.  Y.  300,  30 

3  See  Crawford  v.  Kirksey,  55  Ala.  N.  E.  Rep.    105  ;  cf .  Fuller  v.  Brown, 

282  ;  Spencer  v.  Godwin,  30  Ala.  355  ;  76  Hun  (N.  Y.)  557,  28  N.  Y.    Supp. 

Hanson  v.  Buckner,  4  Dana  (Ky.)251  ;  189. 


1 88  CONVEYANCES    PRESUMPTIVELY   FRAUDULENT.  §94 

and  57  Vict.  ch.  21,  that  a  voluntary  conveyance,  if  made  in 
good  faith,  shall  not  be  avoided  under  the  statute  of 
Elizabeth.  Thus  do  the  principles  of  Twyne's  case,1  van- 
ish from  view.  The  burden  imposed  upon  the  creditor  of 
being  forced  to  show  facts  tending  to  establish  fraud  in 
addition,  so  to  speak,  to  proof  that  the  conveyance  was 
voluntary,  certainly  creates  a  feeling  of  unrest  in  the 
courts,  and  in  Smith  v.  Reid2  the  opinion  sets  forth  the 
familiar  rule  that  a  voluntary  conveyance  by  one  indebted 
is  presumptively  fraudulent,  while  in  the  dissenting  opin- 
ion, Kain  v.  Larkin,8  is  referred  to  as  establishing  that 
mere  proof  of  the  voluntary  character  of  the  conveyance 
will  not  make  out  the  creditor's  case. 

§  94.  Such  conveyances  only  presumptively  fraudulent.  — 
If  the  majority  rule  is  to  be  applied  in  determining  this 
conflict,  or  the  cases  are  to  be  counted  and  not  weighed, 
then  it  must  be  conceded  that  a  voluntary  alienation  by  a 
person  who  happens  to  be  indebted  at  the  time,  is  only 
prima  facie  fraudulent.4  In  Smith  v.  Vodges,5  Swayne,  J., 
said  :  "  In  order  to  defeat  a  settlement  made  by  a  hus- 
band upon  his  wife,  it  must  be  intended  to  defraud  existing 
creditors,  or  creditors  whose  rights  are  expected  shortly 


1  See  §  22.  Warner  v.  Dove,  83  Md.  579  ;  Babcock 

2  134  N.  Y.  575,  31    N.  E.  Rep.  1082.  v.  Eckler,  24  N.  Y.    623  ;  Greenfield's 

3  131    N.  Y.  300,  30  N.  E.  Rep.  105.  Estate,  14  Pa.  St.  489  ;  Clark  v.   De- 
1  See  note  to  Jenkins  v.  Clement,  14  pew,   25    Pa.    St.   509;    Pomeroy  v 

Am     Dec    705  :  1  'once   v.   Croan,    51  Bailey,  43  N.  H.  118  ;  Dewey  v.  Long, 

In<l.  336  :  Gwyer  v.  Figgins,  37  Iowa  25  Yt.  564  ;  Lloyd  v.  Fulton,  91  U.  S. 

517;  Wilson   v.    Kohlheiru,   40   Miss.  485;  Hoarie    v.    Price,    31    Wis.    82; 

346;  Bank   of  U.S.    v.   Housman,   6  Blake  v,  Boisjoli,  51  Minn.  296,  53  N. 

Paige  (N.  Y.)  526;  Eolden   v.    Burn-  W.  Rep.   037;    Emerson  v.  Opp.    139 

ham,    63    X.    Y.    71  ;    Eigleberger  v.  Ind.  27,    38    N.    E.    Rep.    330.     The 

Kibler,  1  Hill's  Ch.    (S.   C.)    113,   26  voluntary  donee  " is  entitled  only  to 

Am.    Dec.   192:  Heiatt    v.   Barnes,    5  that  which    his  donor  could   honestly 

Itana  (Ky.)220;  Koater   v.    Hiller,  4  give."    Adams'  Equity,  p.   149.    See 

Bradw.  (111.)  21  ;  Fellows   v.    Smith,  Green  v.  Givan,  33  N.  Y.  343. 
10  Mich.  691  ;  Grant  v.  Ward.  G4  Me.         592  U.  S.  183;  Schreyer  v.   Scott, 

239  ;  French  v.  Holmes,  07    Me.    190  ;  134  U.  S.  411,  10  S.  C.  Rep.  579. 


§95  EVIDENCE    OF  SOLVENCY.  1 89 

to  supervene,  or  creditors  whose  rights  may  and  do  so  super- 
vene ;  the  settler  purposing  to  throw  the  hazards  of  busi- 
ness in  which  he  is  about  to  engage  upon  others,  instead 
of  honestly  holding  his  means  subject  to  the  chance  of 
those  adverse  results  to  which  all  business  enterprises  are 
liable."1  "  The  sentiment  of  these  cases,"  says  Mr.  Free- 
man,2 is  well  expressed  in  Lerow  v.  Wilmarth,3  by  Chief- 
Justice  Bigelow  :  'We  do  not  wish  to  be  understood  as 
giving  our  sanction  to  the  doctrine  that  a  voluntary  con- 
veyance by  a  father  for  the  benefit  of  his  child  is  per  se 
fraudulent  as  to  existing  creditors,  although  shown  not  to 
have  been  fraudulent  in  fact,  and  is  liable  to  be  set  aside, 
because  the  law  conclusively  presumes  it  to  have  been 
fraudulent,  and  shuts  out  all  evidence  to  repel  such  pre- 
sumption. The  better  doctrine  seems  to  us  to  be  that 
there  is,  as  applicable  to  voluntary  conveyances  made  on 
a  meritorious  consideration,  as  of  blood  and  affection,  no 
absolute  presumption  of  fraud  which  entirely  disregards 
the  intent  and  purpose  of  the  conveyance,  if  the  grantor 
happened  to  be  indebted  at  the  time  it  was  made,  but 
that  such  a  conveyance  under  such  circumstances  affords 
only  prima  facie  or  presumptive  evidence  of  fraud  which 
may  be  rebutted  and  controlled.'  "  4 

§95.  Evidence  of  solvency.— The  Supreme  Court  of 
Maine  regard  it  as  established  law  that  mere  indebted- 
ness is  not  sufficient  to  render  a  voluntary  conveyance 
void.       Consequently    it  was    said    that  a   man,    though 


'Citing    Sexton     v.     Wheaton,    8  11  Wheat.  199 ;  Verplani    v.   Sterry, 

Wheat.  229  :  Mullen  v.  Wilson,  44  Pa.  12  Johns.  (N.  Y.)  536,  559  .  Seward  v. 

St.  413  ;  Stileman  v.  Ashdown,  2  Atk.  Jackson,  8  Cow.  (N.  Y.)  40f>  ;   I  >unlap 

481.  v.  Hawkins,  59  N.  Y.  846  ;  Walter  v. 

2  See   note  to  Jenkins  v.    Clement,  Lane,  1  MaeAr.  (D.  C.)  284  ;  Parish  v. 

14  Am.  Dec.  705.  Murphree,    13    How.    92;    Moritz    \. 

39  Allen  (Mass.)  386.  Hoffman,  35  111.  553;  Koster   v.    Bil- 

4 See  Hinde's  Lessee  v.  Longworth,  ler.  4  111.  App.  24. 


193  EVIDENCE  OF  SOLVENCY.  §  95 

indebted,  may  make  a  valid  gift.1  Mere  insolvency  will 
not,  of  course,  render  a  deed  fraudulent  provided  it  was 
made  with  the  sole  view  of  paying  a  debt  due  to  the 
grantee.2  As  a  general  rule  if  the  donor  is  solvent,  and 
has,  after  making  the  gift,  sufficient  assets  remaining  to 
satisfy  his  creditors,  the  gift  will  be  upheld.3  Subsequent 
insolvency  will  not  generally  render  it  invalid.4  In  such 
cases  the  creditors'  trust  fund,  so  called,  cannot  be  said 
to  have  been  depleted  by  the  alienation.  If  their  claims 
remain  unsatisfied  it  is  due  to  some  subsequently  accruing 
cause.  Judge  Lowell,  in  Pratt  v.  Curtis,5  derives  the 
following  propositions  from  the  cases:  "(i).  A  volun- 
tary conveyance  to  a  wife  or  child  is  not  fraudulent  per  se  ; 
but  it  is  a  question  of  fact  in  each  case  whether  a  fraud 
was  intended.  (2).  Such  a  deed,  made  by  one  who  is 
considerably  indebted,  is  prima  facie  fraudulent,  and  the 
burden  is  on  him  to  explain  it.  (3).  This  he  may  do  by 
showing  that  his  intentions  were  innocent,  and  that  he 
had  abundant  means,  besides  the  property  conveyed,  to 
pay  all  his  debts."  6  The  rule  may  be  summed  up  to  the 
effect  that  the  gift,  conveyance,  or  settlement  will  be 
upheld  u  if  it  be  reasonable,    not   disproportionate  to  the 


1  French    v.    Holmes,   67  Me.    198 ;  Rose  v.  Colter,  76  Ind.   590  ;  Evans  v. 

Stevens    v.    Robinson,    72    Me.    381  ;  Hamilton,    56   Ind.   34 ;    Sherman  v. 

Langhton  v.  Harden,  68  Me.  212.    See  Hogland,    54     Ind.    578 ;     Pence     v. 

McFadden  v.    Mitchell,    54  Cal.  628  ;  Croan,  51  Ind.  336. 

Patterson   v.    McKinney,    97  111.  47  ;  6  2  Lowell  90. 

Hinde's    Lessee    v.    Longworth,      11  6See  also  note  to  Jenkins  v.  Cle- 

Wheat.   213  ;  Merrell   v.   Johnson,  96  ment,  14  Am.   Dec.   707  ;  Herring  v. 

111.  230.  Richards,  1  McCrary  574.     The  ques- 

1  Fuller  v.   Brewster,    53   Md.   362.  tion   whether  the    funds     left  were 

See  Copis  v.  Middleton   2  Madd.  410;  ample  to  pay  existing  indebtedness  is 

Phettiplace  v.  Sayles,    I  Mason   312;  for  the. jury.     Clement  v.  Cozart,  112 

Eardey  v.  Green,   12  Beav.    182  ;  At-  N.  C.  412,  17  S.  E.  Rep.  486,  and  the 

wood  v.  Impson,  20  N.  J.  Eq.  150.  proof  to  rebut  the  presumed  fraudu- 

3  Stewart  v.  Rogers,  25  Iowa,  395  ;  lent  intent  must  be  clear  and  satis- 
(iridley  v.  Watson,  53  111.  193;  Win-  factory.  Snyder  v.  Free,  114  Mo. 
Chester  v.  Charter,  97  Mass.  140.  360;  21  S.  W.  Rep.  847. 

4  Dunn  v.  Dunn,  82  Ind.   43.     See 


§95  EVIDENCE   OF   SOLVENCY.  [9] 

husband's  means,  taking  into  view  his  debts  and  situation, 
and  clear  of  any  intent,  actual  or  constructive,  to  defraud 
creditors."1  Dunlap  v.  Hawkins2  embodies  an  important 
statement  of  the  law  upon  this  subject.  The  principle  is 
asserted  that  a  creditor  cannot  impeach  a  conveyance 
founded  on  natural  love  and  affection,  free  from  the  impu- 
tation of  fraud,  when  the  grantor  had,  independent  of  the 
property  granted,  an  ample  fund  'to  satisfy  his  creditors.3 
Allen,  J.,  in  the  course  of  the  opinion,  said  :  "  By  proving 
the  pecuniary  circumstances  and  condition  of  the  grantor, 
or  him  who  pays  for  and  procures  a  grant  from  others,  his 
business  and  its  risks  and  contingencies,  his  liabilities  and 
obligations,  absolute  and  contingent,  and  his  resources 
and  means  of  meeting  and  solving  his  obligations,  and 
showing  that  he  was  neither  insolvent  nor  contemplating 
insolvency,  and  that  an  inability  to  meet  his  obligations 
was  not  and  could  not  reasonably  be  supposed  to  have 
been  in  the  mind  of  the  party,  is  the  only  way  by  which 
the  presumption  of  fraud,  arising  from  the  fact  that  the 
conveyance  is  without  a  valuable  consideration,  can  be 
repelled  and  overcome,  except  as  the  party  making  or 
procuring  the  grant  may,  if  alive,  testify  to  the  absence 
of  all  intent  to  hinder,  delay,  or  defraud  creditors."  And 
in  Parish  v.  Murphree,4  the  court  observed  :  "  To  hold 
that  a  settlement  of  a  small  amount,  by  an  individual  in 
independent  circumstances,  and  which,  if  known  to  the 
public,  would  not  affect  his  credit,  is  fraudulent,  would  be 
a  perversion  of  the  statute."     In  Carpenter  v.   Roe,5  the 


•See   Herring  v.    Richards,    1    Mc-  Paige  (N.  Y.)  526  ;  Fox  v .   Moyer,  54 

Crary,  574.  N.  Y.  125  ;  Van  Wyck  v.   Seward,   6 

2 59  N.  Y.  346;  Carr  v.   Breese,  81  Paige  (N.  Y.)  62;  Jackson  v.  Miner, 

N.  Y.  588;    Jencks   v.   Alexander.il  101   111.554:   Rogers  v.  Yerlander,  30 

Paige  (N.  Y.)  619.  W.  Va.  619,  5  S.  E.  Rep.  817. 

3  See  Jackson  v.  Post,  15  Wend.  (N.  4  13  How.  98. 

Y.)  588  ;  Phillips  v.  Wooster,  36  N.  Y.  6  10  N.  Y.  227. 
412  ;  Bank  of  U.  S.  v.  Housman,  6 


I92  EVIDENCE   OF   SOLVENCY.  §  95 

New  York  Court  of  Appeals  held  that,  to  invalidate  a 
voluntary  conveyance,  belief  by  the  debtor  as  to  his 
insolvency  was  not  absolutely  necessary;  it  was  sufficient 
if  his  solvency  was  contingent  upon  the  stability  of  the 
market  in  the  business  in  which  he  was  engaged.  In 
other  words,  a  debtor  has  not  the  right  to  make  voluntary 
alienations  so  as  to  leave  himself  in  a  condition  in  which 
he  hazards  the  rights  of  creditors  on  the  contingency  of  a 
fluctuating  market.  In  Cole  v.  Tyler,1  the  court  say  : 
"  It  was  at  one  time  the  rule  that  a  voluntary  conveyance 
by  one  indebted  at  the  time  was  fraudulent,  as  a  matter 
of  law,  towards  his  creditors.  No  evidence  was  allowed 
to  rebut  the  presumption  of  fraud.2  This  rule  was  sub- 
sequently deemed  to  be  too  severe  by  the  courts,  and  the 
less  stringent  rule  was  adopted  that,  while  a  conveyance 
by  a  person  indebted  was  presumptively  or  prima  facie 
fraudulent,  the  presumption  might  be  rebutted  by  proof 
to  the  contrary.3  This  presumption,  however,  is  not  to 
be  overthrown  by  mere  evidence  of  good  intent,  or  gen- 
erous impulses  or  feelings.  It  must  be  overcome  by 
circumstances  showing  on  their  face  that  there  could  have 
been  no  bad  intent,  such  as  that  the  gift  was  a  reasonable 
provision,  and  that  the  debtor  still  retained  sufficient 
means  to  pay  his  debts.  He  can  no  more  delay  his 
creditors  by  such  voluntary  conveyance  than  he  can 
actually  defraud  them."4  The  statutory  rule  in  New 
York  that  lack  of  consideration  alone  will  not  suffice  to 
overturn  a  conveyance,  and  that  other  facts  must  be 
shown,  is  not  to  be  overlooked.5 


1  65  N.  Y.  78.  Babcock  v.  Eckler,  24  N.  Y.  623  ;  Dy- 

2  Reade   v.  Livingston,  3  Johns.  Oh.  gert  v.  Remerschnider,  32  N.  Y.  648  ; 
(N.  Y.)  481.     See  Kain  v.  Larkin,  131  Curtis  v.  Fox,  47  N.  Y.  300. 

N.  Y.  300,   30  N.  E.   Rep.  105.       See  5  Kain   v.  Larkin,  131  N.  Y.  300,  30 

nls..  §  93.  N.  E.  Rep.  105  ;  Smith  v.  Reid,  134  N. 

3  Seward  v.  Jackson,  8  Cow.  406.  Y.  581,  31  N.  E.  Rep.  1082. 

4  Carpenter  v.  Roe,  10  N.    Y.  230 ; 


CHAPTER  VI. 


SUBSEQUENT  CREDITORS. 


§  96.  )  Fraud  upon    subsequent    cred- 

97.  f      itors. 

98.  Proof  of  intent. 

99.  Conveyance      by      embarrassed 

debtor. 

100.  Placing  property  beyond  the  risk 

of    new    ventures    or  specula- 
tions. 

101.  Convevances  avoided. 


§  102 


Conveyances      not      considered 
fraudulent. 

103.  Subrogation  of  subsequent  cred- 

itors. 

104.  Subsequent    creditors    sharing 

with  antecedent  creditors. 

105.  Mixed  claims  accruing  prior  and 

subsequent  to  alienation. 

106.  Creditors  whose  claims  accrued 

after  notice  of  alienation. 


§  96.  Fraud  upon  subsequent  creditors. —  The  great  prac- 
tical distinction  between  existing  or  antecedent  creditors 
and  subsequent  creditors  in  most  of  the  States  is,  that  a 
voluntary  alienation  is  usually  considered,  as  to  the  former, 
presumptively  fraudulent,  while  as  to  the  latter  the  burden 
of  proving  an  intention  to  commit  a  fraud,  or  the  existence 
of  a  secret  trust  or  reservation,  rests  upon  the  creditor. 
Generally  speaking,  subsequent  creditors  must  elicit  facts 
showing  contemplation  of  future  indebtedness  by  the 
insolvent,1  or  future  schemes  of  fraud.2    Voluntary  deeds, 


1  See  Todd  v.  Nelson,  109  N.  Y.  327, 
16  N  E.  Rep.  360  ;  Teed  v.  Valentine, 
65  N.  Y.  474  ;  Savage  v.  Murphy,  34 
N.  Y.  508;  McClaugherty  v.  Morgan, 
36  W.  Va.  191,  14  S.  E.  Rep.  992; 
Thompson  v.  Crane,  73  Fed.  Rep.  327: 
Horbach  v.  Hill,  112  IT.  S.  114,  5  S. 
C.  Rep.  81  ;  Schreyer  v.  Scott,  134  U. 
S.  405  ;  10  S.  C.  Rep.  579  :  Neuburger 
v  Keim.  134  N.  Y.  38,  31  N.  E.  Rep. 
268;  Petree  v.  Brotherton,  133  Ind. 
692,  32  N.  E.  Rep.  300:  Buckley  v. 
Duff,  114  Pa.  St.  59),  8  Atl.  Rep.  188  ; 
Eames  v.  Dorsett,  147  111.  540,  35  N.  E. 

13 


Rep.  735  ;  Hagerman  v.  Buchanan, 
45  N.  J.  Eq.  292,  17  Atl.  Rep.  946  ; 
Craft  v.  Wilcox,  102  Ala.  378,  II  So. 
Ken.  658;  Ditman  v.  Raule,  124  Pa. 
St.  225,  16  Atl.  Rep.  819  :  Bluthenthal 
v.  Magnus,  97  Ala.  530,  13  So.  Rep.  7  ; 
Marshall  v.  Roll,  139  Pa.  St.  399,  20 
Atl.  Rep.  999. 

2Horbach  v.  Hill.  112  U.  S.  111.  1  1!». 
5  S.  C.  Rep.  81  :  Schreyer  v.  Scott,  134 
U.  S.  411.  10  S.  C.  Rep.  •">:'.»:  Bilton  v. 
Morse,  75  Me.  258;  Neuberger  v. 
Keim,  134  N.  Y.  35,  31  N.  E.  Rep.  268  ; 
Burton  v.  Platter,  53  Fed.  Rep.  901. 


194 


FRAUD    UPON    SUBSEQUENT   CREDITORS. 


§96 


it  should  be  remembered,  are  ordinarily  invalid  or  liable 
to  attack  only  at  the  suit  of  antecedent  creditors,1  and  the 
absence  of  evidence  showing  fraud  in  the  transaction  will 
usually  defeat  the  actions  of  subsequent  creditors.-  As 
we  shall  presently  see  there  is  not  the  same  presumption 
to  aid  the  latter  class.3  A  specific  intent  to  defraud  subse- 
quent creditors  will  manifestly  avoid  the  transfer  as  to 
them.4  In  the  absence  of  proof  of  such  an  intent  the 
transaction  will  stand.5  Chancellor  Kent,  in  his  cele- 
brated judgment  pronounced  in  Reade  v.  Livingston,6  a 
case  already  noticed,  said  :  "  The  cases  seem  to  agree  that 
the  subsequent  creditors  are  let  in  only  in  particular  cases  ; 
as  where  the  settlement  was  made  in  contemplation  of 
future  debts,  or  where  it  is  requisite  to  interfere  and  set 
aside  the  settlement  in  favor  of  the  prior  creditor."  ' 
Judge  Story  observed:  "Where  the  settlement  is  set 
aside  as  an  intentional  fraud  upon  creditors,  there  is  strong 
reason  for  holding  it  so  as  to  subsequent  creditors,  and  to 


1  Uncle's  Lessee  v.  Lonywortli,  11 
Wheat.  211;  Sexton  v.  Wheaton,  8 
Wheat.  229,  252,  1  Am.  Lea.  Cas.  17; 
Loeschigk  v.  Addison.  4  Abb.  X.  S. 
(N.Y.)210,  affi'd51  X.Y.  000;  Metropo- 
lite  Bank  v.  Rogers,  47  Fed.  Rep. 
lis.     See  §  s(),  and  Chap.  V. 

Ford  1  .  Johnston,  7  Hun  (N.  V.  I 
568;  Dygert  v.  Remerschnider,  82  X. 
Y.  010;  Cole  v.  Varner,  31  Ala.  ','44  ; 
Jackson  v.  Plyler,  38  S.  C.  196,  17  s. 
E.    Rep.  255. 

Herring  v.  Richards,  1  McCrary, 
:.71  :  Barrett  v.  Nealon,  110  Pa.  St. 
177,  12  Atl.  Rep.  861.  In  Jones  v. 
Light,  si;  Me.  442,  30  Atl.  Rep.  71,  the 
court  says  :  "If  the  transaction  is 
actually  fraudulent  againsl  any 
creditor,  any  and  all  creditors  may 
impeach  and  resist  it.  ami  are  entitled 

to  the  aid  of  the  law  in  appropriating 
the  property ,   fraudulently  com  eyed, 

1..  the  paymenl  of  1  heir  debts.      The 


uniform  construction  of  that  statute 
includes  subsequent  as  well  as  exist- 
ing creditors."  See  Wit/,  v.  Osburn, 
83  Va.  229.  'J  S.  E.  Rep.  33;  Link  v. 
Denny,  75  Va.  00:5. 

4McPherson  v.  Kingsbaker,22Kan. 
646;  United  state- v.  Stiner,  8  Blatchf. 
544;  Candee  v.  Lord.  2  N.  Y.  'J7.j  ; 
Anon.  1  Wall.  Jr.  lb: ;  Horn  v.  1: 
•jo  Ga.  223  ;  Black  v.  Nease,  37  l'a.  St. 
433  :  Johnston  v.  Zane.  11  Gratt.  (Va.) 
552  :  Day  v.  Cooley,  IIs  Mass.  524  ; 
Plimpton  v.  Goodell,  1 13  Mass.  365, 
0  N.  E.  Rep.  791  ;  Leonard  v.  Bolton, 
i:.3  Mass.  431.  26  N.  E.  Rep.  His. 

Teed  v.  Valentine,  65  N.  Y.  474, 
and  cases  cited  ;  Bouquet  v.  Heyman, 
50  N.  .1.  Eq.  114,  '21  Atl.  Rep.  266. 

•■:;  Johns.   Ch.    (N.    Y.)    10;.    See 

Chap.   V. 

:  See  Walter  v.  Lane,  1    MacAr.  (D. 
■       27o. 


§  96  FRAUD    UPON    SUBSEQUEN1    CREDITORS.  [95 

let  them  into  the  full  benefit  of  the  property."1  In 
Savage  v.  Murphy,2  it  appeared  that  the  judgment-debtor 
was  engaged  in  an  extensive  business  on  credit,  in  which 
he  was  considerably  indebted,  and  that  he  stripped  himself 
of  the  title  to  all  his  property  by  transfer  to  his  wife  and 
children  for  a  merely  nominal  pecuniary  consideration, 
without  any  visible  change  of  possession,  and  with  the 
intent  to  contract  and  continue  a  future  indebtedness  in 
his  business  on  the  credit  of  his  apparent  ownership  of  the 
property  transferred,  and  to  avoid  payment  of  his  debts. 
After  the  transfer  he  continued  in  business,  making  new 
purchases  on  credit,  and  using  part  of  the  avails  of  each 
successive  purchase  to  pay  the  indebtedness  then  existing, 
during  a  period  of  about  ten  months,  at  the  end  of  which 
time  he  failed,  owing  debts  thus  contracted  amounting  to 
$3,500.  The  court,  upon  these  facts,  held  that  it  was  clear 
that  the  transfer  thus  made  was  fraudulent  and  void  as 
against  subsequent  creditors.  The  design  to  obtain  a 
credit  after  the  conveyance  by  means  of  the  continued 
possession  and  apparent  ownership  of  the  property,  which 
the  debtor  thus  placed  beyond  the  reach  of  those  who 
might  give  him  future  credit,  was  plainly  fraudulent.  The 
conclusion  of  fraud  was  not  repelled  by  the  circumstance 
that  the  debts  owing  by  him  at  the  time  of  the  transfer 
were  paid  with  the  proceeds  of  credit  subsequently 
acquired  by  the  means  already  stated.  The  indebted- 
ness then  existing  was  merely  transferred,  not  paid,  and 
the   fraud  was   as   palpable  as  it  would   have  been  if  the 


'See  also  Ede  v.  Knowles,  2  Y.  &  109   N.  Y.    327.   16    X.    E.    Rep.    360: 

C.  N.  R.  172-178,  cited  in  Story's  Eq.  Neuberger  v.    Eeim,    l-l    N.    Y.   38, 

Jur.  §  361,  n.;  Dewey  v.  Moyer,  72  N.  31  N.  E.  Rep.  268  ;  Truesdell  v.  Sarles 

Y.  76;  May  v.  State  Nat.  Bank.  59  Ark.  10-1  N.  Y.  161,  10  X.   E.  Rep.  139,  and 

614,  28  S.  W.  Rep.  431.  cases  cited. 

2  34  N.  Y  ."KIN.     See  Todd    v.  Nelson, 


196 


FRAUD    ri'ON    Sl'I!SK(Jl'KNT    CREDITORS. 


97 


debts  remaining-  unpaid  were  owing  to  the  same  creditors 
to  whom  he  was  obligated  at  the   time  of  the  transfers.1 


^  97.  —  It  ma)'  be  here  observed  that  a  fraudulent  and 
deceitful  conveyance  of  property,  made  without  valuable 
consideration,  and  with  intent  to  injure  the  rights  or 
avoid  the  debts  of  any  other  person,  is  invalid  as  to  sub- 
sequent creditors  as  well  as  to  those  who  were  creditors 
at  the  time  of  the  conveyance.'2  In  Parkman  v.  Welch,3 
Dewey,  J.,  in  speaking  of  the  rights  of  subsequent  credit- 
ors, said  :  "  This  raises  the  question  whether  the  effect 
of  the  statute  of  13  Eliz.  c.  5,  is  to  avoid  conveyances 
made  upon  secret  trust  and  with  fraudulent  intent,  as 
well    in    favor   of  subsequent  as   previous  creditors.      On 

this  subject  we  apprehend  the  law  is  well  settled 

that  a  conveyance  fraudulent  at  the  time  of   making  it, 
might  be  avoided  in  favor  of  subsequent  creditors."4     In 


1  See  s.  P.  Carr  v.  Breese,  18  Hun 
(N.  Y.)  134,  1  Am.  Insolv.  Rep. 
355.  In  Todd  v.  Nelson.  109  N.  Y. 
327,  Peckham,  J.,  said  :  "The  theory 
upon  which  deeds  conveying  the  prop- 
erty of  an  individual  to  some  third 
party  have  been  set  aside  as  fraudulent 
in  regard  to  subsequent  creditors  of 
the  grantor  lias  been  that  he  has  made 
a  secret  conveyance  of  his  property 
while  remaining  in  the  possession  and 
seeming  ownership  thereof,  and  has 
obtained  credit  thereby ,  while  embark- 
•ng  in  some  hazardous  business  requir- 
ing such  credit,  or  the  debts  which  he 
has  incurred  wore  incurred  soon  after 
the  conveyance,  thus  making  the 
fraudulent  intent  a  natural  and  alniOSl 
a  accessary  inference,  and  in  this  way 
he  has  hern  enabled  to  obtain  the 
property  of  others  who  were  relying 
upon  an  appearance  which  was  wholly 
delusive."  See  Schreyer  v.  Scotl  L34 
[      3.  411.  10  s.  C.  Rep    579 

•  McLane   v.    Johnson,    43   Vt.    48. 


See  Clark  v.  French.  23  Me.  221  :  ( !ar- 
biener  v.  Montgomery  (Iowa),  66 
N.  W.  Rep.  900. 

3 19  Pick.  (Mass.)  237. 

1  See  Carpenter  v.  McClure,  39  Vt. 
9.  In  Day  v.  Co., ley,  lis  Mass.  527, 
the  court  observed:  "  It  is  well  sett  led 
that  if  a  debtor  makes  a  conveyance 
with  the  purpose  of  defrauding  either 
existing  or  future  creditors,  it  may  be 
impeached  by  either  class  of  creditors. 
or  by  an  assignee  in  insolvency  or 
bankruptcy  who  represents  both. 
Parknian  v.  Welch,  19  Pick.  (Mass.  | 
231  :  Thacher  v.  Phinney,  7  Allen 
(Mass.)  1  It! :  Winchester  v.  Charter, 
12  .Mien  (Mas.-.)  606  ;  Wadsworth  v. 
Williams,    100  Mass.    126.      As    it  was 

proved  in  this  case  that  the  grantor 

had  an  actual  fraudulent  design  which 

was  participated  in  by  the  grantee,  it 
is  immaterial  whether  the  demand- 
ants are  to  be  regarded  as  subsequent 

or  exist  inn'  creditors  as  to  Hie  convey- 
ance."   See  also  Clement  v.  Cozart, 


§97 


I'k  M   1)    I   ['(  iN    SU;SE<  'I   l.\  I    CREDITORS. 


197 


Tony  v.  McGehee,1    the  rule;  is   recognized  that  a   volun- 
tary   conveyance     may    be   impeached   by   a  subsequent 


112  N.  C.  412,  17  S.  E.  Rep.  486.  In 
some  States  a  different  rule  prevails, 
and  a  specific  intent  to  def  nun  I  credit- 
ors must  be  found  in  order  to  a  void 
the  deed  as  to  them.  Gardner  v. 
Kleinke,  46  N.  J.  Eq.  90,  18  Atl. 
Rep.  459;  cf.  Ditmanv.  Raule,  124  Pa. 
St.  225,  16  Atl.  Rep.  819;  May  v. 
State  Nat.  Bank,  59  Ark.  614,  28 S.  W. 
Rep.  431  ;  Fullington  v.  Northwestern 
Importers' etc.  Assoc.  48  Minn.  490, 
51  N.  W.  Rep.  475.  The  question 
whether  such  intent  to  defraud  sub- 
sequent creditors  exists  is  for  the 
jury.  Marshall  v.  Roll,  139  Pa.  St. 
399,  20  Atl.  Rep.  999. 

'38  Ark.  427  ;  1  Story's  Eq.  Jurisp. 
§  361  ;  Claflin  v.  Mess,  30  N.  J.  Eq. 
211;  Pope  v.  Wilson,  7  Ala.  690; 
Smith  v.  Greer,  3  Humph.  (Tenn.) 
118  ;  Reade  v.  Livingston,  3  Johns. 
Ch.  (N.  Y.)  481. 

Rights  of  subsequent  creditors  — 
Laughton  v.  Harden. — The  rights  of 
subsequent  creditors  are  considered 
and  the  general  policy  of  the  courts 
in  dealing  with  fraudulent  transfers 
learnedly  discussed  in  Laughton  v. 
Harden,  68  Me.  208.  The  doctrine  is 
there  asserted  that  a  voluntary  con- 
veyance from  father  to  son,  made  with 
the  intent  to  defraud  creditors,  may  be 
avoided  as  to  such  creditors  without 
allegations  or  proof  that  the  grantee 
participated  in  the  fraudulent  intent. 
The  court  said:  "  The  exact  question 
presented  is  this  :  Is  a  voluntary  con- 
veyance from  father  to  son,  made  by 
the  grantor  with  an  intent  to  defraud 
subsequent  creditors,  void  as  to  such 
creditors,  when  there  is  no  proof  that 
the  grantee  participated  in  that  intent 
when  he  received  or  accepted  the  (\t'o>\ ': 
The  statute  of  Elizabeth,  c.  5,  answers 
the  question  in  the  affirmative.  It 
pronounces  every  conveyance,    made 


to  hinder,  delay,'  or  defraud  creditors, 

utterly  void  as  against  such  creditors, 
unless  the  estate  shall  he,  •  u| good 

consideration,  and  bona  fide,  lawfully 
conveyed  to  sucfa  person,'  not  having 

at  the  1  inie  ■  any  manner  of  not  ice  '  of 
such  fraud.  (  'an  it  he  said  that  this 
estate  was  bona  fide,  'law  fulls  '  con- 
veyed, or  that  a  grantee  who  pays  no 
consideration  for  land  fraudulently 
conveyed  to  him  has  '  no  manner  of 
notice '  of  the  fraud ?  lint  this  is  not 
all  of  the  statute.  It  threaten- a  pen- 
alty against  a  party  to  such  convey- 
ance who,  being  privy  and  knowing 
thereto,  '  shall  wittingly  and  willingly 
put  in  use.  avow,  maintain,  justify, 
and  defend  the  same,'  as  true  and 
bonafide  and  upon  good  consideration. 
When  a  grantee  in  such  a  thvd  he- 
comes  informed  of  the  grantor's  intent 
does  he  not  assist  in  executing  that  in- 
tent by  an  endeavor  to  uphold  and 
maintain  the  deed?  Is  he  not,  in  the 
eye  of  the  law.  presumed  to  be  a  par- 
ticipator in  thefraud?  Should  not  an 
honest  grantee  repudiate  the  deed  ? 
The  grantee,  by  the  fraudulent  acl  of 
his  grantor,  becomes  the  trustee  or  de- 
positary of  property  which  belongs  to 
the  grantor's  creditors.  By  attempt- 
ing to  withhold  it  from  the  creditors, 
does  not  the  grantee  himself  commil  a 
fraud?  If  innocent  in  the  beginning, 
does  he  not  become  guilty  in  the  end? 
The  governing  and  acting  intent  was 
the  grantor's.  Does  not  the  grantee 
endeavor  to  avail  himself  of  it  and 
adopt  it  when  he  holdson  tot  he  deed? 
No  other  conclusion  can  be  reached. 

(  )f  course  it  will    not    at    tin-   day    he 

questioned  that  any  conveyance  maj 
he  avoided  by  subsequent  as  well  as 
by  prior  creditors,  if  fraud  wasbj  such 
conveyance  meditated  against  subse- 
quent creditors.      W'vinanv.  Brown, 


198 


PROOF   OF    INTENT. 


§98 


creditor  on  the  ground  that  it  was  made  in  fraud  of  exist- 
ing creditors;  but,  to  be  successful,  the  subsequent 
creditor  must  show  either  that  actual  fraud  was  intended,1 
or  that  there  were  debts  still  outstanding,  which  the 
grantor  owed  at  the  time  it  was  made." 

§  98.  Proof  of  intent.  —  The  subject  of  the  intent  of  the 
parties  to  an  alleged  fraudulent  transfer  will  be  considered 
presently.3  Speaking  of  the  sufficiency  of  the  evidence  of 
the  intent  to  defraud  subsequent  creditors,  Johnson,  J., 
said:4  "Upon  the  question  of  fraudulent  intent,  or 
whether  the  conveyance  is  fraudulent  in  fact,  as  to  subse- 
quent creditors,  it  is  proper  to  consider  the  circumstances 
of  its  being  voluntary,  and  the  party  indebted  at  the 
time  ;  and  if  additional  circumstances  connected  with 
those  two  be  sufficient  to  show  fraud  in  fact,  it  is  void  as 
to  subsequent   creditors.      It   is   not  necessary  that  there 


50  Me.  139  ;  Bailey  v.  Bailey,  61  Me. 
361 .  Any  other  view  of  this  question 
than  the  one  taken  by  us  would  permit 
ami  encourage  most  iniquitous  frauds 
upon  the  pari  of  badly  disposed  debt- 
ors. A  man  might  convey  all  his 
property  to  his  wife  or  minor  children 
upon  the  eve  of  an  expected  bank- 
ruptcy, and,  on  account  of  Ins  un- 
doubted credit  and  apparent  posses- 
sion of  means  and  property,  be  en- 
abled to  create  a  very  great  amount 
of  subsequent  indebtedness.  How 
could  a  creditor  show  thai  the  wife. 
and  a  fortiori,  that  the  young  minor 
children  knew  of  the  grantor's  fraud, 
unless  the  knowledge  can  he  imputed 
to  them  under  such  circumstances  as 
a  necessary  implication  of  law  ?  It 
would  tic  unnatural  for  a  debtor's 
wife  and  children  to  believe  him  to 
lie  a  di-honest  man.  and  uncommon 
for  then)  to  know  much  of  his  busi- 
ness affairs." 


'  Schreyer  v.  Scott  134  U.  S.  111. 
10  S.  C.  Rep.  579:  Horbach  v.  Hill. 
112  U.  S.  144.  149.  5S.  C  Rep.  81  : 
Neuberger  v.  Keim,  134  N.  Y.  38,  31 
N.  E.  Rep.  268. 

•  In    Day  v.  Cooley,  1  is  Maes.  527. 

the    court   says:      "  It    is    well   settled 

that  if  a  debtor  makes  a  conveyance 
with  the  purpose  of  defrauding  either 
existing  or  future  creditors,  it  may 
be  impeached  by  either  class  of 
creditors,  <>r  by  an  assignee  in  in- 
solvency or  bankruptcy  who  repre- 
sents both.  Parkman  v.  Welch,  19 
Pick.  231  .  Thacher  v.  Phinney,  7 
Allen.  146;  Winchester  v.  Charter, 
12  Allen,  606;  Wadsworth  v.  Wil- 
liams. 100  .Mass.  126." 
See  Chap.  XIV. 
1  Rose   v.   Brown,    11    W.    Va.    134. 

See  Kanawha  Valley  Hank  v.  Wilson, 
25  W.  Va.  242:  Hurt  v.  Timmons.  29 
W.  Va.453,  2  S.  E.  Rep.  780. 


§  98  PROOF   <  IF    INI  ENT. 

should  be  direct  proof  to  show  the  fraud  ;  it  is  to  be 
legally  inferred  from  the  facts  and  circumstances  ol  the 
case,  where  those  facts  and  circumstances  are  of  such 
a  character  as  to  lead  a  reasonable  man  to  the  conclusion 
that  the  conveyance  was  made  with  intent  to  hinder,  delay, 
or  defraud  existing  or  future  creditors.1  Where  such 
actual  intent  to  defraud  future  creditors  is  proved  it  is 
no  defense  to  the  action  that  the  debtor  may  have  in  his 
hands  at  the  time  property  sufficient  to  pay  all  existing 
debts.3  Folger,  J.,  delivering  the  opinion  of  the  New 
York  Court  of  Appeals  in  Shand  v.  Hanley,3  observes 
upon  this  subject  that  "  there  is  no  difference  in  result,  as 
there  is  no  difference  in  the  intention  to  produce;  the 
result,  between  a  transfer  of  property  to  defraud  a  creditor 
existing  at  the  time,  and  a  creditor  thereafter  to  be 
made."4  Some  of  the  re-enactments  of  the  statute  of 
Elizabeth  mention  subsequent  creditors  which  the  Eng- 
lish statute  does  not  do.5  A  conveyance  intended  to 
defraud  creditors  is  voidable  not  only  as  to  existing  but 
as  to  future  creditors.6  The  intent  must  be  mutual. 
Marriage,  as  we  shall  elsewhere  see,  is  a  valuable  consid- 
eration which  is  much  respected  in  the  law,  and  an 
ante-nuptial  settlement,  though  made  by  the  settler  with 
the  design  of  defrauding  his  creditors,  will  not  be  annulled 
in  the  absence  of  the  clearest  proof  of  participation  in 
the  fraud  on  the  part  of  the  wife.7 


1  See  Carpenter  v.  Roe,  10  N.  Y.  Y.)  586.  See  Case  v.  Phelps,  39  N.  Y. 
227  ;  Larkin  v.McMullin,  49 Pa.  St.  29.  164  ;  Carr   v.   Breese,    81    N.    Y.   584; 

2  Dosche  v.  Nette,  81  Tex.  2V,7>.  10  Thomson  v.  Dougherty,  L2  S.  .V  R. 
S.  W.  Rep.  1018.  (Pa.)  448;  Lockhard    \.    Beckley,    10 

3  71  N.  Y.  319.  82>  ;  Matter  of  W.  Va.  87;  Rogers  v.  Verlander,  30 
Brown,!'.!)  Hun  (N.  V.)  27;  Case  v.  W.  Va.  619,  5  S.  E.  Rep.  847;  May  v. 
Phelps,  39  N.  Y.  164.  Slate  Xat.  Bk.    59   Ark.  614,   28  S.   W. 

'See  Mullen  v.  Wilson.  44   Pa.   St.  Rep.  131. 

41G.  Trewit   v.    Wilson.    103    t".    S     32 

BMay  v.  State  Nat.  Bk.  5!)  Ark.  G14,  See  Burton  v.  Platter,  ■".::  Fed.  Rep  901. 

28  S.  W.  Rep.  433.  See  Chap.  XX. 

6Patridge  v.   Stokes,  66  Barb.    (N. 


200  CONVEYANCE    BY    EMBARRASSED    DEBTOR.  §99 

ii  99.  Conveyance  by  embarrassed  debtor. —  In  Wallace  v. 
Penfield,1  it  appeared  that  the  debtor,  who  was  somewhat 
indebted  at  the  time,  made  a  voluntary  settlement  upon 
his  wife,  by  causing  the  title  to  the  lands  in  question  to  be 
taken  in  her  name,  with  the  intention  of  immediately  build- 
ing upon  and  improving  the  land  and  using  it  as  a  perma- 
nent residence  for  himself  and  family.  It  was  shown  by 
a  preponderance  of  evidence  that  when  the  settlement  was 
effected,  and  during  the  period  the  land  was  being  built 
upon  and  improved,  the  debtor  had  property  which  cred- 
itors could  have  reached,  exceeding  in  value  his  indebted- 
ness by  several  thousand  dollars,  and  was  engaged  in  an 
active  business  with  fair  prospects.  All  the  creditors  whose 
claims  existed  at  the  date  of  the  settlement,  or  during  the 
period  when  the  debtor  was  making  expenditures  for 
improvements,  had  been  fully  paid  and  discharged.  The 
plaintiff's  claim  accrued  subsequently.  The  Supreme 
Court  of  the  United  States  very  properly  decided  that 
these  facts  were  entirely  consistent  with  an  honest  pur- 
pose to  deal  fairly  with  any  creditors  the  debtor  then  had, 
or  might  thereafter  have,  in  the  ordinary  course  of  his 
business,  and  that  neither  the  conveyance  to  the  wife,  nor 
the  withdrawal  of  the  husband's  means  from  his  business 
for  the  purpose  of  improving  the  land  settled  upon  the 
wife,  had  the  effect  to  hinder  or  defraud  his  then  existing1 
or  subsequent  creditors.  In  Pepper  v.  Carter,2  the 
Supreme  Court  of  Missouri  said  :  "  Some  would  make  an 
indebtedness  per  sc  evidence  of  fraud  against  existing 
creditors  ;  others  would  leave  every  conveyance  of  the 
kind  to  be  judged  by  its  own  circumstances,  and  from 
them  infertile   existence  or  non-existence  of  fraud  in  each 


1  106    U.  S.  260,    1    S.    C.    Rep.  '210.  v.  Scott,  134  U.   S.  400.   10  S.  ( !.  Rep. 

Where  a  husband  acquires  property  579. 

in  his  own  name    by  the  use  of   the         Ml    Mo.  543.     See  Can-  v.    Breese, 

separate  property  of  the  wife,  a  trans-  81  N.  Y.  584;  Schreyer  v.  Scott,  134 

1.1  to  her  is  urn  voluntary.     Schreyer  U.  S.  419,  10  S.  C.  Rep.  579. 


§99  CONVEYANCE     r>\     EMBARRASSED    DEBTOR.  201 

particular  transaction.  Without  determining  the  ques- 
tion as  to  existing  creditors,  we  may  safely  affirm  that  all 
the  cases  will  warrant  the  opinion  that  a  voluntary  con- 
veyance as  to  subsequent  creditors,  although  the  party  be 
embarrassed  at  the  time  of  its  execution,  is  not  fraudulent 
per  se  as  to  them  ;  but  the  fact,  whether  it  is  fraudulent  or 
not,  is  to  be  determined  from  all  the  circumstances.  1  do 
not  say  that  the  fact  of  indebtedness  is  not  to  weigh  in 
the  consideration  of  the  question  of  fraud  in  such  cases, 
but  that  it  is  not  conclusive."  The  language  of  this  case 
is  quoted  approvingly  by  the  same  court  in  the  later 
case  of  Payne  v.  Stanton,1  where  it  is  said  :  "  The  doc- 
trine is  well  settled  that  a  voluntary  conveyance  by  a 
person  in  debt  is  not,  as  to  subsequent  creditors,  fraudu- 
lent per  se.  To  make  it  fraudulent  as  to  subsequent 
creditors,  there  must  be  proof  of  actual  or  intentional 
fraud.  As  to  creditors  existing  at  the  time,  if  the  effect 
and  operation  of  the  conveyance  are  to  hinder  or  defraud 
them,  it  may,  as  to  them,  be  justly  regarded  as  invalid, 
but  no  such  reason  can  be  urged  in  behalf  of  those  who 
become  creditors  afterwards."  These  cases  in  Missouri 
are  quoted  from  at  length,  and  declared  to  be  controlling, 
by  the  United  States  Supreme  Court  in  Wallace  v.  Pen- 
field.2  In  the  latter  case,  however,  the  facts  proved  and 
found  by  the  court  expressly  repel  the  idea  that  the 
debtor  was  embarrassed  or  insolvent  when  the  settlement 
was  made  ;  and  the  decision  can  scarcely  be  regarded  as 
fully  approving  Payne  v.  Stanton  and  similar  cases  to  the 
effect  that  an  embarrassed  debtor  may  make  a  voluntary 
conveyance  which  will  be  upheld  against  subsequent 
creditors.  Some  of  these  Missouri  cases  are  at  least 
dangerously  near    the   border  line.     The  court,  in  Payne 


'59  Mo.    159.     See  Boatmen's  Sav-      515;   Loehr  v.   Murphy,  45   Mo.  App. 
ings  Bank   v.   Overall,   16   Mo.   App.      524. 

-'  106  U.  S.  260,  IS   i.  Rep   216. 


202  PLACING    PROPERTY    BEYOND    RISK.  §IOO 

v.  Stanton,  draws  the  distinction  between  existing  and 
subsequent  creditors,  and  says  that  the  conveyance 
might  hinder,  delay,  and  defraud  the  former,  "  but  no  such 
reason  can  be  urged  in  behalf  of  those  who  become  credit- 
ors afterwards."  This,  we  respectfully  urge,  is  attaching 
undue  importance  to  the  exact  date  or  period  of  time 
when  the  creditor's  claim  accrued.  The  embarrassed 
debtor,  under  this  rule,  might  voluntarily  alienate  the  mass 
of  his  property,  then  secure  loans  or  incur  obligations  to 
creditors,  whose  claims  would  thus  be  subsequent  to  the 
voluntary  conveyance,  and  with  the  money  thus  acquired 
liquidate  the  obligations  existing  when  the  conveyance 
was  effected.  The  embarrassment  of  the  debtor  when  the 
transfer  was  made  calls  into  being  the  claims  of,  and  obli- 
gations to,  the  new  creditors  ;  the  deficit  then  existed,  and 
the  liability  has  been  merely  transferred  to  new  parties, 
while  the  debtor's  embarrassed  estate  has  been  further 
crippled  or  rendered  hopelessly  insolvent  by  the  voluntary 
alienation.  It  seems  to  follow  that  the  safer  and  more 
prudent  rule  would  be  to  hold  that  no  voluntary  convey- 
ance by  an  embarrassed  debtor  should  be  upheld  against 
creditors,  whether  their  claims  accrued  prior  or  subsequent 
to  the  transfer. 

§  ioo.  Placing'  property  beyond  the  risk  of  new  ventures  or 
speculations —  This  brings  us  to  the  most  important 
branch  of  the  subject,  viz.,  the  effect  of  conveyances,  gifts 
and  settlements  made  to  avoid  the  risks  of  losses  likely  to 
result  from  new  business  schemes.  To  illustrate,  a  baker 
who  had  been  carrying  on  business  for  some  years,  being 
about  to  purchase  a  grocery  business,  which  he  intended  to 
carry  on  together  with  his  own  trade,  made  a  voluntary  set- 
tlement of  nearly  the  whole  of  his  property  upon  his  wife 
and  children.  He  then  purchased  the  grocery  business, 
and  having  lost  money  sold  it,  but  continued  in  business  as  a 
baker.      Three  years  after  the  settlement  he  filed  a  liquida- 


§  IOO  PLACING    PROPERTY    BEYOND    RISK.  203 

tion  petition.  The  court  held  that  independently  of  the 
question  whether  he  was  solvent  at  the  date  of  the  settle- 
ment, it  was  voidable  as  against  the  trustee  in  liquidation, 
under  the  stat.  13  Eliz.  c.  5,  on  the  ground  that  it  was  e\  i- 
dently  executed  with  the  view  of  putting  the  settler's  prop- 
erty out  of  the  reach  of  his  creditors  in  case  he  should  fail  in 
the  speculation  on  which  he  was  about  to  enter,  in  carrying 
on  a  new  business  of  which  he  knew  nothing.1  If  a  settle- 
ment  is  made  "  on  the  eve  of  a  new  business,  and  with  a  view 
of  providing  against  its  contingencies,  it  is  as  unavailing 
against  new  creditors  as  against  old  ones."2  This  same 
general  principle  was  involved  in  Case  v.  Phelps,11  in  the 
New  York  Court  of  Appeals.  Woodruff,  J.,  a  judge  of 
much  learning  and  great  vi^or  of  mind,  said:  "May  a  per- 
son  about  to  engage  in  business  which  he  believes  may 
involve  losses,  with  a  view  to  entering  upon  such  business, 
convey  his  property  to  his  wife,  voluntarily,  without  con- 
sideration, to  secure  it  for  the  benefit  of  himself  and  family, 
in  the  event  that  such  losses  should  occur?  I  cannot 
regard  this  question,  as  in  substance,  other  than  the  inquiry, 
May  a  man,  for  the  purpose  of  preventing  his  future  credit- 


1  Ex  parte  Russell.     In  re  Butter-  2  Black  v.  Nease,  37  Pa.  St.  438.    The 

worth,  19   Ch.  D.  588,    51  L.  J.  Ch.  law  should  not   be  so  framed  orcon- 

521,    46  L.  T.  N.  8.   113,   30   W.  R.  strued  as  to  tempt  men  to  desert  their 

584  ;  following  Mackay  v.  Douglas,  14  legitimate    business,    and    engage    in 

L.  R.  Eq.  106.     Compare  Winchester  specious  and   hazardous  speculations, 

v.  Charter,  102  Mass.  272;  Beeckman  concerning  the  dangers  of  which  thej 

v.    Montgomery,    14    N.  J.   Eq.   106:  are  ignorant,    by   allowing    them    to 

Cramer  v.  Reford,  17N.  J.  Eq.  383  ;  Na-  "make  a  feather  bed  on  which  they 

tional  Bank  of  Metropolis  v.  Sprague,  may  fall  lightly,"  under  the  plea  of 

20  N.  J.  Eq.  25;  Annin  v.  Annin,  24  affection  for  their  wives  and  children. 

N.   J.    Eq.  194  ;  Case  v.  Phelps,  39  N.  Thomson  v.  Dougherty,   12  S.    &    R 

Y.    164;    Gable    v.    Columbus  Cigar  (Pa.)  451. 

Co.,  140  Ind.  563,  38  N.  E.  Rep.  474  ;  339  N.  Y.  169  ;    Neuberger  v.  Keim, 

Bates  v.  Cobb,  29  S.  C.  395,  7  S.  E.  134    N.    Y.    35,    31    X.    E.    Rep.    868; 

Rep.  743;  Lewis  v.  Simon,  72  Tex.  470,  Schreyer  v.  Scott.  134  O.  S.    106,    111, 

10S.  W.  Rep.  554;  Sommermeyer  v.  10  S.  C.    Rep.  579;  Eorbach  v.    Hill, 

Schwartz,  89  Wis.  66,  61  N.  W.   Hep.  112  U.  S.  144,  149,  5  S.  C.  Rep.  81. 
311. 


204  PLACING    PROPERTY    BEYOND    RISK.  §  IOO 

ors  from  collecting  their  demands  out  of  his  property  then 
owned,  and  for  the  purpose  of  casting  upon  them  the  haz- 
ards of  his  success  in  the  business  in  which  he  is  about  to 
engage,  convey  his  property  without  consideration  to  his 
wife,  in  order  to  secure  the  benefit  of  it  to  himself  and 
family,  however  disastrous  such  business  may  prove,  and 
continue  in  the  possession,  not  even  putting  the  deeds  upon 
record  until  after  such  subsequent  indebtedness  arises?"1 
The  question  of  the  validity  of  a  gift  or  settlement,  as  to 
subsequent  creditors,  as  we  have  said,  turns  upon  the  ques- 
tion as  to  whether  it  was  made  in  contemplation  of  future 
debts,'2  or  to  secure  the  debtor  "  a  retreat  in  the  event  of  a 
probable  pecuniary  disaster  in  a  hazardous  business  in  which 
he  proposed  to  embark."3  To  bring  the  transfer  within 
this  rule,  "  it  must  be  executed  with  the  intention  and 
design  to  defraud  those  who  should  thereafter  become  his 
creditors,"4  the  debtor  proposing  to  throw  the  hazards  of 
the  business  in  which  he  is  about  to  engage  upon  others, 
instead  of  honestly  holding  his  means  subject  to  the  chance 
of  the  adverse  results  incident  to  all  business  enterprises.6 
But  these  cases  must  be  co.nsidered  within  proper  restric- 
tions. Thus,  where  a  man  who  was  solvent  paid  for  prop- 
erty which  he  procured  to  be  conveyed  to  his  wife,  and 
there  was  no  evidence  tending  to  show  that  by  so  doing 
he  intended  to  defraud  any  subsequent  creditors,  it  has 
been   held   that   the   conveyance  is  perfectly  valid  in  her 


'See  City  Nat.  Bank  v.  Hamilton,  See  AVilliams  v.  Banks,  11  Md.    198; 

34  N.  J.  Eq.  160.  Moore  v.  Blondheini,  19  Md.  172. 

2  Walter   v.  Lane,  1  MacAr.  (D.  C.)  Smith    v.  Vodges,  92  U.  S.  183; 

282.  Sexton   v.    Wheaton,  8  Wheat.  229  ; 

3 Fisher  v.  Lewis,  69  Mo.  631  ;   Neu-  Mullen    v.    Wilson,   44   Pa.    St.   418; 

berger  v.  Keim,  134  N.  Y.  33.  38,  :il  Stileman   v.    Ashdown,   2    Atk.   481. 

N     K.    Re]>.   268;    Schreyer  v.    Scott,  Compare  United  States  v.  Griswold,  7 

134  U.  S.  406,  411  ;   10  S.  C.  Rep.  579.  Sawyer,  335;   McPherson    v.    Kings- 

See  Carver  v.  Barker,  73  Hun  (N.  Y.)  baker,    22    Kan.    646;    Sheppard    \. 

416,  26  N.  Y.  Supp.  919.  Thomas,    24    Kan.    780;     Kirksey    v. 

1  Matthai  v.  Heather,    57  Md.  484.  Snedecor,   60  Ala.   192  ;    Marshall  v. 

Groom,  60  Ala.  121. 


§   100 


PLACING    PROPERTY    BEYOND    RISK. 


205 


favor  as  against  his  subsequent  creditors,  and  that  a  hus- 
band had  a  right  to  make  a  settlement  of  property  upon 
his  wife,  provided  it  was  free  from  fraud.1  Subsequent 
indebtedness  cannot  be  invoked  to  make  that  fraudulent 
which  was  honest  and  free  from  impeachment  at  the 
time.3  In  Graham  v.  Railroad  Co.,3  a  leading  and  im- 
portant  case,  it  is  said  to  be  a  well-settled  rule  of  law 
that  if  an  individual,  being  solvent  at  the  time,  without  any 
actual  intent  to  defraud  creditors,  disposes  of  property  for 
an  inadequate  consideration,  or  even  makes  a  voluntary 
conveyance  of  it,  subsequent  creditors  cannot  question 
the  transaction.  The  argument  advanced  is  that  such 
creditors  are  not  injured  ;  they  gave  credit  to  the  debtor 
in  the  status  which  he  had  after  the  voluntary  conveyance 
was  made.  This  rule  was  applied  to  an  alienation  by  a 
corporation.4 


1  Curtis  v.  Fox,  47  N.  Y.  301  ;  Phil- 
lips v.  Wooster,  36  N.  Y.  412.  The 
rule  obtaining  in  New  York  is  clearly 
laid  down  in  Scrheyer  v.  Scott,  134 
U.  S.  411,  10  S.  C.  Rep.  579,  where 
it  is  said:  "It  is  evident  that  the 
rule  obtaining  in  New  York,  as  well 
as  recognized  by  this  court,  is 
that  even  a  voluntary  conveyance 
from  husband  to  wife  is  good  as 
against  subsequent  creditors;  unless  it 
was  made  with  the  intent  to  defraud 
such  subsequent  creditors  ;  or  there 
was  secrecy  in  the  transaction  by 
which  knowledge  of  it  was  withheld 
from  such  creditors,  who  dealt  with 
the  grantor  upon  the  faith  of  his  own- 
ing the  property  transferred  ;  or  (lie 
transfer  was  made  with  a  view  of 
entering  into  some  new  and  hazard- 
ous business,  the  risk  of  which  the 
grantor  intended  should  be  cast  upon 
the  parties  having  dealings  with  him 
in  the  new  business."  This  language  is 
cited  with  approval  in  Neuberger  v. 
Keim,  134  N.  Y.  38,  31  N.  E.  Rep.  2(58. 


2  See  Babcock  v.  Eckler,  24  N.  Y'. 
630 ;  Reade  v.  Livingston,  3  Johns. 
Ch.  (N.  Y.)  500;  Seward  v.  Jackson. 
8  Cow.  (N.  Y.)  406  ;  Hinde's  Lessee  \. 
Longworth,  11  Wheat.  199. 

3 102  U.  S.  148.  See  Wallace  v. 
Penfield,  106  U.  S.  260,  1  S.  C.  Rep. 
216;  Mattingly  v.  Nye,  8  Wall.  370; 
Schreyer  v.  Scott,  134  U.  S.  41  I,  10  S. 
C.  Rep.  579;  Sexton  v.  Wheaton,  8 
Wheat.  239,  per  Marshal,  C.  .1.: 
1  Am.  Lea.  Cas.  17,  where  the  law 
upon  this  subject  is  learnedly  dis- 
cussed in  a  note.  In  Porter  v.  Pitts- 
burg Bessemer  Steel  Co.,  120  U.  S. 
673,  7  S.  C.  Rep.  1206,  the  court  said  : 
"It  is  a  well-settled  principle  that 
subsequent  creditors  cannol  be  heard 
to  impeach  an  executed  contract, 
where  their  dealings  with  the  com- 
pany, of  which  They  claim  the  benefit, 
occurred  after  the  contract  became 
an  executed  contract." 

4  Compare  Wabash,  St.  L.  &  P.  Ry. 
Co.  v.  Ham,  114  TJ.  S.  587,  594,  5  S.  C. 
Rep.  1081. 


206  CONVEYANCES  AVOIDED.  §  IOI 

§  101.  Conveyances  avoided.— The  Chancellor  said,  in 
Beeckman  v.  Montgomery:1  "Aside  from  the  fact  that 
the  deed  was  made  by  the  father  in  contemplation  of 
future  indebtedness,  there  are  strong  circumstances  indi- 
cating the  existence  of  actual  fraud.  The  deed  was  made 
on  the  eve  of  the  grantor  engaging  in  mercantile  busi- 
ness, which  would  require  for  its  successful  pursuit  both 
capital  and  credit.  He  disposed,  at  the  time  of  the  con- 
veyance, of  the  entire  control  of  his  real  estate,  which 
constituted  the  bulk  of  his  property,  leaving  him- 
self an  inadequate  capital  for  conducting  his  business  or 
raising  loans.  The  credit  which  he  obtained  was  due  to 
his  former  standing  as  a  man  of  responsibility.  The  con- 
veyances to  his  children  were  not  advancements  adapted 
to  the  means  and  situation  in  life  of  the  grantor  —  they 
absorbed  his  whole  property.  The  deed  to  the  defendant 
was  made  while  he  was  an  infant  but  sixteen  years  of  age, 
not  needing  an  advancement,  and  not  of  discretion  to 
take  charge  and  management  of  the  property.  It  was 
kept  secret  for  more  than  a  year,  and  was  not  left  at  the 
office  to  be  recorded  till  the  day  after  a  suit  at  law  was 
commenced  by  the  complainants  for  the  recovery  of  their 
debt."2  If  a  person  about  to  contract  debts  makes  a 
voluntary  conveyance,  with  the  intent  to  deprive  future 
creditors  of  the  means  of  enforcing  collection  of  their 
debts,  and  this  purpose  is  accomplished,  it  is  very  clear 
that  such  creditors  are  injured  and  defrauded.3     A  cred- 


■II   X.  J.    Eq.    112;  see  Haston    v.  413;    Barling  v.    Bishopp,    29    Beav. 

Castner,  31  N.  J.  Eq.  704;  Francis  v.  417;  Clark  v.  Killian,   103  U.   S.  766, 

Lawrence,    18   X.  .1.    Eq.  508,  22  Atl.  affi'g  Killian  v.  Clark,  3  MacAr.  (D. 

Rep.  259.  C.)  37!) ;  Hitchcock  v.  Kieley,  -11  Conn. 

2  See  City  Nat.  Bank  v.  Hamilton,  34  (ill  ;  Williams  v.  Davis,  69  Pa.  St.  21  ; 

N.J.  Eq.  158  ;  Carpenter  v.  Carpenter,  Pawley  v.  Vogel,  42  Mo.  303;  Hersch. 

25  N.  .1.   Eq.   194;  Dick   v.   Hamilton,  feldt  v.  George,  6  Mich.  456  ;  Hilliard 

Deady,   322;  Burdick   v.   Gill,   7   Fed.  \.    Cagle,   46   Miss.    309;   Huggins  v. 

Rep.  668  :  Cart*  r  v.  Grimshaw,  49  N.  Perrine,  30  Ala.  396. 

II.  LOO;  Snyderv.  Christ,  39   Pa.  St.  *  Burdick    v.  Gill,  i    Fed.   Rep.  670. 
199;    Mullen    v.    Wilson,    II    Pa.   St. 


§102  CONVEYANCES    NOT    FRAUDULENT.  207 

itor  has  a  right  when  extending  credit,  to  rely  upon  the 
honesty  and  good  faith  of  the  debtor,  and  may  assume, 
without  inquiry,  that  the  debtor  has  made  no  fraudulent 
conveyances  of  property.1  In  Francis  v.  Lawrence8  the 
court  say  :  "The  deed  was  not  delivered  to  the  grantee. 
and  not  placed  upon  the  record,  but  was  held  by  the  wife, 
and  the  husband  was  thus  enabled  to  trade  upon  the  false 
credit  which  he  acquired  by  being  the  apparent  owner  of 
the  property,  while  the  deed  was  ready  to  be  put  upon 
the  record  at  a  moment's  notice This  transac- 
tion cannot  be  regarded  in  any  other  light  than  as  a  fraud 
upon  the  creditors." 

§102.  Conveyances  not  considered  fraudulent.  —  But  the 
courts  will  not  willingly  overturn  a  settlement  or  volun- 
tary alienation  at  the  suit  of  a  subsequent  creditor,  upon 
slight,  unsubstantial,  or  intangible  proof.  Carr  v. 
Breese3  is  an  illustration.  In  that  case  the  New  York 
Court  of  Appeals,  overruling  the  court  below,  decided  that 
where  a  husband,  worth  $22,000,  owing  debts  amounting  to 
$2,800,  which  were  subsequently  paid,  and  engaged  in  a 
prosperous  business,  purchased  property  costing  about 
$16,000,  and  took  it  in  the  name  of  his  wife,  and  paid 
about  $10,000  of  the  consideration  by  mortgage  on  his 
real  estate,  and  the  balance  by  mortgage  upon  the 
premises  purchased,  the  settlement  was  not  unsuitable  or 
disproportionate  to  his  means.  Miller,  J.,  speaking  for 
the  court,  said  :  "  There  was  no  insolvency  in  fact  or  in 
contemplation,  no  new  enterprise  started  which  involved 
unusual  or  extraordinary  hazard,  but  the  continuance  of 
the  business  of  the  grantor  for  the  period  of  three  years, 
and  no  dishonest  failure,  or  attempt  in  any  form  to 
defraud.     An  existine  indebtedness  alone  does  not  render 


'Ibid.  (N.  Y.)  134.     s><'  s.  i>.   Phoenix   Bank 

2  48  N.  J.  Eq.  511,  2,2  Atl.   Eep.  259.      v.  Stafford,  si)  N.  Y.  105  .  Truesdell  v. 
381  N.  Y.  584;  overruling-   18   Hun      Sarles,104  N.Y.  Wis,  LON.  E.  Rep.  189. 


208  SUBSEQUENT   CREDITORS.  §  103 

a  voluntary  conveyance  absolutely  fraudulent  and  void  as 
against  creditors,  unless  there  is  an  intent  to  defraud.1 
This  is  especially  the  case  when  it  is  shown  that  the  resi- 
due of  the  property  was  amply  sufficient  to  pay  all 
debts,"  ~  and  that  the  credit  was  given  without  any  reli- 
ance on  the  ownership  of  the  land  conveyed.3  It  may  be 
observed  that  although  in  Babcock  v.  Eckler,4  the  dis- 
proportion was  far  greater  than  in  Carr  v.  Breese,5  the 
conveyance  was  upheld;  but  in  this  case  evidence  was 
introduced  tending  to  show  that  the  conveyance  was  not 
entirely  voluntary.6  Again  in  Carpenter  v.  Roe,7  the 
court,  citing  Hinde's  Lessee  v.  Longworth,8  says:  "  If  it 
can  be  shown  that  the  grantor  was  in  prosperous  circum- 
stances and  unembarrassed;  and  that  the  gift  was  a  reason- 
able provision,  according  to  his  state  and  condition  in 
life,  and  leaving  enough  for  the  payment  of  the  debts  of 
the  grantor,"  the  presumptive  evidence  of  fraud  would  be 
met  and  repelled.9 

£  103.  Subrogation  of  subsequent  creditors. — A  device  to 
which  fraudulent  insolvents  often  resort  consists  in  making 
a  voluntary  coveyance  and  following  this  up  by  paying 
all  the  antecedent  or  existing  creditors,  practically  with 
the  moneys  derived  from  the  credit  extended  by  subse- 
quent creditors.      Savage  v.    Murphy,10    already   quoted, 


•Citing  Van    Wyck    v.   Seward,    G  6  See  Childs    v.  Connor,    :;*   N.    Y. 

Paige  (X.  V.)  62  ;  Second   Nat.  Bank  Superior  Ct.  471. 

of  Beloit  v.   Merrill,    81  AVis.  142,  50  MO  N.  Y.  227. 

N.    W.    Rep.  On;',.  11  Wheat.  213. 

'Citing  Jackson  v.  Post,  15  Wend.  Sec  Crawford    v.   Logan,   97   HI. 

(N.  Y.  1  588;  Phillips   v.   Wooster,    36  396  ;  Clark  v.    Killian,  103  U.  S.  766  ; 

X.  Y.   112  :   Dunlap  V.  Hawkins,  59  N.  Wallace  v.  Penfield,    106  IT.  S.    200,  1 

Y.342.  S.  C.  Rep.    216;   Pepper  v.   Carter,  11 

'Sorenson     v.   Sorenson,   69   Mich.  M<>.    540;  Payne  v.  Stanton,   59   M<>. 

351    37  N.  W.  Rep.  358.  158;    Genesee    River    XTat.    Bank   v. 

'j  I  X.  Y.  623.  Mead,  92  N.  Y,  637. 

>81N.  Y.  584.  "ol  X.  Y  508.     Barhydl    v.    Perry. 

57  Iowa419,  10  N.  W.  Rep.  820. 


§  104    SUBSEQUENT  AND  ANTECEDENT  CREDITORS.      20Q 

was  such  a  case.1  It  is  a  most  unsubstantial  mode  of 
paying  a  debt  to  contract  another  of  equal  amount.  It  is 
the  merest  fallacy  to  call  such  an  act  getting-  out  of 
debt,2  and  the  case  should  be  treated  as  if  the  prior 
indebtedness  had  continued  throughout/5  or  as  a  case  of 
a  continued  or  unbroken  indebtedness.4 

§  104.  Subsequent  creditors  sharing  with  antecedent  credit- 
ors.—In  a  case  which  arose  in  Massachusetts,  in  which  an 
administrator  sought  to  annul  a  fraudulent  alienation  made 
by  his  intestate,  Dewey,  J.,  said:  "Though  the  ground 
of  avoiding  this  conveyance  is  that  the  land  was  liable  to 
be  taken  to  satisfy  existing  creditors  only,  yet  when  the 
conveyance  is  avoided,  the  proceeds  of  the  sale  will  be 
assets  generally,  and  other  creditors  will  receive  the  ben- 
efit thereof  incidentally."5  '  In  Kehr  v.  Smith,6  Davis,  ]., 
observed  :  "  It  is  well  settled,  where  a  deed  is  set  aside 
as  void  as  to  existing  creditors,  that  all  the  creditors, 
prior  and  subsequent,  share  in  the  fund  pro  rata.'' 
Mr.  Peachey  observes  :8  "It  has,  however,  never  been 
disputed  but  that  a  subsequent  creditor  would  participate 
in  the  benefit  of  a  decree  instituted  by  a  prior  creditor, 
and  would  have  the  same  equity  for  having  the  property 


'See   §  96.     See   also   Churchill   v.  10  N.  Y.  189  ;  Thomson  v.  Dougherty, 

Wells,  7Coldw.  (Term.)   364;  Moritz  12  S.   &  K.  (Pa.)  448;  Henderson  v. 

v.  Hoffman,  35  III.  553.  Hoke,   3   Dev.    (N.    C.)    Law    12-14; 

2  Paulk  v.  Cooke,  39  Conn.  566.  Kissam  v.   Edmundson,    1   Ired.    Eq. 

3  Edwards  v.  Entwisle,  2  Mackey  (N.  C.)  180;  Sexton  v.  Wheaton,  1 
(D.  C.)  43;  Antrim  v.  Kelly,  8  N.  B.  Am.  Lea.  Ca*.  45;  Norton  v.  Norton, 
R.  587,  1  Feci.  Cases,  1062;  Rudy  v.  5Cush.  (Mass.)  529  ;  O'Daniel  v.  Craw- 
Austin,  56  Ark.  73,  19  S.  W.  Rep.  111.  ford,  4  Dev.  |  X.  ( !.  Law.  197-204  : 
.    4  Paulk  v.  Cooke,  39  Conn.  566.  Reade  v.  Livingston,  3  .Johns.  (  !h.  (N. 

5  Norton  v.  Norton,  5  Cush.  (Mass.)  Y. )  4*1-4!)!!  ;  Townshend  v. Windham, 

530.  2  Ves.  Sen.    10;  Jenkyn  v.   Vaughan, 

620Wall.  30.  3   Drewry,   419-124.      See    Bassetl  v. 

"  Citing  Magawley's  Trust,  5   De  G.  MeKenna,  52   Conn.   412.    citing   this 

and  Sm.  1  ;  Richardson  v.  Smallwood,  section;     Day    v.    Cooley,    L18     Mass. 

Jacob  552-558  ;  Savage  v.  Murphy,  34  524. 

N.  Y.  508;  lley  v.   Niswanger,  Harp.  "Peachey on  Marriage  Settlements, 

Eq.  (S.  C.)  295  ;  Robinson  v.  Stewart,  p.  197. 
14 


2IO  MIXED    CLAIMS.  §  105 

applied.  Again  no  distinction  has  been  drawn  in  such 
cases  between  the  different  classes  of  creditors,  that  is, 
between  those  whose  debts  existed  at  the  time  the  deed 
was  executed,  and  those  who  became  creditors  subse- 
quently, or  that  any  priority  can  be  given  to  those  who 
were  creditors  at  the  date  of  the  instrument  over  the 
subsequent  creditors ;  all  would,  in  fact,  participate  pro 
rata"1  There  has  been,  however,  some  hesitancy  on  the 
part  of  the  courts  in  holding  that  a  deed  which  existing 
creditors  could  avoid,  was,  after  avoidance  by  them,  to  be 
considered  void  as  to  all  creditors  ;  for  that  is  practically 
the  effect  of  letting  in  subsequent  creditors,  especially  to 
share  pro  rata.  Though  the  deed  cannot  be  set  aside  at 
the  instance  of  subsequent  creditors,  yet  the  authorities 
seem  to  give  them  the  same  benefit  when  the  antecedent 
creditors  succeeded  in  annulling  it.  It  would  seem  to 
result  that  while  there  is  a  discrimination  in  the  right  to 
attack  the  conveyance,  there  is  none  as  to  sharing  in  the 
successful  result.  In  considering  this  feature,  however, 
the  rule  that  a  creditor,  by  filing  a  bill,  acquires  an 
equitable  lien  and  preference  in  certain  cases,  must  not 
be  overlooked.3 

J;  105.  Mixed  claims  accruing  prior  and  subsequent  to  alien- 
ation.—The  right  of  a  grantee  or  vendee,  from  whom  a 
creditor  seeks  to  wrest  property  held  in  trust  for  a  debtor, 
to  require  the  creditor  to  show,  in  a  proper  case,  that  his 
debt  accrued  before  the  conveyance  which  is  questioned, 
is  clearly  established.  As  a  voluntary  or  fraudulent  con- 
veyance is  ordinarily  good  between  the  parties,  and  can 
be  upheld  except  as  against  certain   classes  of  persons,  it 


■Cited    with   approval  in  Amnion's  Thomson  v.  Dougherty,   12   S.  &  R. 

Appeal,  ii:;  I'a.St.  289.     SeeChurchill  (Pa.)  448;  Kidney  \.  Coussmaker,  12 

\     Wills.  ',  Coldw.  (Tenn.)  364  ;  Trim-  Ves.  Jr.  136,  note.  Compare  Converse 

ble   v.  Turner,  21    Miss.  :;4S  :  Kipp  v.  v.  Hartley.  31  Conn.  379. 

Hanna,  2  Bland's*  !h.  (Md. )  26  ;  Beach  2See  Pullis  v.  Robinson,  3  Mo.  App. 

\    White,  Walker's  Ch.  (Mich.)  495;  548.    See  §61;  also  Chap.  XXV. 


§  105  MIXED   CLAIMS. 


21  l 


follows  that  the  vendee  can  force  the  plaintiff  to  show 
that  he  comes  within  some  privileged  class  entitled  to 
impeach  the  transaction. 

Where  it  is  important  or  vital  to  the  creditor's  success 
to  show  that  he  was  an  existing  creditor  as  to  the  con- 
veyance, and  it  appears  that  some  of  the  items  of  his 
claims  accrued  prior  and  others  subsequent  to  the  con- 
veyance, and  all  these  items  are  embodied  in  one  judg- 
ment, it  has  been  held  in  several  cases  that  he  is  to  be 
treated  as  a  subsequent  creditor,  not  entitled  to  attack 
the  conveyance.1  In  Baker  v.  Gilman,2  the  creditor  was 
an  attorney,  and  his  claim  was  for  services.  Johnson,  J., 
said  :  "  The  plaintiff  was  clearly  a  subsequent  creditor  of 
Gilman.  His  employment,  by  virtue  of  his  retainer, 
was  a  continuous  one  until  the  determination  of  the 
actions.  It  was  a  single  demand  for  services,  a  small 
portion  of  which  were  rendered  before  the  conveyance, 
and  the  far  larger  portion  long  afterwards.  This  being 
embraced  in  one  judgment,  nearly  two  years  after  the 
conveyance,  renders  the  plaintiff  clearly  a  subsequent 
creditor."  In  Reed  v.  Woodman,3  it  appeared  from  the 
evidence  that  the  greater  part  of  the  debt  which  was 
the  foundation  of  the  judgment  rendered  in  favor  of 
the  demandant  accrued  subsequent  to  the  date  of  the 
challenged  conveyance.  The  court  said  :  "  The  levy  was 
entire,  and  cannot  be  so  apportioned  or  divided  as  to 
constitute  a  satisfaction  for  that  part  of  his  debt  which 
was  due  prior  to  that  deed.  The  demandant,  having 
taken  judgment  for  his  whole  demand,  is  to  be  regarded 
as  a  creditor  subsequent  to  the  conveyance  of  the  land 


•See  Miller    v.   Miller,   23   Me.  22,  Pittsb.  L.  J.  (Pa.)  135;  Henderson  v. 

39  Am.  Dec.  598,  and  notes;  Reed  v.  Henderson,   133  Pa.   St.   399,    19    \tl. 

Woodman,  4  Me.  400  :  Usher  v.  Hazel-  Rep.  424. 

tine,   5  Me.   471  ;   Quimby  v.  Dill,   40  2  52  Barb.  (N.  Y.)  33. 

Me.   528  ;   Moritz   v.  Hoffman,  35  111.  3  4  Me.  400. 
558.      Contra,   Ecker   v.  Lafferty,  20 


212  STATUS   Ol     CREDITORS.  §  106 

in  question  by  his  debtor.      He  cannot  therefore  impeach 
that  conveyance  but  by  showing  actual  fraud."  1 

$  106.  Status  of  creditors  whose  claims  accrued  after  notice 
of  alienation.  —  As  a  general  rule  a  subsequent  creditor 
who  acquired  his  claim  with  knowledge  or  notice  of  the 
conveyance  sought  to  be  annulled,  cannot  attack  it  as 
fraudulent.'  In  Baker  v.  Gilman,3  Johnson,  J.,  said  : 
"I  do  not  think  a  creditor,  who  has  trusted  his  debtor 
after  being  fully  informed  by  the  latter  that  he  has  put 
his  property  out  of  his  hands,  by  a  conveyance,  valid  as 
between  him  and  his  grantee,  though  voidable  as  to  exist- 
ing creditors,  should  ever  be  allowed  to  come  into  court 
and  claim  that  such  conveyance  was  fraudulent  and  void, 
as  to  him,  on  account  of  such  indebtedness.  As  to  such 
creditor,  a  conveyance  of  that  kind  would  not  be  fraudu- 
lent, in  any  sense,  and  could  not,  on  that  ground,  be 
avoided."  But  the  mere  recording  of  a  conveyance  is  not 
constructive  notice  to  a  creditor.4 


1  See  Humes  v.    Scruggs,  94  TJ.  S.  '       3  52  Barb.  (N.  Y.)  39.      See  Sledge 
22.  v.  Obenchain,  58  Miss.  670  ;   Kane  v. 

2  Lehrnberg  v.  Biberstein,  51  Tex.  Roberts,  40  Md.  594  :  Williams  v. 
457 ;  Monroe  v.  Smith,  79  Pa.  St.  459  ;  Banks,  11  Md.  198;  Sheppard  v. 
Herring  v.  Richards,  3  Fed.  Rep.  443.  Thomas,  24  Kan.  780.  Compare 
See  Knight  v.  Forward,  63  Barb.  (N.  Kirksey  v.  Snedecor,  60  Ala.  192. 
Y.)  311  ;  Lewis  v.  Castleman,  27  Tex.  4  Marshall  v.  Roll,  139  Pa.  St.  399, 
107  20  Atl.  Rep.  999. 


CHAPTER  VII. 


WHO  MAY  BE  COMPLAINANTS. 


§  107. 
108. 
109. 
110. 
111. 
112. 
113. 
114. 
115. 
116. 
117. 
118. 


Parties  complainant. 

Joinder  of  complainants. 
Suing  on  behalf  of  others. 
"And  others." 
Surety. 

>  Executors  and  administrators. 

Assignee  in  bankruptcy. 

General  assignee. 

Receivers. 

Receivers  of  corporations. 

Foreign  receivers. 


^  119.  Creditors  of  corporations. 

120.  Sheriff. 

121.  Heirs  — Widow. 

122.  Husband  and  wife. 

123.  Tort  creditor. 

124.  Overseer  of  the  poor. 

125.  Creditors  having  liens. 

126.  Purchaser     removing     ii 

brances. 

127.  Creditors  opposing  will. 
127a.  Cestui  que  trust. 


§  107.  Parties  complainant.  —  The  rights  of  the  two  great 
classes  —  existing  and  subsequent  —  into  which  creditors 
are  necessarily  divided,  having  been  considered,1  the  dis- 
cussion would  not  be  complete  without  noticing,  in 
detail,  the  cases  in  which  complainants  in  different  capac- 
ities are  permitted  to  prosecute  the  various  litigations 
under  consideration.  The  principle  must  be  kept  con- 
stantly in  view  that  fraudulent  conveyances  and  secret 
trusts  can  be  assailed  only  by  those  who  have  been 
injured,3  andare  voidable  only  in  favor  of  parties  occupying 


'See  Chaps.  V.,  VI. 

3  Sides  v.  McCullough,  7  Mart.  (La.) 
654  :  12  Am.  Dec.  519  ;  Edwards  v. 
McGee,  31  Miss.  143;  Philips  v. 
Wooster,  36  N.  Y.  412  ;  Morrison  v. 
Atwell,  9  Bosw.  (N.  Y.)503  ;  Scholey 
v.  Worcester,  4  Hun  (N.  Y.)  302; 
Pass  v.  Lynch,  117  N.  C.  454.  In 
Nash  v.  Geraghty,  105  Mich.  382,  63 
N.  W.  Rep.  437,  the  court  says  : 
' '  Before  a  decree  is  granted  on  behalf 


of  creditors  setting  aside  a  convey- 
ance, it  should  be  made  affirmath  ■  l\ 
to  appear  that  the  creditors  have 
been  substantially  injured  by  the 
transfer."   Hal]  v.  Moriarity,  57  Mich. 

345.      A.  conveyed    to    B.    in    hand    of 

creditors.    A  railroad  company 

to  take  the  land  and  pay  an  award  of 

damages.    Whensued  for  the  amount 

Of  the  award  the  c pany  Se1   up  that 

15.  derived  title  by  fraud      The  plea 


214 


PARTIES   COMPLAINANT. 


§  I07 


the  positions  of  non-assenting-1  creditors2  or  subsequent 
purchasers.3  The  creditor  who  first  institutes  a  suit  in 
chancery  to  avoid  a  fraudulent  conveyance  is  entitled  to 
relief,  without  regard  to  other  creditors  standing-  in  the 
same  right,  who  have  not  made  themselves  joint  parties 
with  him,4  or  taken  any  proceedings.  The  creditors 
spoken  of  as  entitled  to  discover  equitable  assets,  or 
annul  covinous  transfers,  are  the  creditors  of  the  grantor 
or  donor  who  has  made  the  fraudulent  conveyance,''  or 
has  title  to  the  equitable  assets.  That  a  "  fraud  upon 
the  public"  was  the  design  of  the  transfer  is  not  regarded 
as  a  sufficient  ground  for  avoiding  it.6  A  fraudulent  pur- 
pose is  harmless  if  unattended  with  any  wrongful  effect.7 
Manifestly,  the  fraudulent  intent,  as  we  shall  show,  must 
be  connected  with  the  transaction  assailed,  and  spring 
out  of  it,  and  not  relate  merely  to  some  entirely  inde- 
pendent act.s     It  does  not   follow  from  this  rule  that  it  is 


was  held  bad.  Lacrosse  &  M.  R.  R. 
Co.  v.  Seeger,  4  Wis.  268.  So  a  party 
with  whom  goods  are  deposited  for 
safe  keeping  cannot  set  up  fraud  in 
the  title,  the  court  in  one  case  saying  : 
•■  We  recognize  the  right  of  no  man, 
in  this  way.  to  turn  Quixote  and  fight 
against  fraud,  for  justice  sake  alone. 
In  the  mouth,  therefore,  of  this  de- 
fendant. 1  do  not  perceive  the  righl  to 

Sel     up    this    defense,   even    if    it    were 

true  in  fact."  Hendricks  v.  Mount,  5 
N.  .J.  L.  738,  743.  Compare  Bell  v. 
Johnson,  ill  III.  374.     Sec  §  91. 

( Ireene  v.  Sprague  Mfg.  Co.,  52 
Conn.  330. 

8(  e  Mosely  v.  Mosely.  15  N  Y. 
334  :  .Mien  v.  Steiger,  17  Col.  556, 
31  Pac.  Rep.  226;  Pass  v.  Lynch,  117 
N.  ('.  158;  Allenspach  v,  Wagner,  9 
Col.  132,  lu  Pac.  Rep.  802;  Burke  v. 
Adams,  80  Mo.  .".04.  The  creditor's 
debl  musl  be  due  before  the  bill  will 
lie.  Browne  v.  Hernsheim,  71  Miss. 
r.74.  14  So.  Rep.  36. 


"Burgett  v.  Burgett,  1  Ohio  4G9, 
13  Am.  Dec.  634 ;  Thompson  v.  Mooi-e, 
86  Me.  47  ;  Jewell  v.  Porter.  31  N.  H. 
34;  Byrod's  Appeal,  31   Pa.  St.  241. 

*McCalmonl  v.  Lawrence,!  Blatchf. 
235. 

Sec  Chapter  111.  Morrison  v.  At- 
well,  9  P.osw.  (N.  Y.)503;  Powers  v. 
Graydon,  10  Bosw.  <X.  Y.)  630.  A 
creditor's    bill    lias    been    supported 

founded  upon  the  judgmenl    claim  of 

a  cestui  que  trust,  against  the  personal 
representative  of  the  trustee,  to  reach 

the  proceeds  of  laud  sold  liv  the  trus- 
tee,   which    were    held    under   a    trust 

for  the  benefit  of  creditors.  Diefen- 
dorf  v.  Spraker,  10  N.  Y.  240. 

8 Griffin  \.  Doe.  d.  Stoddard,  12  Ala. 
783. 

•  Buford  v.  Keokuk  X.  L.  Packet 
('0..  :i  Mo.  A  pp.  159. 

8  Wilson  v.  Forsyth,  24  Barb.  (N. 
Y.)  128. 


§  ioS  JOINDER    01     COMPLAINANTS.  21 5 

necessary  that   any    particular   creditor   should    be   men- 
tioned   by    name.1       If     the    proofs    establish     that     the 
alienation  was  made  to  defeat  creditors,  and  that  the  plain 
tiff  was  a  creditor,  a  case  is  made  out. 

It  is  well  observed  by  Chancellor  Kent,  in  Brown  v. 
Ricketts,3  that  the  question  of  parties  to  a  suit  is  fre- 
quently perplexing  and  difficult  to  reduce  to  rule.  The 
remark,  as  will  be  manifest,  is  peculiarly  appropriate  to 
the  different  actions  and  proceedings  affecting  fraudulent 
alienations.  We  may  further  state  that  suits  by  creditors 
against  fraudulent  debtors  or  their  alienees,  form  no 
exception  to  the  general  rule  which  requires  that  all  the 
parties  in  interest  who  are  in  esse  shall  be  brought  into 
the  case.3 

§  108.  Joinder  of  complainants.—  Let  us  first  notice  the 
authorities  relating  to  the  joinder  of  complainants  in  the 
various  forms  of  actions  instituted  by  creditors  against 
fraudulent  alienees.  It  may  be  stated  as  a  general  propo- 
sition that  parties  who  are  creditors  by  several  judgments 
may  join  as  complainants  in  an  action  to  reach  property 
fraudulently    alienated     by     a     debtor."1      Such     parties 


1  Blount  v.  Costen,  47  Ga.  584.  Kan.    331;    Chapman   v.    Banker   .v 

23  Johns.  Ch.  (N.  Y.)  555.  Tradesmen  Pub.  Co.,    128   Mass.    t78 ; 

3Bowen   v.  Gent,  54  Md.  555.  Com-  Gates  v.  Boomer,    17    Wis.    155;  Wall 

pare  Christian  v.  Atlantic  &  N.  C.  R.  v.    Fairley,  73    N.    C.    464;     Reed    v. 

R.  Co.,  133  U.  S.  241,  10  S.  C.  Rep.  Stryker,  4  Abb.  App.  Dec.  (N.  Y.)  26 ; 

260.  Murray  v.  Hay.  1  Barb.  Ch.  (N.  5 

4  Buckingham   v.  Walker,  51    Miss.  Elliott   v.   Pontius,   136    1ml.    641.  35 

494  ;  Butler  y.   Spann,: 27  Miss.  234 ;  N.    E.    Rep.    562,    36    Id.    421.       In 

Sage  v.  Mosher,  28  Barb.  (N.  Y.)  287  :  Boniaf    v.    Means,  37  S.  C.  520, 

Snodgrass  v.  Andrews,  80  Miss.  472  :  16 S.  E.  Rep.  537,  the  courl  says  :    "  It 

North    v.    Bradway,    9   Minn.    183;  is  true,  that  such  a  proceeding,  called 

Dewey  v.  Mover,  72  N   Y.  74  ;  Simar  a  creditor's  bill,  is  usually  brought  in 

v.    Canaday,   53  N.    Y.   305:    Bank-  the  name  of  one  creditor,  for  himself 

night  v.  Sloan,  17   Fla.  286;   Ballen-      and  such  others  as  will  co in  and 

tinev.  Beall,  4  111   203  ;  White's  Bank      contribute   to   il xpenses.      Bui   1 

of  Buffalo   v.   Farthing,  9  Civ.  Pro.  do  not  understand  that,  where  several 

(N.   Y.)    64,    101    N.    Y.   344.    4    N.  judgment-creditors  go  on   the  record 

E.   Rep.    734;    Higby    v.    Ayres,    14  as  plaintiffs,   it   is  a    misjoinder    oi 


2l6 


rOINDER    OF    COMPLAINANTS. 


§  108 


possess  the  same  status,  and  are  in  pursuit  of  a  com- 
mon object  against  the  same  fraudulent  vendee,  and  the 
embarrassment  of  a  multitude  of  suits  is  thereby  avoided. 
In  Robbins  v.  Sand  Creek  Turnpike  Co.,1  the  court 
quoted  the  following  language  approvingly:  "Several 
persons  having  a  common  interest  arising  out  of  the  same 
transaction  or  subject  of  litigation,  though  their  interests 
may  be  seperate,  may  join  in  one  suit  for  equitable  relief, 
provided  their  interests  be  not  adverse  or  conflicting. 
.  .  .  .  And  several  judgment-creditors,  holding  different 
judgments,  may  unite  in  filing  a  creditors'  bill  to  reach 
the  equitable  interests  and  choses  in  action  of  the  debtor, 
or  to  obtain  the  aid  of  the  court  to  enforce  their  liens  at 
law."  ~  And  in  Powell  v.  Spaulding,3  the  principle  is 
laid  down  to  the  effect  that  "where  there  is  unity  in  inter- 
est, as  to  the  object  to  be  obtained  by  the  bill,  the  parties 
seeking  redress    in  chancery  may    join  in   the  same   COm- 


plaintiffs,  of  which  the  defendant 
del  it  i  >r,  or  those  win)  claim  under  him, 
have  any  right  to  complain.  The 
judgment-creditors  do  not  therehy 
inake  themselves  partners  with  the 
other  creditors,  or  claim  that  they 
have  a  joint  interest  in  the  cause  of 

action,  but  that,  as  creditors,  they 
are  separate  and  distinct,  having  an 
interest  iii  common  to  set  aside 
fraudulent  convej  ances  of  t  heir  com- 
mon debtor,  which  stand  in  the  way 
of  t  heir  being  paid,  according  to  their 
respective  priorities  "  Hut  compare 
Veaton  v.  Lenox,  8  Pet.  123;  Seaver 
v.  Bigelows,  5  Wall.  208.  Judgment- 
i-i  editors  cannot  thus  unite  in  an 
action  at  law.  Sage  v.  Mosher.  28 
Barb.  (N.  Y.)  288.  Compare  Carroll 
v.  Aldrich,  17  Vt.  569.  The  court  de- 
cided, in  Elmore  v.  Spear,  27  Ga.  196, 
that  where  a  creditor  proposed  to 
reach  legal  as  distinguished  from 
equitable  assets,  the  suit    technically 


was  not  a  creditor's  bill.  Hence  a 
single  creditor  was  held  to  he  entitled 
to  institute  a  suit  to  reach  legal  assets, 
and  if  he  thereby  gained  a  priority 
over  other  creditors  it  was  said  he 
could  retain  this  advantage,  and  was 
not  forced  to  divide  with  the  others, 
hut  was  entitled  to  the  control  of  his 
own  case,  and  could  not  be  required 
to  make  other  creditors  parties  to  his 

bill.      See  ii  54,  55.       Ill    States    where 

the  practice  prevails  that  a  bill  can  be 
brought  by  simple  contract-creditors, 
it  has  been  held  that  several  creditors 
can  join  in  one  suit.  Ruse  v.  Brom- 
berg,  88  Ala.  620,  7  So.  Rep.  384. 

'34  End.  401.  See  Hank  of  Rome 
v.  Haselton,  1."")  H.  J.  Lea(Tenn.)  216. 

-In  New  Jfork  a  motion  to  allow 
other  judgment-creditors  to  intervene 
is  discretionary  with  the  court  below. 
Whites  Bank  v.  Latching,  101  N.  Y. 
:;i».    1  N.  E.  Rep.  7:; I. 

3  3  Greene  (Iowa)  44:!,  461. 


§   108  JOINDER    OF   CI  >MPL  \l\  A\  I  S.  :\] 

plaint  and  maintain  their  action  together."1  In  Brinker- 
hoff  v.  Brown,-  Chancellor  Kent  ruled  that  different 
creditors  might  unite  in  one  bill,  the  object  of  which  was 
to  set  aside  a  fraudulent  conveyance  of  their  common 
debtor.  It  was  so  held  also  in  McDermutt  v.  Strong,8 
Edmeston  v.  Lyde,4  Conro  v.  Port  Henry  Iron  Co.,5 
Wall  v.  Fairley,6  and  Mebane  v.  Layton.7  And  where  a 
defendant  in  two  separate  bills,  brought  by  different 
judgment-creditors  to  reach  the  same  land,  files  one 
answer  to  both  bills,  it  seems  that  he  thereby  virtually 
consolidates  the  suits,  and  they  may  be  heard  together  as 
one  cause,  or  as  two  causes  under  one  style,  without 
entering  any  specific  order  of  consolidation.8  In  one  case 
a  sheriff,  and  the  judgment-creditor  under  whose  execution 
a  levy  had  been  made,  were  allowed  to  join  in  a  creditors' 
bill.0  Each,  it  was  said,  had  an  interest  in  preventing  a 
multiplicity  of  suits,  and  in  closing  the  matter  in  a  single 
.controversy;  their  interests  were  in  harmony,  and  in  no 
respect  conflicting,  and  hence  of  such  character  as  entitled 
them  to  unite   in   the   suit.10     There  is,  however,  no  obli- 


1  See  Strong  v.  Taylor  School  Town-  9  Adams  v.  Davidson,  LO  X.  V.  309, 
ship,  79  Ind.  208;  Cohen  v.  Wolff,  92  315,  where  the  court  said:  "  It  was 
Ga.  199,  17  S.  E.  Rep.  1029.  In  Ham-  also  objected  thai  the  plaintiffs 
lin  v.  Wright,  23  Wis.  494,  the  court  had  no  common  interest  in  the 
observed  that  "different  judgment-  recovery  that  entitled  them  to  file 
creditors  may  join  in  one  suit  against  their  bill  Bach  had  an  interest  in 
the  judgment-debtor  and  his  fraudu-  preventing  a  multiplicity  of  suits. 
lent  grantees,  though  the  interests  of  and  havingthis  whole  matter  closed 
the  latter  are  separate  and  distinct,  by  a  single  controversy.  It  could nol 
and  were  not  acquired  at  the  same  have  been  done  otherwise  than  by  the 
time.  The  object  of  such  a  suit  is  to  course  adopted  ;  their  interests  were 
reach  the  property  of  the  debtor."  in    harmony  with  each   other,    in  no 

2  6  Johns.  Ch.  (N.  Y.)  139.  respect  conflicting  and  were  such  as 
34  Johns.  Ch.  (N.  Y.)  687.  entitled  them  to  unite  in  this  suit." 
41  Paige  (N.  Y.)  637.  See  p  81. 

5 12  Barb.  (N.  Y.)  27.  I0  Compare    Bates    v.     Plonsky,   28 

673N.C.  464.  Bun  (N  .Y.)  112.     See  also    Dohertj 

'86  N.  C.  571.  v.  Holliday,    137    End.    382,   32    \.    I'.. 

8Rogers  v.  Dibiell,  6   Lea   (Tenn.)  Rep.   315,  36   Id.   907;    Armstrong  v. 

69.  Dunn,  143  End.  133,  41  N.  E.  Etep.  540. 


218 


fOINDER    OF   COMPLAINANTS. 


§  1 08 


Ration  upon   judgment-creditors  to  join.1      Creditors  by 
judgment    and   by   decree    may   unite    in   one    suit,2  but 

judgment-creditors  and  simple  contract-creditors    cannot 
join.3 

Where  one  party  is  a  creditor  by  judgment  and  another 
by  decree,  both  having  acquired  liens  upon  the  property 
of  their  debtor  which  entitle  them  to  similar  relief  against 
an  act  of  the  defendant,  which  is  a  common  injury,  they 
may  join  in  a  bill.4  The  general  theory  upon  which 
creditors  are  permitted  to  unite  as  complainants  is  that 
they  are  seeking  payment  of  their  judgments  out  of  a 
common  fund,  viz.,  the  property  of  the  debtor  ;  his  fraudu- 
lent conduct  with  reference  to  his  assets  affects  them  all, 
and  is  the  subject-matter  of  investigation.  A  receiver  is 
often  appointed  to  reach  and  take  possession  of  equitable 
interests  or  property  fraudulently  alienated,  and  as  he  can 
act  equally  well  for  the  different  creditors,  the  expense, 
delay,  and  confusion  incident  to  conducting  different 
suits  are  avoided.5     A  judgment-creditor  of   a  firm  who  is 


Existing  and  subsequent  creditors 
may  join  in  a  bill  to  sot  aside  a  con- 
veyance. O'Neil  v.  Birmingham  Brew- 
ing Co.,  101  Ala.  382,  13  So.  Rep.  .-,70. 
While's  Bank  of  Buffalo  v.  Farth- 
ing, 9  Civ.  Pro.  (N.  Y.)64. 

'-'  Brown  v.  Bates,   10  Ala.  432. 

Bauknight  v.  Sloan,  17  Fla.  284. 
4  ciarkson  v     De   Peyster,   :i   Paige 
N    Y.  I  320. 

See  Gates  v.  Boomer,  1 7  Wis.  455  ; 
Eamlin  v.  Wright,  23  Wis.  491  ;  Ruff- 
ing v.  Tilton,  12  tnd.  259;  Baker  v. 
Bartol,  0  Cal.  483;  Pierce  v.  Milwau- 
kee Construction  Co.,  38  Wis.  253; 
Dewej  >.    Mover,  72  N  Y.  71  ;  below,  (J 

I  Bin  (N.  V.i  170  ;  Bigby  v.  Ayres,  14 
Kan.  381  ,  Buckingham  v.  Walker, 
51  Miss.  194.     In  Smith  v.  Schulting, 

I I  Hun  i  N.  Y.)  54,  the  courl  says  : 
••  The  principal   issue  presented    by 


this  complaint  is  the  invalidity  of  the 
alleged  release.  It  is  manifest  by  the 
admissions  of  the  complaint  itself, 
that  unless  the  release  be  set  aside 
there  can  be  no  recovery  of  the  in- 
debtedness to  the  several  firms.  They 
have  a  cOQimon  interest,  therefore,  in 
this  principal  issue,  and  inasmuch  as 
the  release  is,  or  under  t he  allegations 
of  the  complaint  must  be  assumed  to 
be,  a  joint  one,  obtained  by  a  common 
fraud,  there  is  no  reason  why  all  the 
parties  tu  ii  may  not  unite  in  an  action 
brought  for  the  purpose  of  declaring 
it  void,  and  setting  it  aside  because  of 
a  common  fraud  practiced  upon  them 
in  obtaining  i(.  We  think  it  comes 
directly  within  the  principle  of  the 
ea>es  cited  by  appellant's  counsel, 
and  although  the  plaintiff s  were  un- 
connected parties  with  respect  to  the 


§  io8 


JOINDER    Of    COMP]    UNANTS. 


also  a  judgment-creditor  of  one  of  the  members  of  the 
firm,  may  sue  on  both  judgments  to  overturn  an  assign- 
ment.1 

Obviously,  hostile  claimants  cannot  join  in  any  form  of 
action,2  and  a  bill  is  demurrable  where  it  appears  that  one 
of  the  complainants  has  no  standing  in  court,  or  antago- 
nistic causes  of  action  are  set  forth,  or  the  relief  for 
which  the  complainants  respectively  pray  in  regard  to  a 
portion  of  the  property  sought  to  be  reached,  involves 
totally  distinct  questions  requiring  different  evidence  and 
leading  to  different  decrees. :i 


indebtedness  to  them,  they  may  join 
in  the  suit  because  there  was  one  con- 
nected interest  among  them  all  center- 
ing in  the  principal  point  in  issue." 
Citing  Binks  v.  Rokeby,  2  Madd.  234  ; 
Ward  v.  Northumberland,  2  Anstr. 
469,  477  ;  Whaley  v.  Dawson,  2  Sch. 
&  Lef .  3  70. 

1  Genesee  County  Bank  v.  Bank  of 
Batavia.  43  Hun  (N.  Y.)  295. 

2  See  Hubbell  v.  Lerch,  58  N.  Y. 
237  ;  St  John  v.  Pierce,  22  Barb.  (N. 
Y.)  362,  affi'd  in  Court  of  Appeals,  4 
Abb.  App.  Dec.  (N.  Y.)  140  ;  Sedg.  & 
Wait  on  Trial  of  Title  to  Land,  2d  ed., 
§188. 

3  Walker  v.  Powers,  1!)4  U.  S.  245. 
(  umpare  United  States  v.  Amer.  Bell 
Telephone  Co.,  128  U.  S.  352,  9  S.  C. 
Rep.  90;  Merriman  v.  Chicago,  etc.  R. 
R.  Co.,  64  Fed.  Rep.  550;  Emans  v. 
Emans,  14  N.  J.  Eq.  114  ;  Sawyer  v. 
Noble,  55  Me.  227.  The  creditor  may 
proceed  by  ancillary  proceedings  in 
any  other  court  of  concurrent  juris- 
diction with  the  court  rendering  the 
judgment,  to  remove  clouds  from  the 
titles  of  any  property  which  is  deemed 
to  be  subject  to  the  lien  of  the  judg- 
ment. Each  judgment  makes  a  sepa- 
rate cause  of  action.  Scottish-Ameri- 
can Mortgage  Co.    v.    Follansbee.    14 


Fed.  Rep.  125.  [n  Ostrander  v.  Weber, 
114  N.  Y.  101,  21  N.  E.  Rep.  112,  the 
court  says  :  "  The  complaint  Bets  forth 
these  several  subjects  of  equitable 
jurisdiction,  viz:  The  foreclosure  of 
chattel  mortgages.  (Briggs  v.  Oliver, 
68  N.  Y.  339;  Hart  v.  Ten  Eyck,  2 
Johns.  Ch.  99;  Thompson  \.  Van 
Vechten,  5  Duer.  624  ;  Dupuy  v. 
Gibson,  36  111.  200;  Charter  v. 
Stevens,  3  Denio,  33. )  The  determin- 
ation of  the  extent  and  priority 
of  various  and  conflicting  lien-,  be- 
tween creditors  under  chattel  morl 
gage  and  a  judgment-credjtor  under 
levy  by  execution  ;  a  multiplicity  of 
actions  between  such creditors(Super- 
visors  v.  Deyoe,  77  X.  Y.  219;  N.  Y.  >v 
N.  H.  H.  R.  Co.  v.  Schuyler,  17  N.  ^  . 
608)  and  the  advantage  of  a  sale  ■  •! 
property  suitable,  used  and  adapted 
to  a  particular  business,  in  lump,  and 
not  in  separate  parcels,  1<>  the  end 
that  the  greatest  sum  may  lie  realized 
for  the  benefit  of  all  the  creditors. 
(Prentice  v.  Janssen,  79N.  V.  L79  490 
Every  one  of  these  subjects  bus  been 
held  sufficient  to  maintain  an  action 
inequity.  Their  combination  in  one 
complaint  should  not  !»■  held  i"  de- 
feat an  equity  action.'" 


220  SUING    ON    BEHALF   OF   OTHERS.  §  109 

g  109.  Suing  on  behalf  of  others.  —  Mr.  Pomeroy  says  : l 
••  I  >ne  creditor  may  sue  on  behalf  of  all  the  other  credit- 
ors in  an  action  to  enforce  the  terms  of  an  assignment 
in  trust  for  the  benefit  of  creditors,  to  obtain  an  account- 
ing and  settlement  from  the  assignee,  and  other  like 
relief;  also,  in  an  action  to  set  aside  such  an  assignment  on 
the  ground  that  it  is  illegal  and  void;  and  also  one  judg- 
ment-creditor may  sue  on  behalf  of  all  other  similar 
creditors  in  an  action  to  reach  the  equitable  assets,  and 
to  set  aside  the  fraudulent  transfers  of  the  debtor.  In 
all  these  classes  of  cases  the  creditors  have  a  common 
interest  in  the  questions  to  be  determined  by  the  contro- 
versy.2 The  complainant  may  sue  alone  or  with  other 
judgment-creditors.3  It  is  remarked  by  Nelson,  J.,  in 
Myers  v.  Fenn,4  that  "  the  practice  of  permitting  judg- 
ment-creditors to  come  in  and  make  themselves  parties 
to  the  bill,  and  thereby  obtain  the  benefit,  assuming  at 
the  same  time  their  portion  of  the  costs  and  expenses  of 
the  litigation,  is  well  settled  ; " 5  but  this  intention  must 
be  manifested  by  suitable  averments  in  the  bill  ;6  and  the 
creditor  so  applying  must  not  have  been  guilty  of  laches ; 7 
and  if,  after  a  finding  of  a  court  annulling  a  fraudulent 
preference,  other  creditors  seek  to  come  in  as  co-com- 
plainants, they  may  be  allowed  to  do  so,  but  their  de- 
mands will  be  postponed  in    favor    of  the   original   com- 


1  Pomeroy's  Remedies  &   Remedial  4  111.  203;  Terry  v.  Calnan,  4  S.  C. 

Rights,  ;  394     See  Pfohl  v.  Simpson,  508. 

74  X.  Y.  137.  Marsh    v.   Burroughs,   1   Woods, 

Greene  v.  Breck,  10   Abb.  Pr.  467,  and  cases  cited. 

(N.     Y        12;     Brooks     v.     Pock,    38  » 5  Wall.  207. 

Barb.  (N.  Y.)  519;  Innes  v.  Lansing,  7  B  Compare  strike  v.  McDonald,   2 

Paige  (N.  ST.)  583;Conro  v.  Port  Eenry  1 1 .  &  < ! .  (Md.)  192  ;  Shand  v.  Hanley, 

Iron  Co.,  12  Barb.  (N.Y.)  59;  Hammond  TIN.  Y.  324:    Barry  v.    Abbot,    100 

-.    Budson  River  I.  &  M.  Co.,  20  Barb.  Mass.  396;  Neely  v.  Jones,  16  W.Va. 

(N.   Y)   878 :  I  Ihewetl    \     Moran,    17  625. 

Fed.  Rep.  820;  Ponsford  v.    Bartley,  '  Burl  v.  Eeyes,  1  Flipp,  72. 

2  Johns.  &  II.  736;  Ballentine  v.  Beall,  '  See  Flash  v.   Wilkereon,  22  Fed. 

Rep.  689. 


§  I  IO  "AND    OTHERS."  22] 

plainant.1  Where  an  action  is  brought  in  aid  of  an 
assignment  to  subject  to  it  property  fraudulently  diverted, 
it  can  be  prosecuted  by  any  creditor  whether  he  has 
obtained  a  judgment  or  not." 

Stockholders  may  sue  in  the  right  of  the  corporation 
where  the  latter  refuses  to  proceed  ; :?  but  where  there  is 
unreasonable  delay  in  bringing  the  suit,  the  cause  of  action 
may  be  defeated  by  the  application  of  the  doctrine  of 
equitable  estoppel.4  "  Where  one  incurs  expense  in 
rescuing  property  belonging  to  many,  a  court  of  equity 
has  power  unquestionably  to  direct  that  the  expenses  so 
incurred  shall  be  paid  from  the  common  fund."1 

§  no.  "And  others." —  It  is  a  mistake  to  suppose  that  the 
statute  of  Elizabeth  only  avoids  deeds  and  conveyan. 
coming  within  its  exact  provisions  as  to  creditors.  The 
statute  is  much  broader  in  its  operation.'5  It  enacts  that 
every  conveyance  made  to  the  end,  purpose  and  intent  to 
delay,  hinder,  or  defraud  creditors  and  others  of  their  just 
and  lawful  actions,  etc.,  shall  be  void.  "  It  extends  not 
only  to  creditors,  but  to  all  others  who  have  cause  of  action 
or  suit,  or  any  penalty  or  forfeiture  ;  "  and,  as  elsewhere 
shown,  embraces  claims  for  slander,  trespass,  and  other 
torts.7  The  claimant  may  not  come  within  a  sharply 
defined    meaning   of   the   word    "creditor,"    but    he    may 


1  Smith  v.  Craft,  11  Biss.  340.  Merwin   v.  Richardson,    52  Conn. 

-  Spelman  v.  Freedman,  130  N.  Y.  223,  237. 

421,  29  N!    E.   Rep.   765;    Maass   v.  6See  §  16.    Tyler  v.   Tyler,  136  Dl. 

Falk,  146  N.  Y.  34,  40  N.  E.  Rep.  504;  536,  21  N.  E.  Rep.  616. 

Abegg  v.  Bishop,   142  N.  Y.    286,  36  ' Gebhart   v.    Merfeld,   51    Md.  325. 

N.  E.  Rep.  1058.  See  Cooke  v.  Cooke,  43  Md. 523  ; 

'Taylor  v.    Holmes,   127   U.  S.  492,  ton  v.  "Wheaton,  1    Am.   Lea.  Cas.  42, 

8  S.  C.  Rep.  1192 ;  Ha wes  v.  Oakland,  notes;  Jackson    v.    Myers,   L8  Johns 

104  U.  S.  450;  Greaves  v.   Gouge,  69  (N.  Y.)  425;  Lillanl  v.  McGee,  4  Bibb. 

N.  Y.  157;  Wait  on  Insolvent  Corps.  (Ky.)  165;  Lowry  v.  Pinson,  2  Bailey's 

§  74.  (S.  C.)  Law.  324,  328,  and  other  i 

"  4  Sheldon     Hat     Blocking    Co.    v.  there  cited  ;  McKenna  v.  Crowley,  16 

Eickemeyer    Hat   Blocking  Machine  K.  I.  366,  17  AH.  Rep.  354. 
Co.,  90  N.  Y.  607. 


SURETY 


§  III 


maintain  his  standing  "  in  the  equity  of  creditors."  '  So  in 
Feigley  v.  Feigley,2  the  court  say:  "The  statute  seems 
to  design  to  embrace  others  than  those  who  are  strictly 
and  technically  creditors  ;  and  if,  under  such  a  compre- 
hensive clause  as  'creditors  and  others,'  a  wife,  who  has 
been  made  the  victim  of  her  husband's  fraud,  is  not  to  be 
included,  we  are  at  a  loss  to  ascertain  to  whom  else  it  was 
designed  to  relate."3  Then  the  principle  that  a  volun- 
tary post-nuptial  settlement  made  by  a  person  indebted  is 
prima  facie  fraudulent,  as  to  creditors,  applies  as  well  in 
behalf  of  the  representatives  of  a  deceased  partner  as  of 
general  creditors;4  and  a  partner  who  liquidates  firm 
judgments  stands  in  the  position  of  a  creditor  with  regard 
to  fraudulent  alienations  of  his  co-partner.5 

§  in.  Surety. —  Sureties  on  an  appeal  bond  may  be  sub- 
rogated to  the  rights  of  the  judgment-creditor,  to  bring  a 
creditor's    action    to    set   aside    fraudulent   deeds0   even 


1  Shontz  v.  Brown,  87  Pa.  St.  131. 
7  Md.  561. 

Welde  v.  Scotten,  59  Md.  72. 

Conveyance  to  defeat  alimony. —  In 
Bailey  v.  Bailey,  61  Me.  363,  the  court 
very  properly  ruled  that  if  an  estate 
was  conveyed  to  prevent  the  enforce- 
ment of  a  decree  awarding  alimony, 
or  other  proper  aid,  such  conveyance 
waH  fraudulenl  as  to  the  wife  and 
mighl  I"-  avoided.  It  was  contended 
on  tin-  part  of  the  husband  that  a 
person  in  the  situation  of  the  wife 
could  not  he  regarded  as  a  creditor  so 
a-  to  .Mine  within  the  statutes  of 
Elizabeth  relating  to  fraudulenl  con- 
veyances. The  courl  derided,  how- 
ever, that  t  be  statute  covered  creditore 
mul  others,  ami  cited  Livermore  v. 
Boutelle,  1 1  Gray  |  Mass.  31 ;.  a  simi- 
lar case,  in  which  the  courl  said  :  "  If 
-he  was   not    a   creditor   she    wae   of 

the     other-     whose     JUSI     and    lawful 


actions,  suits,  and  reliefs  would  be 
delayed,  hindered,  or  defeated  by  such 
conveyance."  See  Green  v.  Adams, 
59  Vt.  602,  10  Atl.  Rep.  742  ;  Foster  v. 
Foster.  56  Vt.  546  :  Burrows  v.  Purple, 
107  Mass.  428;  Morrison  v.  Morrison. 
49  N.  H.  69;  Seott  v.  Magloughlin, 
133  111.  :i(i,  24  N.  E.  Rep.  1030.  In 
Tyler  v.  Tyler,  126  111.  536,  21  N.  E. 
Rep.  616,  the  court  says  :  "If  the  wife 
be  not,  technically,  a  'creditor.'  she 
surely  conies  within  the  language 
'  ot  lnr  persons,'  and  she  is,  obviously, 
as  much  injured  by  Buch  ;i  convey- 
ance as  any  creditor  can  he."  This 
language  was  used  in    a  case  wheie  a 

busband  conveyed  property  to  defeat 
a  claim  for  maintenance. 

Alston  v.  Kowles,  13  Fla.  118. 

Swan  v.  Smith,  57  Miss    548. 

S,e  Lewis  v.  Palmer,  28  N.  Y.  271  : 
Hinckley  v.  Kreitz,  58  N.  Y.  590. 


I  12 


I  \  ECUTORS    AND    A.DMINISTRA1  i 


though  the  principal  informed  the  sureties  of  the  fraud 
before  they  became  bound.1  Sureties  may  enforce  their 
rights  in  the  creditor's  name  if  their  interests  require  it,:; 
for  "a  surety  who  pays  a  debt  for  his  principal  is  entitled 
to  be  put  in  the  place  of  the  creditor,  and  to  all  the  means 
which  the  creditor  possessed  to  enforce  payment  against 
the  principal  debtor.""  It  maybe  here  recalled  that  a 
surety  is  a  creditor  of  the  principal  obligor,  and  of  his 
co-sureties  from  the  time  the  obligation  is  entered  into,1 
and  that  a  conveyance  by  a  surety  for  inadequate  con- 
sideration to  defeat  a  contemplated  liability  for  contribu- 
tion to  a  co-surety  will  be  set  aside."'  A  person  who  pays 
a  debt  as  security  for  a  firm  becomes  a  creditor  of  the 
firm,  and  is  not  entitled  to  any  greater  rights  than  simple 
contract  creditors.6 


§  112.  Executors  and  administrators.  —  Ordinarily  an 
executor  or  administrator  will  not  be  allowed  to  impeach 
the  fraudulent  conveyance  of  his  testator  or  intestate. 
Like  the  heirs,  he  is  bound  by   the  acts  of  the  deceased.7 


1  Martin  v.  Walker,  12  Hun  (N.  Y.) 
53. 

2Townsend  v.  Whitney,  75  N.  Y. 
425  ;  affi'g  15  Hun  (N.  Y.)  93.  Com- 
pare Cuyler  v.  Ensworth,  6  Paige  (N. 
Y.)  32  ;  Speiglemyer  v.  Crawford,  6 
Paige  (N.  Y.)  254. 

3  Lewis  v  Palmer,  28  N.  Y.  271. 
See  Wads  worth  v.  Lyon,  93  N.  Y. 
214  ;  Shutts  v.  Fingar,  100  N.  Y.  543, 
3  N.  E.  Rep.  588. 

4  Pennington  v.  Seal,  49  Miss.  525  : 
Williams  v.  Banks,  11  Md.  242  ;  Sex- 
ton v.  Wheaton,  1  Am.  Lea,  Cas.  37  : 
Rider  v.  Kidder.  10  Ves.  360.  See 
§90. 

5  Pashby  v.  Mandigo,  42   Midi.  172. 

6  McConnel  v.  Dickson.  43  111.  99. 
Chief -Justice  Thurman  said,  in  a  case 
in  Ohio:  "A  surety  against  whom 
judgment   lias   been    rendered,    may, 


without  making  payment  himself, 
proceed,  inequity  against  his  princi- 
pal, to  subject  the  estate  of  the  latter 
to  tlie  paymentof  thedebt."  Hale  v. 
Wetmore,  4  Ohio  St.  600.  See  Mc- 
Connel] v.  Scott,  15  Ohio.  101  ;  Borsey 
v.  Heath,  5  Ohio,  354;  Stump  v. 
Rogers,  1  Ohio,  533. 

1  Blake  v.  Blake.  53  Miss.  193: 
Merry  v.  Fremon,  11  Mo.  522  ;  /.<>ll  \. 
Soper.  75  Mo.  462  ;  Davis  v.  Swanson, 
54  Ala.  277;  George  V.Williamson,  26 
Mo.  11)0;  Loomis  v.  Tillt.  16  Barb.  (N. 
Y.  )  545  ;  Van  Wickle  v.  Calvin.  2:'. 
La.  Ann.  205  :  Chofceau  v.  Jones,  1 1 
111.  319;  Snodgrass  v.  Andrews,  80 
.Miss.  472  ;  Peaslee  \ .  Barnaj ,  1  D. 
Chip.  ( Yt.)  331  :  Bawes  v.  Loader, 
Y'elv.  196;  Livingston  v.  Livingston, 
3  Johns.  Ch.  (N.  Y.)  L48 ;  Estes  v. 
Eowland,    15  R.    I.    128 ;    Burton    v. 


224  EXEC1    rORS     WI»    ADMINISTRATORS.  §112 

••  As  a  party  to  a  fraudulent  conveyance  cannot  allege 
its  illegality,  with  a  view  to  its  avoidance,  so  neither  can 
his  heirs  nor  representatives  coming  in  as  volunteers, 
and  standing,  as  it  were,  in  his  shoes."1  This  language 
is  employed  in  Rhode  Island  :  "  If  the  deceased  has 
conveyed  his  estates  away  in  fraud  of  his  creditors,  the 
creditors  who  have  been  defrauded  are  the  proper  parties 
to  prosecute  the  remedy."2  Statutory  changes  sup- 
ported by  the  tendency  of  the  courts  to  prevent  the 
confusion  incident  to  splitting,  up  the  administration  of 
estates  between  creditors  and  personal  representatives, 
have  led  to  the  general  establishment  of  the  practice  of 
permitting  and  imposing  the  duty  upon  executors  and 
administrators  to  sue  for  property  fraudulently  alienated 
by  the  deceased  in  his  lifetime.3  Thus  in  New  York, 
executors  and  administrators,  who  could  not  formerly 
effectually  impeach  the  conveyances  of  the  deceased 
on  the  ground  that  the  same  were  made  in  fraud  of  cred- 


Farinholt,  8G  X.  C.  260.     An  excep-  Knight  v.   Morgan,   2  Barb.    (X.  Y.) 

t i< xi  is  often  recognized  to  exist  inde-  171;   Morris   v.    Morris,   5   Mich.  171; 

pendent  of  statute  where  the  estate  is  McLane  v.  Johnson,  43  Vt.  48  ;  Parker 

insolvent.      Clark    v.   Clough.    65   X.  v.  Flagg,  127  Mass.  30  ;  Bonslough  v. 

1 1    43,  23  Atl.  Rep.  526.  Bonslough,  68  Pa.  St.  495  ;  Bushnell  v. 

■McLaughlin     v.    McLaughlin,     16  Bushnell,  88  Ind.  403  ;  Cross  v.  Brown, 

Mo.  342.      See   Hall  v.  Callahan,    66  51  N.  H.  486;  also  note  to  Ewing  v. 

Mo.  316  ;  Beebe  v.  Saulter,  S7  111.518:  Handley,  14  Am.  Dec.  157;  Barton  v. 

<  Irawford  v.  Lehr,  20  Kan.  509  ;  Rhem  Hosner,  24  Hun  (X.  Y.)  468  ;  Johnson 

v.  Tull.  13   [red.   Law  (X.    C.)  57.     It  v.   Jones,    79   Ind.    141;    Holland    v. 

has    been    held    in    New  York,    thai    a  Cruft,  20  Pick.  (Mass.)  321  ;   Martin  v. 

surrogate  had  no  jurisdiction  to  deter-  Bolton,  75  Ind.   295;   German   Bank 

mine  the  validity  of  such  a  transfer,  v.  Leyser,  50   Wis.  258,  6  N.  W.   Rep. 

Richardson   v.    Root,  19  Hun  (X.  Y.)  800;  Garner  v.   Graves,  51   Ind.  188; 

17.;;    Barton    v.    Hosner,  24   Hun  iX.  Forde  v.   Exempt    Fire  Co.,  50  Cal. 

Y.  i  168.  200  ;  Norton  v.  Norton,  5<  lush.  (Mass.) 

>.  Howland,  15   R.  I.  129,  23  524:    Sullice    v.    Gradenigo,    15    La. 

Ail.  Rep.  624.  Ann.  582  ;   note  to  Hudnal  v.  Wilder, 

Martin  v.  Root,  18    Mass.  222:  17  Am.   Dec    T44,   4  McCord's   S.  < !. 

Welsh  v.  Welsh,  105  Mass.  229;  Gib-  Law,  294;    Bassetl    v.    McKenna,  52 

boh   \.  Crehore,  5   Pick.  (Mass)  L54  ;  Conn.  437. 
Hills  \.   Sherwood,    18  <  !al.  392  .  Mc- 


§112 


EXECUT<  >kS    AND     ^DMINIS  fRATO 


itors,  are  now  enabled  to  do  so  by  statute.1  This  new 
remedy,  however,  is  not  exclusive.  Formerly  in  that 
State  a  creditor  could  bring  an  action  only  when  the  per- 
sonal representative  was  in  collusion  with  the  fraudulent 
vendee,  against  the  personal  representative  and  vendee 
to  have  the  covinous  transfer  set  aside,  and  the  property 
applied  as  assets,2  but  by  recent  legislation  8  the  right  to 
sue  is  extended,  and  it  is  not  necessary  that  the  plaintiff 
should  reduce  his  claim  to  judgment.  The  action  must 
be  brought  on  behalf  of  himself  and  other  creditors,  bul 
the  absence  of  such  allegation  is  waived  if  not  taken 
by    demurrer     or    answer.4        In     Wisconsin     the     cred- 


'N.  Y  Laws,  1889,  ch.  487.  See 
Moseley  v.  Moseley,  15  N.  Y.  336 ; 
Bate  v.  Graham,  11  N.  Y.  237  ;  Barton 
v.  Hosner,  24  Hun  (N.  Y.)  469;  Bry- 
ant v.  Bryant,  2  Rob.  (N.  Y.)  612: 
Southard  v.  Benner,  72  N.  Y.  427  ; 
Mc Knight  v.  Morgan,  2  Barb.  (N.  Yr.) 
17!  ;  Lore  v.  Dierkes,  19  J.  &.  S. 
(N.  Y.)  144.  National  Bank  of  West 
Troy  v.  Levy,  127  N.  Y.  549  ;  Lichten- 
berg  v.  Hartf elder.  103  N.  Y.  302. 
Where  the  deed  was  not  delivered 
till  after  the  death  of  the  testa- 
tor his  executor  can  bring  no 
action  to  set  it  aside.  Rosseau  v. 
Bleau.  131  N.  Y.  177,  30  N.  E  Rep. 
52  :  Putney  v.  Fletcher,  148  Mass.  247, 
19  N.  E.  Rep.  370.  In  Massachusetts 
the  remedy  is  exclusive.  The  same 
rule  applies  in  Indiana.  Ind.  R.  S. 
1881.  £2333.  SeeGalentine  v.  Wood, 
137  Ind.  532.  35  N.  E.  Rep.  901. 

2  See  Phelps  v.  Piatt,  50  Barb.  (X. 
Y.)  430  ;  Sharpe  v.  Freeman,  45  N.  Y. 
802;  Bate  v.  Graham,  11  N.  Y.  237  ; 
Barton  v.  Hosner,  24  Hun  (N.  Y.)  468. 
See  §§  114.  115. 

:;N.  Y.  Laws,  1889,  ch.  487.  In 
National  Bank  v.  Levy,  127  N.  Y.  551, 
the  court  says:  "The  plaintiff  as  a 
creditor,  on  the  refusal  of  the  admin- 

i5 


istrator  to  bring  the  action,  was  al 
liberty  as  it  did  to  do  so,  making  her 
a  party  defendant  with  a  view  to  the 
same  equitable  relief  which  ma\  have 

been   awarded    if   she   had    I n    the 

party  plaintiff.  (Bate  v.  Graham,  11 
N.  Y.  237;  Greaves  v.  Gouge,  69  N. 
Y.  154  ;  Grouse  v.  Frothingham,  97  N. 
Y.  105)." 

4  Brown  v.  Brown,  83  Hun  |  X.  Y.  i 
162,31  N.  Y.  Supp.  650;  Nat.  Trades 
men's  Bank  v.  Wet  more,  124  N.  Y. 
241,  26  N.  E.  Rep.  248.  Tn  Prenl 
Bowden.  145  N.  Y.  342,  10  N.  E  Rep. 
13,  Finch,  J.,  says:  "Our  whole 
theory  of  administration  rests  upon 
the  idea  that  when  a  man  dies  his 
estate  shall  answer  to  Ids  creditors 
equally  and  without  preference,  and 
the  surrogate  is  purposely  mad.'  mas. 
ter  of  the  situation  to  prevenl  in- 
equality of  payment.  This  plaintiff 
could  undoubtedly  have  maintained 
an  action  for  the  benefil  of  all  the 
creditors,  alter  refusal  of  the  repre- 
sentatives, to  se1  Hds  conveyance 
aside,  bu1  instead  of  thai  she 
ing,  by  an  ordinary  creditor's  action, 
to  secure  payment  of  her  own  debt, 
regardless  of  what  may  happen  to 
others." 


226  EXEC!    rORS    AND    ADMINISTRATORS.  §  112 

itor  may,  in  a  proper  case,  'compel  the  executor  or 
administrator  to  bring  the  action,  or  bring  it  him- 
self.1 In  Pennsylvania  it  is  said  that  the  admin- 
istrator's intervention  would  not  seem  to  be  neces- 
sary if  the  creditors  prefer  to  proceed  for  themselves.3 
In  Wisconsin  the  insufficiency  of  the  estate  to  pay  debts 
must  first  be  ascertained  by  the  county  court.3  This  pre- 
requisite of  a  formal  establishment  of  the  debt  as  already 
shown4  is  not  now  universally  conceded  to  be  essential. 
The  Supreme  Court  of  the  United  States  asserts''  that 
the  authorities  are  abundant  and  well  settled,  that  a 
creditor  of  a  deceased  person  has  a  right  to  go  into  a 
court  of  equity  for  the  discovery  of  assets,  and  to  secure 
the  payment  of  the  debt ;  and  the  creditor,  when  there, 
would  not  be  turned  back  to  a  court  of  law  to  establish 
his  debt.  The  court  being  in  rightful  possession  of  the 
cause  for  a  discovery  and  account,  will  proceed  to  a  final 
decree  upon  all  the  merits.0  So  debts  which  are  made 
by  statute  a  lien  upon  lands  of  a  deceased  debtor,  will 
furnish  a  creditor  at  large,  the  correctness  of  whose 
claim  is  acknowledged  by  the  executor,  a  standing  in 
court  to  file  a  creditors'  bill  to  set  aside  conveyances 
alleged  to  have  been  made  bv  the  testator  in  fraud  of 
creditors.7  In  California  the  rule  is  recognized  that  a 
creditor  may  bring  the  action,  if  the  executor  refuses,  and 
that  no  request  is  necessary  where  the  executor  is  also 
the  alleged  fraudulent  grantee.8        The    action    can    only 


'German   Bank  v,  Leyser,  50   Wis.  S.  165,  IIS.  C.  Rep.  525,  dissenting 

6  V  W.  Rep.  809.    See  Andrew  opinion  of  Brown,  J, 

\.  Hinderman,  71  Wis.  lis,  :;r,  x.  w.  'Thompson     v.    Brown,  4   Johns. 

Rep  824.     '  Ch.  (N.  Y.)  619.     See  ?  Tit. 

Appeal   of  Fowler,  sr  pa.  si    154.  'Haston   v.  Castner,  31    X.  J.  Eq. 

German   Bank   v.  Leyser,  50  Wis.  697,  and  cases  cited.      Sec  Jones  v. 

BN.  W.  Rep.   809  Davenport,  UN.    J.    Eq.   34,  13  Atl. 

79.  Rep.  652.     See  §87. 

Kennedy   v.   Creawell,   101    U.S.  'Emmons   \.  Barton,  109  Cal.  062, 

645.     See  Johnson  \     Powers,  189  U.  12  Pac.  Rep.  303. 


£   I  13  EXECUTORS     VND   ADMINISTRATE  >RS.  2  2J 

be  brought  by  the  executor  where  there  is  an  insufficiency 
of  assets  in  his  hands.1 

The  creditor's  bill  in  Kennedy  v.  Creswell 2  was  filed 
against  an  executor  and  devisees,  and  alleged  that  the 
complainant  held  the  testator's  notes  for  $1,2,000;  and 
recited  that  the  personal  assets  were  insufficient  to 
meet  the  debts,  and  that  the  executor  was  paying  some 
of  the  claims  in  full,  and  leaving  others  unsatisfied.  The 
creditors  prayed  for  an  accounting  of  the  personal 
estate,  a  discovery  of  the  real  estate,  and  an  application 
of  all  the  property  to  the  payment  of  the  debts.  A 
plea  was  interposed  setting  forth  that  the  executor  had 
assets  sufficient  to  pay  the  complainant  and  all  other 
creditors.  A  replication  was  filed  and  proofs  taken, 
which  sustained  the  allegations  of  the  bill,  and  demon- 
strated the  falsity  of  the  plea.  The  court  decided  that 
the  complainant  was  entitled  to  a  decree  pro  confcsso':' 
and  the  defendant  could  not  claim  the  right  to  answer 
after  interposing  a  false  plea  ;  that  the  admission  of  the 
executor  that  he  had  assets,  could  "be  taken  against 
him  for  the  purpose  of  charging  him  with  a  liability,"  but 
it  could  not  "serve  him  as  evidence  to  prove  the  truth 
of  his  plea." 

§  U3- — The  personal  representative  may  render  himself 
individually  liable  to  creditors  for  a  failure  to  recover  prop- 
erty fraudulently  alienated   by  the   testator  or  intestate,4 


'Field  v.  Andrada,    106    Cal.  107,  Smith,  4  Texas,  411.     See  Sawyer  v. 

39  Pac.   Rep.   323;  Smith  v.  N.   Y.  Thayer,  70  Me    340;  O'Connor  v .  Gif- 

Life  Ins.  Co.,  57  Fed.   Rep.  133;  to  ford,   117  N .  Y.   275,   22  N.    E.    Rep. 

same    effect,  McCall    v.    Pixley.    48  1036.     In  Matter  of  Hart,  60  Hun  (N 

Ohio  St.  379,  27  N.  E.  Rep.  887.  Y.)516,  L5  X.  V.  Sup,..  239,  the  courl 

2 101    U.  S.  641.      See   Johnson  v.  say:      "It  appeared    thai    Archibald 

Powers.  139  U.  S.  156.  Johnston,  who  died  in  August, 

3  See  Dows  v.  McMichael,    2  Paige  was  for  years  prior  to  his  decease  insol- 
(N.  Y.)  345.  vent,  and  thai  the  administrators  had 

4  Lee  v.  Chase,  58  Me .  436  ;  Cross  v .  knowledge  of  his  insolvency .     H  fur 
Brown,   51   N.    H.   488;    Danzey    v.  ther  appeared  that  in  1886,  for  a  nom- 


!28 


1  XEi  UTORS    AND    ADMINISTRATORS. 


113 


and  he  should  include  such  property  in  the  inventory,1 
unless,  of  course,  he  has  no  knowledge  of  it.2  The  per- 
sonal representative,  as  he  stands  for  creditors  when  so  act- 
ing, can  only  attack  fraudulent  transfers  in  cases  where  the 
estate  is  insolvent,'5  and  with  a  view  to  recover  a  sum  suffi- 
cient to  satisfy  the  creditors.  The  complaint  should  allege 
that  the  action  is  instituted  for  the  benefit  of  creditors.4 
The  legislation  clothing  personal  representatives  with  the 
power  to  appeal  to  the  courts  to  annul  covinous  alienations 
made  by  the  deceased  is  often  highly  salutary  in  practice. 
The  concurrent  right  of  the  creditor  to  seek  redress  is  mani- 
festly of  the  utmost  importance,  for  the  personal  repre- 
sentative is  usually  selected  by,  or  is  a  near  relative  of,  the 
deceased  and  may,  in  some  cases,  be  prompted  by  motives 
of  friendship  or  self-interest  to  shield  the  parties  who  have 
depleted  the  estate;  and,  in  some  instances,  is  himself  the 
fraudulent  alienee.  Where  the  personal  representatives 
sue.  a  multiplicity  of  suits  is  prevented  in  cases  where  the 
creditors  are  numerous  and  the  necessity  of  a  judgment 


inal  consideration,  he  conveyed  to  one 
Harris  an  interest  in  this  leasehold 
estate,  w  hich  I  [arris  upon  the  same 
day  conveyed  to  tin'  wife  of  said 
Johnston  I'm-  a  like  consideration. 
Johnston  being  insolvent  at  the  time 
of  this  conveyance,  the  same  was  a 
fraud  upon  his  creditors  if  tin1  Lease 
was  of  any  value  whatever  ;  and  it 
would  appear  from  the  transactions 
had  by  the  administrators,  in  respeel 
to  other  interests  in  this  [ease,  thai  it 
was  valuable.  I  rnder  these  circum- 
stances it  certainlj  was  the  duty  of 
the  administrators  to  take  proceed- 
to  recover  this  property  which 
Johnston  had  disposed  of  in  fraud  <>f 
his  creditors.  This  the  administra- 
tors, with  full  knowledge  of  these 
facts,  failed  to  do,  and  it  seems  to  us 


that  they  arc  chargeable  with  neglect 
of  duty." 

'Minor  v.  Mead,  3  Conn.  289  ; 
Bourne  v.  Stevenson,  58  Me.  504; 
Booth  v.  Patrick,  8  Conn.  106;  And- 
russ  v.  Doolittle,  11  Conn.  283. 

Booth  v.  Patrick,  8  Conn.  Kit;. 
In  Alabama  au administrator  hassuch 
a  right  to  the  lands  of  his  intestate  as 
will  enable  him  to  maintain  a  hill  in 
equity  for  the  cancellation  of  a  con- 
veyance of  the  lands  obtained  by 
fraud,  provided  the  heirs  are  made 
parties.  Waddell  v.  Lanier,  62  Ala. 
347. 

I!,-,,  v  Hess,  lit  Ind.  2:5s;  Pringle 
\  .  Pringle,  ."Hi  Pa.  St.  281  ;  Wall  v. 
Provident  Inst.,  :J  Allen  (Mass  I  '.m. 

1  (  rocker  v.  Craig,  46  Me.  327. 


§H4 


ASSIGNEE    l\    BANKRUPTCY  . 


or  execution  is  avoided,1    features   important  to   the  body 
of  creditors.3 

£114.  Assignee  in  bankruptcy.  —  An  assignee  in  bank- 
ruptcy, under  the  late  bankrupt  act,  represented  the  whole 
body  of  creditors,  and  could  in  their  behalf  impeach,  as 
fraudulent,  a  conveyance  of  property  by  the  bankrupt, 
whenever  the  creditors  might,  by  any  process,  acquire  the 
right  to  contest  its  validity.  This  rule  is  of  quite  general 
application.3  It  is  said,  however,  in  the  New  York  Court 
of  Appeals,4  that,  ''if  the  assignee  should  refuse  or  neg- 
lect to  sue  for  and  reclaim  property  fraudulently  trans- 
ferred, it  is  abundantly  established  that  the  creditors  may 
commence  an  action  to  reach  the  property,  making  the 
assignee,  the  debtor,  and  his  transferees  parties  defendant. 
And,  in  such  an  action,  the  property  will  be  administered 
directly  for  the  benefit  of  the  creditors."5  It  is  believed, 
however,  that  it   is  impossible   to   reconcile    this  doctrine 


1  Barton  v.  Hosner,  24   Hun  (N.  Y.) 
471. 

*  Fletcher  v.  Holmes,  40  Me.  364. 

tin  re  Collins,  6  Fed.  Cases,  114; 
Foster  v.  Hackley,  9  Fed.  Cases,  545  ; 
Southard  v.  Benner,  72  N.  Y.  427  : 
Piatt  v.  Mead,  7  Fed.  Rep.  95;  Butcher 
v.  Harrison,  4  Barn.  &  Adol.  129  ; 
Brackett  v.  Harvey,  25  Hun  (N.  Y.) 
503  ;  Nicholas  v.  Murray,  5  Sawyer, 
320;  Trimble  v.  Woodhead,  102  U.  S. 
047:  Bates  v.  Bradley,  24  Hun  (N.  Y.) 
84;  Doed  Grimsby  v.  Ball,  11  M.  & 
W.  531;  Moyer  v.  Dewey,  103  IT.  S. 
301  ;  Ball  v.  Slafter,  20  Hun  (N.  Y.) 
354;  Phelps  v.  McDonald,  99  CJ.  S. 
298;  Glenny  v.  Langdon,  98  I".  S.  28; 
Shackleford  v.  Collier,  6  Bush  (Ky.) 
149  ;  Badger  v.  Story,  16  N.  H.  168  ; 
Day  v.  Cooley,  118  Mass.  527  :  Wads- 
worth  v.  Williams,  100  Mass.  126. 
The  adjudication  exempted  the  debt- 
or's property  from  attachment.  W  i  I 
liams  v.Merritt,  103  Mass.  184.     As  to 


when  an  assignee  in  bankruptcy  can- 
not overturn  a  fraudulent  convey- 
ance, see  Warren  v.  M ly,  122  U.S. 

132,  7  S.  C.  Rep.  1063. 

4  Dewey  v.  Moyer,  72  X.  Y.  78; 
Crouse  v.  Frothingham,  97  X  Y.  106; 
Harvey  v.  McDonnell,  113  X.  Y.  531, 
21  N.  E.  Rep.  695;  Spelman  v.  Freed- 
man,  130  X.  Y.  V21,  29  X.  E.  Rep.  765. 

■•  Citing  Sands  v.  ( lodwise,  2  Johns. 
iX  Y.)  481  ;  Freeman  v.  Deming,  3 
Sandf.  Cli.  (X.  Y.)  327  ;  Seaman  v. 
Stoughton,  3  Barb.  Ch.  (N.  Y.)  344  ; 
Fori  Stanwix  Bank  \ .  Leggett,  51  X. 
V.  552  :  Card  v.  Walbridge,  18  Ohio, 
41!  ;  Phelps  v.  Curts,  80  111.  109; 
Francklyn  v.  Fein.  Barn.  Ch.  30 
First  Nat.  Bank  v.  Cooper,  9  X  I '■  R 
529  ;  Boone  v.  Ball,  '  Bush  1  Ky.)  66. 
See  Bank  v.  Cooper.  20  Wall.  171; 
Sands  v.  Codwise,  I  Johns  N  Y  1 
536;  Kid. lei-  v.  Borrobin,  72  X.  5  . 
104  :  Bates  v.  Bradley.  24  Bun  X  Y.) 
84. 


ASSIGNEE    IX    BANKRUPTCY 


§  114 


with  the  decisions  of  the  United  States  Supreme  Court,1 
for,  according'  to  the  latter  court,  if  the  assignee  in  whom 
the  right  is  vested  neglected  to  prosecute  during  the  two 
years  allowed  by  the  act,  the  right  to  attack  the  fraudu- 
lent transfer  would  be  absolutely  gone.~  The  assignee 
appointed  under  the  act  became  vested  with  the  title  to 
the  bankrupt's  assets  by  an  assignment  from  the  court, 
into  whose  custody  the  estate  was,  in  theory  of  law,  in- 
trusted. Even  a  claim  in  favor  of  the  bankrupt  against 
a  foreign  government  passed  to  the  assignee. 3  The 
assignee  is  regarded  merely  as  a  trustee  for  creditors. 
When  his  accounts  are  passed,  and  he  is  discharged,  the 
property  not  disposed  of  reverts  to  the  debtor  by  opera- 
tion of  law  without  reassignment.4  The  assignee  in 
bankruptcy  takes  only  such  rights  as  the  bankrupt  had, 
and,  in  the  absence  of  actual  fraud,  a  general  assignment 


1  Compare  Mover  v.  Dewey,  108  U. 
s.  303;  Trimble  v.  Woodhead,  102 
is  649  :  Glenny  v.  Langdon,  98  U. 
S.  20  :  Lowry  v.  Coulter,  9  Pa.  St. 
349;  M. Master  v.  Campbell,  41  Mich. 
514;  McCartin  v.  Perry,  39  X.  J.  Eq. 
201 . 

'Compare  Bates  v.  Bradley,  24 Hun 
(N.  V.i  s}  :  Allen  v.  Montgomery,  48 
Miss.  101. 

Phelps  v.  McDonald,  99    U.  S.  302; 
( Iomega  s  v.  Vasse,  l  Pet.  195. 

'See  Dewey  v.  Mover,  9  Hun  iX. 
Y  180;  Colie  v-  Jamison,  4  Hun 
(N.  V.  284  ;  Page  v.  Waring.  76  X. 
Y.  4?:;.  and  cases  cited  ;  Boyd  v.  01- 
v.-.v,  82  End.  294.  In  Stewart  v.  Piatt, 
nil    r.   s.   738,    the  courl   said  :  "  In 

Y.itinan     v.    Savings    Institution.    !)") 

1 '.  s  764,  we  held  it  to  be  an  estab- 
lished rule  that,  '  excepl  in  cases  of 
attachment  -  aga  ins!  the  property  of 
the  bankrupt  within  a  prescribed  time 
preceding  the  commencement  of  pro- 
ceedinga  in  bankruptcy,   and  except 


in  cases  where  the  disposition  of  prop- 
erty by  the  bankrupt  is  declared  by 
law  to  he  fraudulent  and  void,  the 
assignee  takes  the  title  subject  to 
all  equities,  liens  or  incumbrances, 
whether  created  by  operation  of  law 
or  by  act  of  the  bankrupt,  which  ex 
isted  against  the  property  in  the  hands 
of  the  bankrupt.'  Brown  v.  Heath- 
cote,  1  Atk.  160;  Mitchell  v.  Winslow, 
2  Story,  630;  Gibson  v.  Warden,  14 
Wall.  244  ;  Cook  v.  Tullis,  is  Wall. 
332  ;  Donaldson  v.  Farwell,  93  U.  S. 
631;  Jerome  v.  McCarter,  94  U.  S.  734. 
He  takes  the  property  in   the  same 

•  plight  and  condition  '  that  the  bank- 
rupt held  it.  Winsor  v.  McLellan,  2 
Story,  402."  Actual  fraud  is  neces- 
sary to  give  the  assignee  a  standing 
in  court.  Metropolitan  Nat.  Hank  v. 
Rogers,  8  C.  C.   A.  666,  53   Fed.  Rep. 

770  ;  Warren  v.  M ly,   122  U.  S.  138, 

7  S  ('.  Hep  1063;  In  re  Thomas, 
15  Fed.   Hep.  784. 


§115  GENEK  \l     A.SSIGNE]  . 

made  prior  to   the    assignment    in    bankruptcy    is    good 

against  the  assignee.1 

§  115.  General  assignee. —  It  is  a  general  rule  of  law  that 
a  person  cannot,  by  any  voluntary  act  of  his  own  transfer 
to  another  a  right  which  he  does  not  himself  possess.  A 
fraudulent  transfer  of  property  by  a  debtor,  made  with 
intent  to  defeat  creditors,  is,  as  we  shall  presently  show,  con- 
clusive upon  the  debtor  so  that  he  cannot  himself  reclaim 
it.  No  logical  theory  can  be  easily  framed  upon  which  it 
can  be  said  that  an  assignment,  wholly  voluntary  on  tin- 
debtor's  part,  vests  in  his  assignee  the  right  to  attack  fraud- 
ulent transfers."  Consequently,  it  has  been  decided  that 
the  right  to  impeach  or  set  aside  a  mortgage  which  is 
fraudulent  and  void  as  against  the  creditors  of  the  mort- 
gagor, did  not  pass  to  an  assignee  of  the  mortgagor,  by  a 
voluntary  general  assignment  in  trust  for  the  benefit  of 
creditors,  subsequently  executed,  and  unaffected  by  any 
statute  in  force  at  the  time.3  Still,  there  are  many  States 
in  which  an  assignment  in  insolvency  or  a  voluntary  assign- 
ment is  held  to  vest  in  the  assignee  the  right  to  avoid  ;i 
conveyance  made  in  fraud  of  creditors  ;  and  in  some  States 
the  power  is  statutory.4      Such  an  assignee  may  also  set 


1  In  re  Arledge,  1  Fed.  Casey,  1127.  4Hallo\vell    v.  Bayliss,  in   Ohio   Si 

'Pillsbury  v.  Kingon,  31  N.  J.  Eq.  537  ;  Oil.hs  v.  Thayer,  •',  Cush   (Ma 

619;  Brownell  v.  Curtis,  10  Paige  (N.  30;  Blake  v.  Sawin,  L0    Allen    (M 

Y. )  210  ;  Storm  v.  Davenport,  1  Sandf.  310;  Freeland  v.  Freeland    102    Ma 

Ch.    (N.    Y.)    135;    Sere    v.    Pitot,  G  475 ;  Spring  v.  Short,  12  Weeklj   Dig. 

Cranch,   332;    Estabrook   v.    Messer-  (N.  Y )  360,  affi'd  90  N.  Y.  544  ;  Lynde 

smith,    18    Wis.    545;    Browning   v.  v.    McGregor,    13   Allen  (Mass.)    172; 

Hart,  6   Barb.  (N.    V.)  91  ;  Leaeli    v.  Waters  v.  Dashiell,  1  Md.  155.  Simp- 

Kelsey,  7  Barb.  (N.  Y.)  466  ;  Maiders  son    v.  Warren,  55  Me.  L8;   Shipman 

v.    Culver's   Assignee,    1  Duv.    (Ky.)  v.  iEtna Ins.  Co.,  29  Conn.  245; Shirley 

164;  Carrv.  Gale,  3Woodb.&  M.  68;  v.  Long.  6 Rand.  (Va.)  735;  Clough  v. 

Flower   v.  Cornish,  25   Minn.    473,    1  Thompson,  7   Gratt.  (Va.)  26 ;  Staton 

Am.  Insolv.  Rep.  184;  Day  v.  Cooley,  v.  Pittman,  11  Gratt.  (Va     99;   Doyle 

118  Mass.  527;  GofT  v.  Kelly,  74  Fed.  v.  Peckham,  u    R.  I.  21  :  Southard    \ 

Rep  327.  Benner,  72  X.  Y.    421.  McMahon    v. 

^  Flower   v.  Cornish,  25  Minn.  473.  Allen,  35  N.  Y.  403;  Moncure  \    Han 


232 


GENERAL   ASSIGNEE. 


§  115 


aside  a  mortgage  or  other  conveyance  which  is  void  as  to 
creditors,  for  want  of  registration  or  other  defects.1  And 
in  some  cases  it  is  held  that  the  assignee  may  affirm  such 
fraudulent  conveyance,  and  thereby  estop  creditors  from 
impeaching  it.2  In  New  York  creditors  cannot  assail  a 
fraudulent  alienation  so  long  as  there  is  a  valid  assign- 
ment in  force.  The  right  of  attack  is  vested  by  statute 
in  the  assignee.8  But  a  creditor  can,  where  the  assignee 
refuses  to  act,  bring  an  action  in  behalf  of  the  whole  body 


son.  15  Pa.  St.  385  ;  Tarns  v.  Bullitt, 
35  Pa.  St.  308;  Matter  of  Cornell,  110 
N.  Y.  360,  18  X.  E.  Rep.  142.  See  22 
A  Hi.  L.  J.  60,  81  ;  Kilbourne  v.  Fay, 
29  Ohio  St.  264.  In  Walton  v.  Ely, 
53  Kan.  260,  36  Pac.  Rep.  332, 
the  court  says:  "  This  question  has 
been  practically  decided  in  the  affirma- 
tive in  Chapin  v.  Jenkins,  50  Kan. 
385,  31  Pac.  Rep.  1084.  In  that 
case,  the  difference  between  com- 
mon-law and  statutory  assignments 
was  recognized.  Under  the  former, 
the  relations  of  the  parties  were 
controlled  by  contract,  and  the 
assignee  had  no  (tower  except  such 
as  was  conferred  upon  him  by 
contract.  As  he  stood  in  the  shoes  of 
the  assignor,  he  could  assert  no  claim 
to  property  fraudulently  conveyed 
which  the  assignor  could  not  himself 
ha\c  asserted  As  has  been  decided 
in  1  he  cited  case,  our  statute;  changes 
the  effect  of  an  assignment,  and  also 
the  powers  of  the  assignee,  as  well  as 
his  relations  to  the  creditors.  While 
the  assignment,  in  the  first  instance, 
is  the  act  of  the  assignor,  thereafter 
the  control  and  disposition  of  the- 
property,    and    also     the    powers   and 

duties  of  the  assignee,  are   regulated 

by  statute,  and  no  direction  or  Limita- 
tion of  the  assignor  is  of  any  effect. 
Undei  our  statute,  the  assignee  is 
made  the  representative  of  all  the 
creditors,  and  it  is  his  duty  to  protect 
the  estate  and  defend  the  property  as- 


signed against  adverse  and  unjust 
claims."  Mansfield  v.  First  Nat. 
Bank,  5  Wash.  665  ;  Brown  v.  Farm- 
ers' &  M.  Banking  Co.,  36  Neb.  434  ; 
Red  River  Valley  Bank  v.  Freeman,  1 
N.  Dak.  196 ;  Moorer  v.  Moorer, 
87  Ala.  545  ;  Starks  v.  Curd,  88  Ky. 
164.  It  has  been  held  in  some  States 
that  if  the  assignee  refuses  to  bring 
the  action,  the  creditor  may  bring  it. 
Kalmus  v.  Ballin,  52  N.  J.  Eq.  290,  28 
Atl.  Rep.  791  ;  Lee  v.  Cole,  44  N.  J.  Eq. 
31 S,  15  Atl.  Rep.  531. 

'Rood  v.  Welch,  28  Conn.  157; 
Hanes  v.  Tiffany,  25  Ohio  St.  549  ;  hi 
re  Leland,  10  Blatchf.  503  ;  Barker  v. 
Smith,  12  N.  B.  R.  474.  But  see 
Williams  v.  Winsor,  12  R.  I.  9;  Dor- 
sey  v.  Smithson,  6  H.  &  J.  (Md.)  61  ; 
Van  Heusen  v.  Radcliff,  17  N.  Y.  580  : 
Ball  v.  Slaften,  98  N.  Y.  622.  He  may 
set  up  the  fraudulent  character  of  the 
conveyance  or  mortgage  when  it  is 
attempted  to  he  enforced  against  him. 
Hutchinson  v.  First  Nat.  Bank,  133 
Ind.  271,  30  N.  E.  Rep.  952. 

Butler  v.  Hildreth,  5  Met.  (Mass.  | 
49  :  Freeland  v.  Freeland,  102  Mass. 
477.  But  see  Matter  of  Leiman,  32 
Md.  225  ;  Dugan  v.  Vattier,  3  Blackf. 
(Ind.)  245. 

3  Loos  v.  Wilkinson.  HON.  Y.  209, 
18  N.  E.  Rep.  99  ;  Spring  v.  Short,  90 
N.  Y.  538 ;  Crouse  v.  Frothingham, 
97  N.  Y.  105,  113:  Laws  of  1858, 
Chap.  314.  In  matter  of  Cornell,  110 
X.  Y.  360,  the  court  says:     "Under 


§  I  15  GENERAL    ASSIGNEE. 

of  creditors,  in  aid  of  the  assignment,  where  the  instru- 
ment is  valid  as  a  whole,  but  certain  of  its  provisions  tend 
to  deprive  the  creditors  of  property  to  which  they  are 
justly  entitled.1  The  right  to  bring  such  an  action  is  not 
revived  by  the  discharge  of  the  assignee.'-'  The  right  to 
the  cause  of  action  and  to  the  proceeds  vests  exclusively 
in  him;  after  his  appointment  the  judgment-creditors  can- 
not bring  an  independant  action.3  In  Minnesota  it  was 
held  that  a  receiver  in  insolvency  can  bring  suit  to  set 
aside  fraudulent  conveyances,  and  that  it  is  not  necessary 
that  the  claims  of  the  creditors  on  whose  behalf  he  sues 
should  first  have  been  reduced  to  judgment.4  It  is  also 
held  in  the  same  State  that  it  is  to  be  presumed  that  the 
assignee  represents  creditors  when  he  sues,  and  that  a 
purchaser  from  the  assignee  may  maintain  a  suit  to  avoid 
a  fraudulent  mortgage  affecting  the  property  purchased.5 
Of  course  the  creditor  may  be  estopped  from  attacking 
the  assignment  by  accepting  benefits  under  it.,;  It  has 
been  asserted  that  where  the  assignee  is  given  by  statute 
full  power  to  attack  fraudulent  transfers,  stronger  reasons 
for  setting  aside  an  assignment  on  the  ground  of  fraud 
must  be  shown.7 


the  act  chapter  314  of  the  Laws  of  '  Voorhees  v.  Carpenter,    I".'?    Ind. 

1858,  an  assignee  for  creditors,  under  300,  26  N.  E.  Rep.  838. 

a    general    assignment,    may    assail  3  Passavant   v.    Bowdoin,   60    linn, 

fraudulent  transfers  of  property  made  (N.  Y.)  433,  15  N.  Y.  Supp.  8. 

by  the  assignor  prior  to  the  assign-  *  Chamberlain  \.  O'Brien,  H">  Minn. 

ment,   by  action  to  set   them  aside.  80,  48  N.  W.  Rep.  447. 

(Southard   v.   Benner,   72  N.  Y.  424;  5  Shay  v.  Security   Bank,  •',!)  N.    W. 

Ball  v.  Shaften,  98  Id.  622  ;   Lichten-  Rep.  920. 

berg  v.  Herdtfelder,  103  Id.  306).  Nor  "  Groves  v.  Rice,  1  18  N.  Y.  22 

do   we  entertain  any   doubt  that  it  42  N.  E.  Rep.  664;  Mills  v.  Parkhurat, 

would  be  his  duty  so  to  do  in  a  proper  126  N.   Y.    89,   26   X.    E.    Rep.    mil. 

case,  and  that  his  negligent  omission  Cerf  v.   Wallace,  14  Wash.    249,  252, 

of  this  duty  would  constitute  a  breach  44  Pac.  Rep.  264. 

of  trust.    \ln  re  Colin,  78  N.  Y.  248)  "  'Batten    v.   Smith,  62  Wis.  92,  96, 

■Spelmanv.  Freedman,   130  N.  Y.  22  N.  W.  Rep.  3*2.     Bui    see  Krura- 

421,   29  N.   E.   Rep.    765;    Abegg    v.  dick    v.    White.    107  Cal.  37,  39  Pac. 

Bishop,  142  N.  Y.  286,   36  N.    E.  Rep.  Rep.    1060;    Green     v.     Wallis     Iron 

1058;  Maassv.  Falk,  146  N.  Y.  34,  40  Works,  49  N.  J.  Eq.    18,    23   Ad.    Rep. 

N.  E.  Rep.  504.  498. 


234 


RE(  EIVERS. 


§  116 


^  116.  Receivers.— Under  the  practice  in  New  York,  and 
in  some  of  the  other  States,  the  receiver  of  a  debtor  may 
impeach  fraudulent  transfers,1  and  disaffirm  fraudulent 
dealings  of  the  debtor.'-'  The  appointment  confers  upon 
him  the  right  to  set  aside  all  transfers  made  by  the  debtor 
to  defraud  his  creditors,  which  the  creditors  themselves 
could  have  avoided1'  In  Bostwick  v.  Menck,4  it  was 
decided  that  the  right  of  a  receiver  representing  creditors, 
and  acting  in  their  behalf,  was  no  greater  than  that  of  the 
creditors  themselves  ;  that  the  legal  and  equitable  right  of 
the  creditors  was  limited  to  securing  a  judgment  setting 
aside  transfers  as  fraudulent  only  in  so  far  as  might  be 
necessary  to  satisfy  debts  ;  and  that,  when  this  was  accom- 
plished, the  receiver's  duties,  and  consequently  his  pow- 
ers, and  his  right  to  act  further  in  behalf  of  the  creditors, 
ceased  as  to  the  property  that  had  been  conveyed  by  the 
debtor.5  The  receiver  stands  in  the  place  of  the  judg- 
ment-creditor.6     In   Olney   v.   Tanner,7     after    a    careful 


1  Osgood  v.  Laytin,  48  Barb.  (N.  Y.) 
Mi:;  ;  atfi'd  •-»  Abb.  Pr.  X.  S.  (X.  Y.)  9  ; 
Hamlin  v.  Wright,  ',»:!  Wis.  492;  Bar- 
ton v.  Bosner,  .'I  Hun  (N.  Y.)  469 ; 
Porter  v.  Williams,  9  X.  Y.  142  ;  Un- 
derwood    v.   Sutcliffe,   77  N.   Y.    62; 

Erdall  v.  Alw 1,  7!)  Wis.  1.47X.W. 

Rep.  1 124  :  Dunham  v.  Byrnes.  36 
.Minn.  L06,  30  X.  W.  Rep.  402.  In 
Mandeville  v.  Avery,  124  X.  Y.  385, 
'.'»■>  N.  E.  Rep.  9.11,  Brown.  J.,  said  : 
"A  receiver  appointed  in  supplemen- 
tary proceedings  under  the  Code  is 
rested  \\  itu  tin-  legal  title  to  all  I  he 
personal  property  of  the  judgment- 
debtor,  and  has  the  further  right  to 
prosecute  actions  to  sel  aside  all 
transfers  of  property  made  by  the 
debtor  to  defraud  his  creditors."  s.  P., 
Stephens  v.  Perrine,  143  N.  ^  l?(i.  39 
N.  I-'.  Rep.  i  l.  See  I  Leineman  v.  I  [art, 
55  Mich.  84,  80  N.  \V.  Rep.  r92 

Pittsburg   <  iarbon  <  !o.    v.    McMil- 
lm.  L19N.  Y.  46,  38  N.  E.  Rep.  530. 


A  new  receiver  (Bowden  v.  John- 
son, 107  U.  S.  264,  2  S.  C.  Rep.  246).  or 
an  assignee  of  a  bankrupt,  may  be 
substituted  as  plaintiff  in  the  appellate 
courts. 

4  40  N.  Y.  386.  In  Stephens  v.  Per- 
rine, 143  X.  Y.  483,  39  N.  E.  Rep.  11, 
the  courl  say  :  '•  It  has  been  decided 
by  this  courl  that  such  a  receiver  can 
maintain  an  action  of  this  nature 
where  the  assignment  or  mortgage  is 
void  on  the  ground  that  it  was  exe- 
cuted for  the  purpose  of  defrauding 
creditors,  and  we  think  the  same  prin- 
ciple reaches  the  case  where  the 
mortj;a.i;e  is  void  because  it  was  not 
tiled  and  there  was  no  change  of 
possession." 

See  .Manley  v.  Rassiga,  13  Hun 
(N.  Y.i  290. 

'  Kennedy  v.  Thorp.  .".1  N.  Y.  17  1. 
See  Olney  v.  Tanner,  18  Fed.  Rep.  636. 

■  10  Fed.  Rep.  113;  affi'd  18  Fed. 
Rep.  636. 


§  u6  i  i\  ii;s.  235 

examination  of  the  authorities,1  the  conclusion  is  reached 
that  a  receiver  appointed  in  supplementary  proceedings 
cannot  be  held  to  be  vested  by  virtue  of  his  appointment 
\vith  the  title  to  property  fraudulently  conveyed  by  the 
judgment-debtor.  The  court  will  refuse  to  put  him  sum- 
marily in  possession  of  the  property  covinously  alienated  ; 
it  will  not  authorize  him  to  meddle  with  it,  and  will  rel 
to  protect  him  in  so  doing.  The  receiver  may,  as  we 
have  seen,  assail  the  covinous  transfer  by  an  action.' 
Grover,  J.,  said,  in  Bostwick  v.  Menck:3  "He  (tin- 
receiver)  acquires  no  right  to  the  property  (fraudulently 
assigned),  by  succession  to  the  rights  of  the  debtor  ; 
....  no  rights  (2.  e.  of  property)  other  than  those  of 
the  debtor  are  acquired.  He  does  not  acquire  the  legal 
title  to  such  property  by  his  appointment.  That  is  con- 
fined to  property  then  owned  by  the  debtor  ;  and  the 
fraudulent  transferee  of  property  acquires  a  good  title 
thereto  as  against  the  debtor,  and  all  other  persons,  except 
the  creditors  of  the  transferrer.  The  only  right  of  the 
reciver  is,  therefore,  as  trustee  of  the  creditors.  The  latter 
have  the  right  to  set  aside  the  transfer  and  to  recover  the 
property  from  the  fraudulent  holder  ;  and  the  receiver  is, 
by  law,  invested  with  all  the  rights  of  all  the  creditors 
represented  by  him  in  this  respect."4 

'See  Rodman   v.  Henry,   17   N.  Y.  647;  Moyer  v.  Dewey,    103  I".  S.  301. 

484;  Lathropv.  Clapp,  40  N.  Y.  333;  Where  there  is  an  assignee  a  receiver 

Brown  v.  Gilmore,  16  How.  Pr.  (N.Y.)  has  no  standing.     Olney  v.  Tanner,  18 

527;  Teller  v.  Randall,  40  Barb.    (N.  Fed.  Rep.  637. 
Y.)    242;    Field   v.    Sands,    8   Bosw.  ■  i<»  X.  Y.  383. 

(N.    Y.)    685;   Bostwick    v.    Menck,  'In  New   York  the    receiver  takes 

40  N.  Y.  383;  Becker  v.  Torrance,  31  title  to  the  debtor's  real    property  bj 

N.  Y.  637  ;  Mandeville  v.  Avery,  124  virtue  of  his  appointment.    Cooneyv. 

N.  Y.  376,  26  N.  E.  Rep.  951.  I  loouey,  65  Barb.  (N.  Y    525  :  Fessen- 

-  It  is  only  through   the  instrumen-  den   v.  W Is,  3    Bosw.     V    ST.)  556; 

tality  of  an  asssignee.  that  a  creditor  Bostwick  v.  Menck,   10  N.  Y.  384  ;  tin- 
can      reach      property     fraudulently  derwood   v.    Sutcliffe,    77    N.    Y.     63. 
transferred  by  a  bankrupt  prior  to  ad-  See  Stephens  v.Meriden  Britanni 
judication.     Olney  v.  Tanner,  18  Fed.  13    App.    Div.    (N.    Y      372,    13  N.  Y. 
Rep.  637  ;  Glenny  v.  Langdon,  98  U.  Supp.  226. 
S.  20  ;  Trimble  v.  Woodhead,  102  U.  S. 


236 


RECKIVEKS. 


Il6 


In  New  Jersey,  a  receiver,  appointed  by  virtue  of  the 
statute  providing  a  method  for  discovering  the  concealed 
property  of  a  judgment-debtor,1  can,  in  his  official  charac- 
ter, exhibit  a  bill  in  chancery  to  annul  sales  of  such  prop- 
erty or  encumbrances  upon  it,  on  the  ground  that  such 
sales  or  encumbrances  are  in  fraud  of  creditors. ~  In  the 
case  first  cited,  Parker  v.  Browning,3  is  quoted  with  appro- 
val. In  the  latter  case,  in  speaking  of  the  course  to  be 
taken,  when  property,  which  is  claimed  by  a  receiver 
appointed  by  the  chancellor,  is  in  the  hands  of  a  third 
party,  who  claims  the  right  to  retain  it,  Chancellor  Wal- 
worth says  :  "  The  receiver  must  either  proceed  by  suit, 
in  the  ordinary  way,  to  try  his  right  to  it,  or  the  com- 
plainant should  make  such  third  person  a  party  to  the 
suit,  and  apply  to  have  the  receivership  extended  to  the 
property  in  his  hands."4  A  sequestrator  or  receiver  of 
personal  property  and  rents  appointed  in  an  action  may, 
under  the  direction  of  the  court,  test  a  fraudulent  aliena- 
tion of  property,5  though  this  question  is  much  confused 
in  New  York.1' 


1  Revision  of  1877,  p.  393. 

2  Miller  v.  Mackenzie,  29  N.  .1.  Eq. 
292.  But  compare  Higgins  v.  Grilles 
heiner,  2G  N.  J.  Eq.  308. 

s  I'uige  (N.  V.i  1588. 
'See  Carr  v.  Hilton,  1  Curt.  C.  C. 
280  ;  Hamlin  v.  Wright,  23  Wis.  492  ; 
Bostwich  v.  Menck,  4  Daly  (N.  Y.) 
68.  Willard,  .1..  in  Porter  v.  Wil- 
liam-, '.)  N.  Y.  142,  150,  said  :  "The 
ait  which  the  receiver  seeks  to  avoid 

in  this  case  was  an  illegal  act  of  the 
debtor.  The  object  of  the  action  is 
to  set  aside  an  assignment  made  by 
the  debtor  with  intent,  as  is  alleged, 
to  defraud  the  creditor  under  whose 
judgment  and  execution  1  he  plaintiff 
was  appointed  receiver,  and  t  be  other 
creditors  of  the  assignor.  Such  con- 
veyance was  void  at  common  law, 
and  is  expressly  forbidden  by  the 
1  ami..       h    j.    void    as   against     the 


creditors  of  the  party  making  it, 
though  good  as  between  him  and  his 
grantee.  The  plaintiff,  representing 
the  interests  of  the  creditors,  has  a 
right  to  invoke  the  aid  of  the  court  to 
set  aside  the  assignment.     He  stands 

in  this  respect,  in  the  same  condition 
as  the  receiver  of  an  insolvent  corpo- 
ration, or  as  an  executor  or  adminis- 
trator, and  like  them  can  assail  the 
illegal  and  fraudulent  acts  of  the 
debtor  whose  estate  be  is  appointed  to 
administer." 

See  Donnelly  v.  West,  17  Hun  (N. 
Y.)  564;  Foster  v.  Townshend,  2  Abb. 

N  .  ( '.  ( N.  Y. )  29. 
6See    Foster   V.    Townshend,   68    X. 

Y.  203  :  Ogden  v.  Arnot,  'Jit  Hun  (N. 

Y.)  150;  Keeney  V.  Home  Ins.  Co.,  71 

X.  Y.  396;  Fincke  v.  Funke,  25  Hun 

(X.  Y.)  618. 


§  11/ 


RECEIVERS    i  IF   CORP<  (RATIONS. 


?37 


§  117.  Receivers  of  corporations.  -  Receivers  of  insolvenl 
corporations,  when  suing  for  portions  of  the  capital,  rep- 
resent creditors,1  and  not  the  corporation,''  and  are 
clothed  with  other  rights  than  those  which  the  corpora- 
tion possessed.3  It  is  a  fundamental  principle,  upon 
which  the  American  cases  at  least  proceed,  that  the  capi- 
tal of  a  corporation,  especially  after  insolvency,  is  a  trust 
fund  for  the  benefit  of  creditors.4      The  same   is  true  cf 


1  Van  Fleet,  V.  C,  in  Graham  lint- 
ton  Co.  v.  Spielmann,  50  N.  J.  Eq. 
124,  said  :  "  The  receiver  of  an  insol- 
vent corporation  becomes,  as  soon  as 
he  qualifies,  invested,  by  force  of  the 
statute,  with  full  power  to  demand, 
sue  for  and  take  into  his  possession 
all  of  the  property  of  every  descrip- 
tion belonging  to  the  corporation,  and 
to  convert  the  same  into  money. 
....  From  that  time  forth  its 
property  is.  by  law,  appropriated  ex- 
clusively and  irrevocably  to  the  pay- 
ment of  its  debts.  Power  is  conferred 
on  its  receiver  to  take  possession  of 
all  of  its  property  and  to  convert  it 
into  money,  to  the  end  that  the 
money  thus  obtained  may  be  dis- 
tributed among  its  creditors.  No 
other  application  or  disposition  can 
be  made  of  the  money  realized  from 
its  property.  It  must  be  paid  to  its 
creditors,  and  in  distributing  it 
among  unsecured  creditors,  the  statu- 
tory direction  is  that  they  must  be 
paid  equally  in  proportion  to  their 
respective  debts.*' 

2  Osgood  v.  Ogden,  4   Keyes  (N.  Y.) 

70  ;  Ruggles  v.  Brock,  0  Hun  (N.  Y. ) 
164;  Sawyer  v.  Hoag,  17  Wall.  G10. 
619  ;  Webster  v.  Upton,   91  U.   S.  65, 

71  ;  Chubb  v.  Upton,  95  U.  S.  665, 
667;  Dayton  v.  Borst,  31  N.  Y.  435, 
Wait  on  Insolv.  Corps.  Chap  X. 

3  Ruggles  v  Brock,  6  Hun  (N.  Y.) 
164;  Pittsburg  Carbon  Co.  v.  McMil 
lin.  119  N.  Y.  46.  23  N.  E.  Rep.  530  ; 
Graham  Button  Co.  v.  Spielmann,  50 


N.  J.  Eq.  120,  24  Ail  Rep.  571  ;  Upton 
v.  Englehart,  3  Dillon,  196,  503  ;  Os- 
good v.  Ogden,  4  Keyesi  X.  Y.)  70  8H  , 
Porter  v.  Williams,  9  N.  Y.  142.  L49  ; 
Osgood  v.  Laytin,  3  Keyes (N.  y.)521; 
Gillet  v.  Moody,  ::  N.  Y.  179.  A  cor 
poration  is  like  a  natural  person  in 
that  any  conveyance  of  its  property 
without  authority  of  law,  and  in 
fraud  of  existing  creditors,  is  void  as 
against  them.  Waba'sh,  St.  L.  &  P. 
R.  R.  Co.  v.  Ham,  114  U.  S.  591.  5  S. 
C.  Rep.  1081;  Richardson  v.  Green, 
133  U.  S.  44,   10  S.  C.   Rep.  280. 

4  Wood  v.  Duinmer,  3  Mason,  308  ; 
Sawyer  v.  Hoag,  17  Wall.  610;  Batch 
v.  Dana.  101  U.  S.  205  :  Dayton  \. 
Borst,  31  N.  Y.  435;  New  All.an> 
v.  Burke,  11  Wall.  96,  106:  Upton  v. 
Tribilcock,  91  U.  S.  45,  17  ;  Bartletl  v. 
Drew,  57  N.  Y.  587;  Lamar  [ns.  I  ... 
v.  Moore,  1  Am.  Insolv.  Rep.  62  ; 
Wait  on  Insolv.  Corps.,  £  1  12  :  Vance 
v.  McNabbCoal.  etc.  Co.,  92Tenn.  17. 
20  S.  W.  Rep.  424  ;  Hospes  \.  North- 
western Mfg., etc.  Co.,  48  .Minn  1 ;  I,  .Mi 
N.W.  Hep.  1117:  Bradley  v.  Converse, 
3  Fed.  Cases,  1143;  Richardson  \. 
Green,  133  U.  S.  30,  10  S.  C.  Rep.  280; 
Clark  v.  Bever,  L39  U.  S.  109,  lis  «  . 
hep.  468;  Fogg  v.  Blair,  139  D  S. 
125,  17  S.  C.  Rep.  176  .  Cole  v.  Miller- 
ton  Iron  Co  .  L33  X.  Y.  Mis,  30  X.  E. 
Rep.  si:;  Handle}  v.  Stutz,  189  U. 
S.  427,  11  S.  C.  Rep.  •->:;<);  Buck  v. 
Ross.  68  Conn.  31  ;  Crandall  v. 
Lincoln,  52  Conn.  73,  91. 


238  FOREIGN    RE<  I.I  \  IKS.  §   I  I  S 

unpaid  subscriptions.1  It  is  foreign  to  our  purpose  to 
enter  into  the  wide  field  of  corporation  law  relative  to 
insolvency,2  but  the  principles  of  these  cases  are  valuable 
as  showing  that  the  representative,  receiver,3  or  liquidator 
of  a  corporation  is,  like  an  administrator,  assignee,  or 
receiver  of  a  debtor,  vested  with  the  status  of  a  creditor. 
Where  a  statute  creates  a  cause  of  action  in  favor  of  cred- 
itors who  are  within  certain  prescribed  conditions  a 
receiver  cannot  enforce  it.4  The  courts  of  the  United 
States  will  not  ordinarily  interfere  with  a  receiver 
appointed  in  the  State  court.5  It  may  be  observed  here 
that  the  power  of  the  comptroller  of  the  currency  to  wind 
up  the  affairs  of  a  national  bank  in  certain  contingencies 
does  not  exclude  the  authority  of  a  competent  tribunal 
to  appoint  a  receiver  in  other  cases.0 

r?  118.  Foreign  receivers.— In  Booth  v.  Clark,7  the 
court  says:  "A  receiver  is  appointed  under  a  creditor's 
bill  for  one  or  more  creditors,  as  the  case  may  be,  for 
their  benefit,  to  the  exclusion  of  all  other  creditors  of  the 

debtor,  if  there  be  any  such Whether  appointed, 

as  this  receiver  was,  under  the  statute  of  New  York,  or 
under  the  rules  and  practice  of  chancery,  as  they  may  be, 
his  official  relations  to  the  court  are  the  same.  A  statute 
appointment  neither  enlarges  nor  diminishes  the  limita- 
tion upon  his  action.  His  responsibilities  are  unaltered. 
Under  either  kind  of  appointment  he  has  at  most  only  a 
passive  capacity  in  the  most  important  part  of  what  it 
may  be  necessary  for  him  to  do,  until  it  has  been  called 
by  the  direction  of  the  court  into  ability  to  act.      He  has 


Fogg  v.  Blair,  139  U.  S.  125,  II   S.  'Farnsworth     \.  Wood,   !)l    N.  Y. 

C.    Rep.    476  ;    <  laniden    \.     Stuart,  308. 

Ml  U.  s.  104,  12  s.  C.  Rep.  585.  Porter  v.  Sabin,  149  U.  S.  480,  13 

Wail  "ii    [nsolvenl    Corpora-  K.  »'.  Rep,  1008. 

tions.  Baker,  Voorhis  &  Co.,  1888.  'Irons      v.     Manufacturers'     Nat, 

Pittsburg  Carbon  Co.  v.   McMillin,  Bank,  6  Biss.  301. 

119  N.  Y.  Hi.  33  N.  I-:.  Rep.  580.  LI  Bow.  338. 


§    1  18  I '  iREIGN    RE(  l.l\  ERS. 

no  extra-territorial  power  of  official  action;  none  which 
the  court  appointing  him  can  confer,  with  authority  to 
enable  him  to  go  into  a  foreign  jurisdiction  to  take  p 
session  of  the  debtor's  property  ;  none  which  can  give 
him,  upon  the  principle  of  comity,  a  privilege  to  sue  in  a 
foreign  court  or  another  jurisdiction,  as  the  judgment- 
creditor  himself  might  have  done,  where  his  debtor  may 
be  amenable  to  the  tribunal  which  the  creditor  may 
seek."1  So  in  Brio-ham  v.  Luddin^ton,2  which  was  a  bill 
filed  in  the  southern  district  of  New  York  by  a  receiver 
appointed  on  a  judgment-creditor's  bill  in  the  eastern  dis- 
trict of  Wisconsin,  the  suit  was  dismissed.3  To  the  sugf- 
gestion  of  counsel  that,  by  the  statutes  of  Wisconsin, 
receivers  appointed  on  creditor's  bills  are  vested  with 
full  title,  and  have  full  authority  to  maintain  suits,  which 
the  Circuit  Court  of  the  United  States  for  the  southern 
district  of  New  York  ought  to  recognize,  Mr.  Justice 
Woodruff  said:  "(0-  This  receiver  was  appointed 
under  and  by  virtue  of  the  general  power  of  courts  of 
equity,  and  with  such  effect  only  as  is  due  to  the  order 
of  the  court  making  the  appointment.  He  was  not 
appointed  under  or  by  virtue  of  any  statute.  (2  ).  The 
statutes  of  the  State  of  Wisconsin  cannot  enlarge  or 
alter  the  effect  of  an  order  or  decree  of  the  Circuit  Court 
of  the  United  States,  nor  enlarge  or  modify  the  jurisdic- 
tion of  that  court  or  its  efficiency."4  A  doctrine:  is 
growing  up  in  favor  of  recognizing  foreign  receivers  by 
comity.5 

1  See   especially  Olney    v.  Tanner.  'National   Trust    Co.   v.    Miller,    33 

10  Fed.  Rep.  104,  and  cases  cited.  N.  J.  Eq.  159  ;  Falk  v.  Janes,  49  N.  J. 

212Blatchf.  237.  Eq.  489,  23  Ail.  Rep.  813;  Bidlack  v. 

■'■  See  Hope  Mutual  Lif e  Ins .  Co .  v .  Mason,   26   X.   J.    Eq.   230;   National 

Taylor,  2  Rob.  (N.  Y.)  278,  284.  Trust  Co.  v.  Murphy.   30    N.    J.    Eq. 

4Citing  Payne  v.   Hook,   7  Wall.  408.     Compare   Matter  of   Wait<  .  99 

425  N.  Y.  433. 


?40 


CRE]  >IT<  >RS   l  IB    C<  »RP<  ►RATH  >NS. 


II9 


?j  119.  Creditors  of  Corporations.  — Creditors  of  an  indebted 
corporation  may  have  the  aid  of  a  court  of  equity  against 
the  corporation  and  its  debtors  to  compel  the  collection 
of  what  is  due,  and  the  payment  of  its  debts,1  and  the 
winding  up  of  its  affairs.2  In  Graham  v.  Railroad  Co.8 
will  be  found  an  important  discussion,  by  the  learned  Mr. 
Justice  Bradley,  of  the  effect  of  a  voluntary  alienation  of 
property  by  a  corporation  as  affecting  subsequent  cred- 
itors. In  this  case  counsel  urged  that  the  property  of  a 
corporation  was  a  trust  fund  for  creditors,4  and  that  this 
meant  all  creditors  becoming  such  during  the  life  of  the 
corporation.  The  court,  however,  could  discover  no 
reason  why  the  disposal  by  a  corporation  of  any  portion 
of  its  assets  should  be  questioned  by  subsequent  creditors 
of  the  corporation,  any  more  than  a  like  disposal  by  an 
individual  of  his  property  should  be  so  attacked.5  This 
would  seem  to  put  corporations  and  individuals  upon  the 
same  footing  as  to  voluntary  alienations,  as  regards  a 
certain  class  of  creditors;  but  the  distinction  must  not  be 
overlooked  that  the  corporation  itself  may  recover  the 
property,  where  the  voluntary  or  fraudulent  transfer  was 
effected  by  faithless  or  corrupt  officials. 

Creditors  of   a   corporation  who   have   exhausted   their 


1  Ogilvie  v.  Knox  [ns.  Co.,  22  Bow. 
380;  2d  appeal,  2  Black,  539;  Hatch 
v.  Dana,  101  U.  S.  205. 

Tradesman  I'ul>.  ( !o.  v.  Knox- 
ville  Car  Wheel  Co.,  95  Tenn.  634,  32 
S.  W   Rep.  1097. 

»102  D".  S.  148;  Montgomery  Web 
Co.  v.  Dienelt,  133  Pa.  St.  585,  19 
Ml    Rep.  128. 

1  Bee  Railroad  <  !o.  v.  I  Coward,  ~< 
Wail.  392;  Sawyer  v.  Hoag,  17  Wall. 
610  Dayton  v.  Borst,  31  N.  Y.  135  ; 
Dpton  v.  Tribilcock,  91  U.  S.  45,  17  ; 
Marti,  it  v.  Drew,  57  N.  Y.  587.  In 
I  Blair,    139  D".  S.    126,  11  S.  C. 

Rep.  476,  the  court  says:  "The  princi- 


ples which,  by  established  law,  govern 
the  relations  between  a  corporation 
and  its  creditors  and  stockholders, 
and  the  management  <>f  thecorporate 
property,  would  be  <>f  little  value,  if 
the  corporation,  by  its  directors, 
could  sell  or  dispose  of  its  assets  to 
the  prejudice  of  creditors  and  stock- 
holders under  such  circumstances,  <>n 
such  terms  and  at  such  prices  as  indi- 
cated,  upon  the  lace  of  the  trans- 
action, thai  they  were  being  squan- 
dered recklessly  or  fraudulently  in 
disregard  <>f  the  trust  committed  to 

them."       See  g   117. 

See  < lhap.  VI. 


§   120  SHERIFF 


241 


remedy  at  law,  may  proceed  in  equity  to  compel  a  stock- 
holder to  pay  up  a  balance  due  upon  a  subscription.1  So 
judgment-creditors  of  a  corporation  may  follow  corporate 
assets  into  the  hands  of  stockholders  amongst  whom 
it  was  divided  before  the  debts  of  the  association  were 
paid.2  Where  a  corporation  has  changed  its  name  or 
assumed  a  new  organization  to  evade  its  liabilities,  cred- 
itors may,  as  against  stockholders  who  are  not  purchasers 
for  value  without  notice,  pursue  the  assets.5 

§  120.  Sheriff.  —  When  process  comes  to  his  hands  the 
sheriff  may  undoubtedly  attach  any  property  which  has 
been  transferred  by  an  alleged  fraudulent  assignment, 
and  hold  it  subject  to  the  decision  of  the  court  upon  the 
question  of  fraud.  In  such  a  case  the  sheriff  must  defend 
the  seizure  in  behalf  of  the  creditors,  and  show  that  the 
assignment  was  fraudulent  as  to  them.  As  to  creditors 
the  title  to  such  property  does  not  pass  if  the  assignment 
is  fraudulent,  but  it  remains  liable  to  seizure  to  satisfy 
their  debt.4  The  case  is  different  when  the  assigned 
property  has  been  sold  by  the  vendee  and  its  identity 
destroyed ;  the  proceeds  cannot  be  attached  or  levied 
upon  by  the  sheriff  as  the  debtor's  property.  Merely 
setting  aside  the  assignment  would  not  vest  the  title  to 
such  proceeds  in  the  debtor.  The  only  remedy  of  the 
creditor  in  such  a  case  is  to  institute  a  creditor's  suit,  and 
fasten  a  trust  upon  such  proceeds  for  the  benefit  of  cred- 


1  Hatch    v.  Dana,    101    U.    S.   205;  3  Montgomery   Web  Co.  v.  Dienelt, 

Ogilvie  v.  Knox  Ins.  Co.,  22  How.  380;  133  Pa.  St.  597  :  Hibernia   tns.  <  !o.  v. 

Pierce  v.  Milwaukee  Constr.  Co.,  38  St.  Louis,  etc.  Transportation  Co.,  13 

Wis.  253  ;  Gogebic  Investment  Co.  v.  Fed.  Hop.  516. 

Iron  Chief  Min.  Co.,  78  Wis.  427,  47N.  l  See  Kelly  v.    Lane,    13   Barb.    V 

W.  Rep.  726.  Y.)  610.     Compare Greenleaf  v.  .Mum 

2Bartlett  v.   Drew,    57  N.  Y.  587;  ford,  4    Abb.    Pr.   N.    S.   (N.  Y      184; 

Missouri,  L.  M.  &S   Co.  v.  Reinhard,  Cross   v.  Daly.  5    Daly  (N.   Y 

114  Mo.  218,  21  S.  W.  Rep.   488  ;   Fort  Rinchey  v.  Strj  ker,  28  N.  Y  45 ;  l 

Payne  Bank  v.  Alabama  Sanitarium  v.    Van  Hoesen,  26   Hun  (N.  Y     316. 

Co.,  103  Ala.  358,  15  So.  Rep.  618.  See  §  81. 
16 


242 


111  tRS 


WIDOW. 


121 


itors,  which  necessarily  confirms  the  legal  title  of  the 
assignees  to  the  assigned  property,  instead  of  annulling 
it,  as  would  be  the  case  if  the  sheriff  had  seized  the 
assigned  property  instead  of  the  proceeds.1 

>J  121.  Heirs  —  Widow. — The  heir  of  a  grantor  cannot 
impeach  his  ancestor's  deed  on  the  ground  that  it  was 
made  in  fraud  of  creditors,  for  he  can  claim  no  right 
which  the  ancestor  was  estopped  from  setting  up.  "This 
rule  is  a  penalty  imposed  by  the  law  for  the  prevention 
of  frauds  and  for  the  protection  of  subsequent  pur- 
chasers." ~  This  rule  applies  even  where  the  grantee  was 
not  a  participant  in  the  fraud,  as  where  the  title  was  taken 
in  his  name  originally  without  his  knowledge.3  The 
statutes  avoiding  fraudulent  transfers  are,  as  we  have 
shown,4  available  only  to  the  person  or  persons  who  might 
be  delayed,  hindered,   or  defrauded.5      The  heir  at  law  is 


1  Lawrence  v.  Bank  of  the  Repub- 
lic, 35  X.  V.  320.  See  Thurber  v. 
Blanck,50  X.  Y.  83;  Adams  v.  David- 
Bon,  in  X.  V.  309,  315.  Sec  §  81. 
( lompare  <  (lark  v.  Foxcroft,  6  Me.  20G, 
and  Quincy  \.  Ball,  1  Pick.  (Mass.) 
357,  11  Am  Dec.  [98.  In  Robertson  v. 
Sayre.  L34  X.  Y.  99,  31  X.  E  Rep.  250. 
where  Follett,    <  !h.  J.,  said  ;    "  D.    H. 

Robertson  having  procured  these  lots 
to  be  conveyed  to  Messenger  for  the 
purpose  of  defrauding  his  creditors, 
bad    no    Legal    estate    in    then]    which 

could  be  reached  by  execution  <( tar- 
field  v.  Hat  maker.  15  X.  Y.  475)  or 
which  on  his  death  descended  to  his 
heirs  (Moseley  \.  Moseley,  15  Id.  :;:;!  ; 
Wait  on  Fraud.  Convey,  g  121.  See 
also  1  R,  S.  728,  §?  50,  51,  52  ;  Under- 
wood v,  Sutcliffe.  71  X.  Y  58  ;  Brew- 
v.  Power,  H>  Paige,  562  ;  Bates  v. 
Lidgerwood  Mfg  l  !o  50  Hun  |X.  Y.] 
120  ;  Hamilton  v.  <  'one,  99  .Mas-,.  478), 
This  rule  in  a  penalty  impose  1  by  the 
law  for  t he  prevention  of  frauds  and 
for  the  protection  of  subsequenl  pur- 


chasers (Revisers'  notes  to  sections 
cited),  and  the  reason  for  its  applica- 
tion is  not  weakened  in  case  the 
grantee,  as  in  the  case  at  bar,  was  not 
a  participant  in  the  fraud." 

*  Robertson  v.  Sayre,  134  X.  Y.  99; 
.Moseley  V.  Moseley,  15  X.  Y.  334. 
See  Vance  v.  Schro.ycr,  79  Ind.  380; 
Robertson  v.  Sayre,  134  N.  Y.  9<J.  31 
N.  E.  Rep.  250. 

:;  Robertson  v.  Sayre,  134  X.  Y.  99, 
31  X.  E.  Rep.  250,  citing  the  text. 

1  See  Chap    111  ;  also§  107. 

See  Dutton  v.  Jackson,  2  Del.  Ch 

si; :  Morrison  v.  At  well,  9  Bosw,  iX. 

\.\  503  :  Powers  v.  Graydon,  10  Bosw. 

(N.  Y.)  630     See  infra,  Chap.  XXVI. 

Legatees.  — A  Legatee  cannot  avoid, 

OH  the  ground  of  fraud,  a  transaction 

which  was  binding  on  bis  testator. 
Guidry  v.  Grivot.  2  Mart.  X  s.  (La.) 
13,  1  1  Am.   Dec.   L93  ;   hut    in    Addison 

v.  Bowie,  2  Bland's  Ch.  (Md.)  606,  it 

is  said,  a  legatee  may  in  certain  cases 
file  a  ere ditor's  bill. 


§  122  HUSBAND    VND   WIFE. 

not  a  proper  party  to  enforce  an  alleged  trust  in  personal 
property  in  favor  of  an  intestate.1  It  may  be  here 
observed,  though  possibly  extraneous  to  our  general 
theme,  that  one  of  several  heirs  may  maintain  a  suit  to 
set  aside  a  conveyance  procured  from  the  ancestor  by 
means  of  the  fraud  and  undue  influence   of   the  grantee 

o  i 

and  that  the  other  heirs  may  testify  in  the  suit  as  to 
personal  transactions  with  the  deceased.2 

A  widow  cannot  sue  in  chancery  to  have  her  husband's 
lands  sold,  her  dower  right  satisfied,  and  the  balance 
applied  to  creditors;3  nor  can  a  widow  who  has  know- 
ingly joined  in  a  fraudulent  deed  maintain  a  bill  to  set 
the  transfer  aside.4 

§  122.  Husband  and  wife. —  The  relationship  of  husband 
and  wife  assumes  considerable  prominence  in  our  subject, 
and  will  be  specially  treated  We  may  here  observe  that 
a  husband  compelled  to  pay  ante-nuptial  debts  of  his  wife 
becomes  her  creditor,  and  as  such  is  entitled  to  set  aside 
fraudulent  conveyances  made  by  her  in  contemplation  of 
marriage  ;5  so  also  a  wife  may  attack  conveyances  exe- 
cuted by  her  husband  with  intent  to  defeat  her  right  of 
dower  which  was  about  to  attach,6  or  pending  an  action 
for  support,7    and    is,  when    a   creditor  of    the    husband, 


1  Ware  v.  Galveston  City  Co.,  Ill  multiplicity  of  suits,  and  accumula- 

U.  S.  170,  4  S.   C.   Rep.  337.     In  Mc-  tion  of  costs,  which,  where  the  cred 

Call,   Adm'r,  v.   Pixley,  48  Ohio  St.  itors  are   numerous,    is  a    matter  of 

379,  388,  27  N.  E.  Rep.  887,  the  court  importance." 

says  :"  The  statute  which  permits  the  2  Smith    v.   Meaghan,   28   Bun     V 

sale,   by  an    administrator,   of   lands  Y.)    423:    Ho  bar  I    v.    Bobart,   62    N. 

which  his  intestate  had  conveyed   in  Y.  80. 

fraud  of  creditors,  was  not  designed  for  Bull  v.  Hull,  26  W.  Va    I. 

the  benefit  of  the  heirs,  or  distributees  ;  Barnes  v.  Gill,  21  111.  App.  129. 

of  the  estate.     It  was  enacted  solely  5  Wester  man     v.     Westerman,    25 

in  the  interest  of  the  creditors,  whose  Ohio  St     500;  affi'g  9  Am.  Law   Reg. 

remedy  it  advances,  by  enabling  the  (N.  S.)  690. 

administrator  to  accomplish  in  a  sin-  ''  See  §  70  ;  also  <  hap.  XX. 

gle  proceeding,  what  formerly  might  '  Tyler  v.   Tyler,   126  111.  525,  21    X. 

require  many  actions,   thus  avoiding  E.  Rep.  616. 


-44 


T(  IRT   CREDITOR. 


12 


entitled  to  file  a  creditor's  bill.1  "It  seems  to  be  well 
settled  that,  pending  a  divorce  suit,  a  wife  asserting  a 
just  claim  for  alimony  is,  within  the  meaning  of  statutes 
prohibiting  fraudulent  conveyances,  to  be  deemed  a 
creditor."  ~ 


^  123.  Tort  creditor. —  A  right  to  damages  arising  from  a 
tort  is  within  the  protection  of  the  statute  13  Eliz.  ch.  5,3 
and  a  conveyance  made  to  defeat  such  right  will  be  set 
aside.1  If  the  intent  was  in  part  to  evade  fines  upon 
criminal  prosecution,  and  also  to  evade  the  payment  of 
any  judgment  which  might  thereafter  be  obtained  in  the 
civil  action,  the  conveyance  would  be  wholly  fraudulent. 
It  cannot  be  upheld  in  part  and  avoided  in  part.5  Hence 
it  has  been  decided  that  an  action  at  law,  although  in  viale- 
ficio,  is  within  the  meaning  of  the  statute  which  protects 
"creditors  and  others"  against  conveyances  made  to 
defraud  them  of  their  just  and  lawful  actions,  suits,  debts, 


1  Houseman  v.  Grossman,  177  Pa. 
St.  MS3,  35  At!.  Rep.  7:J6  ;  Chase  v. 
Chase.  105  Mass.  385. 

•I, nit  v.  Kaiser,  61  Tex.  665, 
67::,  citing  Feigley  v.  Feigley,  7  Md. 
538;  Clagetl  v.  Gibson,  3  ('ranch. 
C.  C  359;  Boils  v.  Boils,  1  Goldw. 
(Tenn. )  285;  Morrison  v.  Morrison, 
19  X.  II.  69;  Turner  v.  Turner,  44 
A  la  438  ;  Brooks  v.  i  Jaughran,  3 
Head  (Tenn.)  165;  Bouslough  v. 
Bouglough,  68  Pa.  St.  495  ;  Frakes  v. 
Brown,  'J  Blackf  (Ind.)  295.  Bui  see 
Fein  v.  Fein,  :;  Wyoming,  163,  13 
I 'a-.  Rep.  7'.». 

Posl  v.  Stiger,  29  X  .1.  Eq.  558. 
See  Lillard  v.  McGee,  4  Bibb.  (Ky.) 
165  :  Jackson  \  Myers,  18  Johns.  I  X. 
■  Farnsworth  v  Bell,  5  Sneed 
(Tenn.  •■>-'\  ;  Langord  v.  Fly, 7  Humph. 
(Tenn.)  585  :  Walradl  v.  Brown,  '<  III. 


4  Scott  v.  Hartman,  26  N.  J.  Eq. 
DO;  Boid  v.  Dean,  48  N.  J.  Eq. 
203,  21  At  I.  Rep.  618,  citing  the 
text  ;  .Jackson  v.  Myers,  IS  Johns. 
(N.  Y.)  42.");  Clapp  v.  Leather- 
bee.  IS  Pick.  (Mass.)  138;  Fox  v. 
Hills,  1  Conn.  295;  Pendleton  v. 
Hughes,  65  Barb.  (N.  Y.i  136;  Barling 
v.  Bishopp,  29  Beav.  1 1 T  :  Shean  v. 
Shay,  42  End.  375  ;  Bongard  v.  Block, 
SI  III.  186;  Weir  v.  Day,  57  Iowa,  87; 
("order  v.  Williams,  40  Iowa,  582; 
Harris  v.  Harris.  23  Grafct.  (Va.)  737  ; 
Hoffman  v,  Junk,  51  Wis.  613,  8  X. 
W.  Rep.  493;  Westmoreland  v.  Pow- 
ell, 59  Ga.  256;  Prouty  v.  Prouty,  4 
Wash.  174,  29  Pac.  Rep.  1049  ;  Kain  v. 
Larkin,  I  App.  Div.  <N.  Y.)  209,38  N. 
Y.  Supp.  546.  Bui  compare  Evans  v. 
Lewi.,  30  Ohio  St.  II. 

Weir    v.    Day.   57    Iowa  87,    10    N. 
W.  Rep.  304. 


§§  124,    I25  OVERSEER    OF   THE    POOR.  2  | ; 

accounts,  damages,  penalties,  forfeitures,  and  demands.1 
The  judgment-creditor  in  an  action  of  trespass  has  a 
judgment  for  such  a  cause  of  action  as  justifies  his  attai  Ic- 
ing, in  some  form,  any  conveyance  made  by  the  defend- 
ant pending  the  suit,  as  being  fraudulent  against  him,  and 
should  not  be  prevented  by  injunction  from  putting  him- 
self into  such  a  position  that  he  may  have  the  question  of 
the  bona  fides  of  the  grantee's  purchase  tested  in  a  court 
of  law  and  before  a  jury  through  an  action  of   ejectment.2 

§  124.  Overseer  of  the  poor.  —  In  New  York  an  overseer 
of  the  poor  has  no  standing  in  court  before  judgment  to 
impeach  the  voluntary  deed  of  the  father  of  a  lunatic 
child,  upon  the  theory  that  the  conveyance  was  executed 
with  the  intention  of  imposing  the  burden  of  supporting 
the  son  upon  the  town.  It  seems  to  be  clear  that  an 
overseer  cannot  secure  equitable  relief  setting  aside  a 
fraudulent  transfer,  if  he  is  not  a  creditor  by  judgment 
or  by  simple  contract ;  and  no  liability  has  been  estab- 
lished in  his  favor,  by  adjudication  or  otherwise,  against 
the  alleged  fraudulent  grantor.5 

§125.  Creditors  having  liens.  —  A  conveyance  is  not 
considered  fraudulent  as  to  a  creditor  whose  debt 
is  secured  by  judgment  or  other  lien  upon  the  land 
transferred.  The  grantee  necessarily  takes  subject  to 
the  lien,  and   the    creditor  may  pursue    the  land   in    the 


1  Scott  v.  Hartman,  26  N.  J.  Eq.  90  ;      peal.C!    Pa.  St.  426  ;  M e  v.    Cord, 

Jackson  v.    Myers,  18   Johns.    (N.  V.)  14    Wis.    413;    Heywood   v.    (it\    of 

425.     See     Leukener     v.      Freeman,  Buffalo,    14    N.  5T.  539 ;  Townsend  v. 

Freem.  Ch.  Rep.  236;  Fox  v.    Hills,  Mayor  of   New  York,  77    X     V.    542; 

1  Conn.    295;  Barling   v.  Bishopp,  29  Van  Doren  v.  Mayor,  etc.  9  Paige  (N. 

Beav.  417.     See  §  110.  Y.)  388.     A  conveyance   made   !• 

3  Welti  e   v.  Scotten,  27   Alb.    L.    J.  cape  payment  of  fines  can  be  attacked 

337,  59  Md.  72.     See  Gebhart  v.    Mer-  by  the  State.     State   v.    Burkeholder, 

feld,  51  Md.  325  ;  Bockes  v.    Lansing,  30  W.  Va.  593,  5  S.  E.  Rep    t39 

74  N.   Y.    441;  Freeman    v.  Elmen-  3Bowlsby    v.    Tompkins,    18     Hun 

dorf,  7  N.  J.    Eq.   475;  Winch's  Ap-  (N.  Y.)  220. 


246 


PURCHASER    REMOVING    [NCUMBRANCES. 


126 


same  manner  as  if  it  had  been  conveyed  to  one  who  had 
purchased  in  good  faith  for  a  full  consideration.  He  may 
follow  the  land  irrespective  of  changes  in  the  title,  whether 
honest  or  dishonest.  A  judicial  sale  upon  his  lien  vests 
in  the  purchaser  the  title  which  the  debtor  had  when  the 
lien  attached,  and  of  course  divests  the  title  of  the 
debtor's  grantee.  The  creditor,  therefore,  stands  in  no 
need  of  aid  from  a  court  of  equity  to  revoke  the  debtor's 
transfer.1  This  question  was  considered  in  Armington 
v.  Rau,2  in  which  Haak's  Appeal3  was  cited  with 
approval,  and  the  court  further  said  :  ''  The  debtor  con- 
veys subject  to  the  lien.  He  has  a  right,  upon  such  con- 
dition, to  sell  or  give  away  his  land,  and  if  he  does  so 
fraudulently,  the  grantee's  title  is  good  against  all  the 
world,  except  creditors  and  persons  intended  to  be  hin- 
dered, delayed  or  defrauded.  A  prior  lien  creditor  is  not 
such  person.  The  conveyance,  whether  bona  fide  or 
fraudulent  as  respects  creditors  who  have  no  liens,  is 
no  obstruction  or  hindrance  to  the  enforcement  of  pay- 
ment of  the  prior  lien." 

§  126.  Purchaser  removing  incumbrances.  —  A  purchaser 
at  execution  sale  takes  the  creditor's  right  to  avoid  all 
fraudulent  conveyances  and  incumbrances,1  and  may  file 
a   bill   in   equity  for  that   purpose.5      A  creditor  who  has 


Haak's    Appeal,    LOO   Pa.   St.   62  ; 
Zuver  v.  (lark.  104  Pa.  St.  326. 
LOO  Pa.  St.  L68. 
LOO  Pa.  St.  62. 

1  ish  v.    Mace,    'J  ( Jray    |  Mass.  ) 

Orendorf  v.    Budlong,   12   Fed. 

Rep.  .'I  :  Hildretb  v.  Sands,  -,'  .(..litis. 
el..  (N.  Y.)  35  :  Besl  v.  Staple,  61  N. 
Y.  78 ;  ( iallniaii  \ .  Perrie.  17  Miss. 
L31.      <  Iliief  Justice  Sherwood   sai.l  : 

■■  Tli.-  law  is  well  -,.-tt  Led  in  tliis  State 

that,  where  a  debtor  conveys  liis  la  ml 
with  tin-  fraudulent  design  above 
mentioned,  a  resulting  trust  is  thereby 


created  in  favor  of  his  creditors,  and 
is  the  subject  of  execution  sale    Ami 

it  Is  equally  well  settled,  that  a  pur- 
chaser    at    such    sale    will   occupy    as 

advantageous  a  position  as  t  hough  lie 
were  a    creditor,   when     proceeding 

to  set  aside  the  debtor's  conveyance 
..11  the  -round  of  fraud."  1,'ylaml  v. 
Callison,  Til  .Mo.  r>14. 

(e.uld  v.  Steinburg,  84  111.  170. 
See  Hoxie  v.  Price.  :!1  Wis.  82-89. 
It  appeared  in  this  action  that  a  deed 
of  lands  from  defendant  to  a  third 
person,    and    from    him    hack    to    the 


§   127 


CREDITORS   l  »PP<  (SING    WILL. 


obtained  judgment  and  issued  execution,  may  seize  and 
sell  the  property  of  his  debtor,  and  try  the  title  of  any 
one  who  sets  up  a  prior  lien  or  incumbrance  affected  with 
usury.1  So  a  conveyance  of  property  gives  to  the 
grantee  or  assignee  the  right  to  tile  a  bill  to  annul  a 
previous  invalid  conveyance  made  by  the  same  grantor,2 
and  a  judgment-creditor  may  compel  the  cancellation  of 
prior  judgments  against  the  debtor  upon  the  ground  that 
they  have  been  paid.3 

§  127.  Creditors   opposing  will.— As    a    general    rule    no 
creditor  has  the  right  to  oppose  the    probate  of   a  will.4 


wife,  and  a  patent  of  certain  other 
lands  to  the  wife,  were  considered  as 
fraudulent  and  void  as  to  the  hus- 
band's creditors.  A  purchaser  of  the 
land,  at  execution  sale  under  a  judg- 
ment against  the  hushand,  and  before 
becoming    entitled    to    the    sheriff's 

d 1,  brought  a  suit  to  set  aside  the 

wife's  deed  and  patent  and  to  restrain 
her  from  incumbering  the  land.  The 
suit  was  upheld  upon  the  theory  that 
the  wife,  by  alienating  or  incumbering 
the  land  to  a  bona  fide  purchaser  or 
mortgagee,  would  absolutely  defeat 
complainant's  equitable  rights.  See 
Avery  v.  Judd,  21  Wis.  '362  ;  Phalen 
v.  Boylan,  23  Wis.  679  ;  Wood  v. 
Chapin,  13  N.  Y.  509.  In  Remington 
Paper  Co.  v.  O'Dougherty,  81  N.  Y. 
481.  the  complainant  was  an  execu- 
tion purchaser ;  the  time  for  re- 
demption had  expired  as  to  the 
debtor  but  not  as  to  other  creditors. 
The  purchaser  was  held  to  be  pos- 
sessed of  an  inchoate  title  and  equi- 
table interest  sufficient  to  maintain  an 
action  for  the  cancellation  of  instru- 
ments or  incumbrances,  which,  within 
the  doctrine  of  courts  of  equity,  are 
considered  as  clouds  upon  title.  See 
Hager  v.  Shindler,  29  Cal.  4S  ;  Wag- 
ner v.  Law,  3  Wash.  St.  500,  28  Pac. 
Rep.  1109,  29  Id.  927.  In  Mulock  v. 
Wilson,  19  Col.   302,  35  Pac.  Rep.  532, 


the  court  says:  "A  judgment-creditor 
desiring  to  set  aside  a  supposed 
fraudulent  deed  of  real  estate  may 
bring  his  action  therefor  to  test  the 
validity  of  the  deed  before  attempting 
to  subject  the  premises  to  execution 
sale;  or  the  purchaser,  after  such  sale, 
may  bring  his  action  to  remove  tin- 
cloud  from  the  title  by  cancelling  the 
supposed  fraudulent  deed,  and  to  re- 
cover possession  of  the  premises  " 
See  Stock-Growers'  Bank  v.  Newton, 
13  Col.  249,  22  Pac.   Rep.  444. 

1  Dix   v.  Van  Wyck,  3  Mill  (N.  Y.) 
525;    Mason    v.    Lord,   40  X     Y.     186 
See  Post  v.  Dart,  8  Paige  (N    Y     639 
reversed,  7  Hill  (N.  Y.)  391  ;  Thomp- 
son v.  Van  Vechten,  27  N    Y.  568 

"  McMahon  v.  Allen.  :;:.  N.  Y.  103  . 
See  Dickinson  v.  Burrell,  I.  I.'  l  I'm 
337.  Put  compare  <  lockell  v.  Taj  lor, 
15  Beav.  103;  Anderson  v.  Radcliffe, 
D.  B.  &  E.  806  ;  Milwaukee  ,y  M.  R. 
R.  Co.  v.  Milwaukee  cV  W  R  R  Co., 
20  Wis.  174  :  Prosser  v.  Edmonds,  1 
Y.  &  C.  481  ;  French  v.  Shotwell,  5 
Johns.  Ch.  tX.  Y.i  555  ;  especially, 
Graham  v.  Railroad  Co  .  102  D  S. 
1 56. 

•  Shaw  v.  Dwight,  37   X.  Y.  311. 

1  Menzies  v.  Pulbrook,  2  I  lurteis, 
845;  Heilman  \ .  Jones,  5  Redf.  N. 
V.)  398  :  Elme  v.  Da  Costa,  1  Phillim. 
173. 


24K  CESTUI    QUE    TRUST.  §  127a 

The  right  of  contest  is  limited  to  the  heirs  at  law  and 
next  of  kin.1  It  may  be  here  observed  that,  in  Fisher  v. 
Bassett, 2  it  is  said  that  no  debtor  of  an  estate  could  be 
allowed  "  to  plead  nc  ungues  administrator  in  bar  of  an 
action  for  the  recovery  of  a  debt  due  to  the  estate  The 
greatest  confusion  and  mischief  would  ensue  if  such  were 
the  law ;  for  then,  wherever  delay  was  desired,  every 
debtor  would  deny  the  jurisdiction,  and  arrest  the 
recovery  of  a  just  debt,  by  embarrassing  inquiries  as  to 
the  decedent's  domicil  or  the  place  of  his  death."  :i 

§  127a.  Cestui  que  trust. — A  cestui  que  trust  is  not 
required  to  establish  his  claim  by  an  action  at  law  where 
he  seeks  an  enforcement  of  the  trust  or  desires  to  pro- 
tect the  trust  property  from  unlawful  interference.4 


Taff  v.  Hosmer,  14  Mich.  249.  (N.  Y.)  392;  Drexel  v.  Berney,  1  Dem. 

2  9  Leitfl)  (Va.)  133.  (N.  Y.)  163. 

'See   Fosdick   v.  Delafield,  2  Redf.  4  Spelman  v.   Freedman,    130  N.  Y. 

421,  29  N.  E.  Rep.  765. 


CHAPTER   VIII. 


PARTIES    DEFENDANT. 


§  12tf.  Debtor  as  defendant  in  credit- 
ors' actions. 

129.  When  debtor  not  necessary  de- 

fendant. 

130.  Defendants  need  not  be  equally 

guilty. 
181.   Fraudulent  assignee  or  grantee 

must  be  joined. 
132.  Joining  defendants. 
132a.  Conveyance  pending  suit. 
1326.  Bringing  in  representatives. 


jj  133.  Assignee    and    receiver  as  de- 
fendant. 
L33a.  Suing  directors 

134.  Objection   as  to  non-joinder  — 

How  raised. 

135.  Misjoinder  <>f  causes  of  action. 

136.  Executors,  administrators,  heirs 

and  legatees. 

137.  Trustee  and  cestui  que  trust. 

138.  Party  having  lien. 

139.  Stockholders. 


§  128.  Debtor  as  defendant  in  creditors'  actions.— The 
doubts  and  difficulties  incident  to  the  selection  or  joinder 
of  proper  parties  in  creditors'  suits  are  not  restricted  to 
complainants  as  a  class,  but,  on  the  contrary,  cases  of 
alleged  misjoinder  and  non-joinder  of  defendants  are  fre- 
quently up  for  adjudication  in  different  forms.  The 
general  rule  certainly  is  that  all  persons  whose  interests 
are  directly  to  be  affected  by  a  suit  in  chancery  must  be 
made  parties,1  in  order  to  give  finality  to  litigation.8 
The  general  proposition  that  all  persons  participat- 
ing in  making  a  fraudulent  conveyance  are  proper 
parties  to  a  suit  to  set  the  transfer  aside  may  be 
accepted. 3      "  It  is  a  general  rule  that  all  parties  inter 


1  Christian  v.  Atlantic,  etc,  R.  R.  Co. 
133  U.  S.  241,  10  S.  C.  Rep.  260; 
Shields  v.  Barrow,  17  How.  130,  139  ; 
Ribon  v.  Railroad  Co's.,  16  Wall.  446  ; 
Williams  v.  Bankhead,  19  Wall.  563  ; 
McArthur  v.  Scott,  113  U.  S.  340,  5 
S.  C.  Rep.  052;  Green  v.  Mill  .aide,  3 
Abb.  N.  C.  (N.  Y.)  156;  Lynchburg 
Iron  Co.  v.  Taylor,  79  Va.  671. 


-First  National  Hank  v.  Schuler, 
153  N.  Y.  170. 

8Miller  v.  Jamison,  24  N.  J.  Eq.  41. 
Swan  Land  &   Cattle   Co.    v.    Frank, 

I  is  c.  S.610,  13S.C.  Rep. 691  ;  W I 

v.  Sidney  Sash,  etc.  Co.,  92  Bun  (N. 
Y.)35  :  37  N.  Y.  Supp  B85  Watts  v. 
Wilcox.  22  Civ.  Pro.  (X.  Y.  164,  L8 
\     Y.   Supp.   192 ;    Welsh  v.    Solen- 


; 


I 'I-  BTOR   AS    DEFENDAN  I. 


§   128 


ested  in  a  controversy,  or  who  may  be  affected  by  a 
decree  rendered  therein,  should  be  made  parties  ;  all  who 
are  nominally  or  really  interested  may  therefore  be  joined 
although  the  interests  of  all  may  not  be  affected  alike  by 
the  relief  which  may  be  granted."1  The  burden  of  secur- 
ing the  presence  of  the  necessary  parties  rests  upon  the 
plaintiff.8  Let  us  briefly  look  through  the  authorities. 
The  question  of  the  necessity  of  joining  the  grantor 
or  debtor  as  a  party  defendant  in  an  action  brought 
by  a  creditor  to  secure  a  discovery  of  assets,  or 
cancel  a  fraudulent  conveyance,  is  involved  in 
some  obscurity  and  confusion,  and  the  authorities 
relating  to  the  subject  must  be  carefully  distinguished 
and  classified.  Prof.  Pomeroy  says,3  that  "  in  an  action 
by  a  judgment-creditor  to  reach  equitable  assets  of  the 
debtor  in  his  own  hands,  or  to  reach  property  which  has 


berger,  85  V.-i.  444,  8  S.  E.  Rep.  91  ; 
Mahler  v.  Schmidt,  43  Hun  (N. 
V. )  "314.  In  Mahr  v.  Norwich  Union 
Fire  Ins.  Soc,  127  N.  Y.  460,  28  N. 
K.  Rep.  391,  the  court  say:  "There 
is  an  essential  difference  between  the 
practice  at  law  and  in  equityin  deter- 
mining who  are  proper  and  necessary 
parties.  Story,  in  his  work  on  Equity 
Pleadings  (§  72),  says  that  two  gen- 
eral principles  control  courtsof  equity 
in  this  respect  :  I.  That  the  rights  of 
in.  man  Bhall  l»e  finally  decided  unless 
he  himself  is  present,  or  at  least  lias 
had  a  lull  opportunity  to  appear  and 
vindicate  his  rights  :  2.  That  when 
a  decision  is  made  upon  any  particu- 
iai    subject-matter,  the   rights  of  all 

persons  whose  interests  are  imi li- 

ately  connected  with  thai  decision 
and  affected  by  it,  -hall  be  provided 
for  as  far  as  they  reasonably  may  be. 
The  learned  author  adds  :  '  It  is  I  he 
'■"ii^tant  aim  of  courts  of  equity  to  do 
complete  justice,  by  deciding  upon 
and  settling  the  rights  of  all  persons 


interested  in  the  subject-matter  of  the 
suit,  so  that  the  performance  of  the 
decree  of  the  court  may  be  perfectly 
safe  to  those  who  are  compelled  to 
obey  it,  and  also,  that  future  litigation 
may  be  prevented.'  As  Lord  llard- 
wicke  once  said,  all  persons  ought  to 
be  made  parties  who  are  necessary  to 
make  the  determination  complete  and 
to  quiet  the  question  (Poore  v.  Clark, 
2  Atk.  515).  Not  only  all  persons 
whose  rights  may  be  affected  by  the 
judgment  should  be  brought  into 
court,  but  all  whose  presence  is  essen- 
tial to  the  protection  of  any  party  to 
the  action  (Gray  v.  Schenck,  -1  N.  Y. 
460;  Russell  v.  Clark,  7  Cranch,  69, 
98;  Picquet  v.  Swan,  5  .Mason,  561  ; 
Fell  v.  Brown,  2  Brown's  ( !h.  218)." 

1  Raynor  v.  Mintzer,  <',;  Cal.  164, 
7  I'ae.  Rep.  431. 

-  .Mahr  v.  Norwich  Union  Fire  Ins. 
Soc,  127  N.  Y.  452,  SH  N.  E.  Rep.  391. 

'Pomeroy  on  Rei lies  and  Re- 
medial Rights,  .s'  347. 


§  128  DEBTi  IR    A.S    DEFENDAN  l  .  25  I 

been  transferred  to  other  persons,  or  property  which  is 
held  by  other  persons  under  such  a  state  of  facts  that  the 
equitable  ownership  is  vested  in  the  debtor,  the  judg- 
ment-debtor is  himself  an  indispensable  part)-  defendant, 
and  the  suit  cannot  be  carried  to  final  judgment  without 
him."  This  statement  of  the  matter  is,  as  we  shall  presently 
see,  entirely  too  general  and  sweeping.  In  New  York  the 
necessity  for  making  the  debtor  a  party  defendant  is  made 
to  depend  upon  the  nature  of  the  particular  proceeding. 
In  Miller  v.  Hall1  the  action  was  brought  to  have  an 
assignment  of  a  bond  and  mortgage  made  by  the  debtor 
to  the  defendant  declared  fraudulent  and  void  as  to  cred- 
itors. The  New  York  Court  of  Appeals  held  that  it  was 
well  settled,  in  the  case  of  a  creditors'  bill  to  reach  a 
chose  in  action,  which  was  the  character  of  the  suit  in 
question,  the  judgment-debtor  was  a  necessary  party. 
The  earlier  authorities  show  that  the  practice  of  joining 
the  debtor  prevailed.2  In  Shaver  v:  Brainard3  the  action 
was  in  the  nature  of  a  creditors'  bill  brought  by  a  receiver 
to  set  aside  a  conveyance  of  real  estate  as  fraudulent,  and 
apply  the  proceeds  upon  the  plaintiff's  judgment.  The 
grantor  and  judgment-debtor  was  not  made  a  party 
defendant,  and  the  judgment  was  reversed  for  that  reason.4 
In  another  case,  where  a  receiver  filed  a  bill  against  a 
trustee  of  the  debtor  to  reach  equitable  interests  of  the 
latter  in  a  trust  fund,  tjie  debtor  was  declared  to  be  a 
necessary  party.5      In    Haines  v.   Hollister11   the   assignee' 

'70  N.    Y.   252;   below,    40   N.    Y.  3  29  Barb.  (N.  Y.)  25. 

Supr.  Ct.  266;  Sprague  v.  Cochran,  4See  Allison  v.    Weller,  ::   Hun  (N. 

84  Hun  (N.    Y.)  240,  32  N.  Y.   Supp.  V.)  603,  affi'd  W  X.  Y.  61  I  ;   North   v. 

570;  Hubbell  v.  Merchants'  Nat.  Bk.  Bradway,  !>  Minn.  183. 

42  Hun  (N.  Y.)  200.  B  Vanderpoel    v.  Van  Valkenburgh, 

5  Ednieston  v.  Lyde,  1  Paige  (N.  Y.)  6  N.  V.  L90.     See  Voorhis  v.  Gamble, 

637  ;  Boyd  v.  Hoyt,  5  Paige  (N.  Y.)  65 ;  6  Mo.   App.   1:  Lawrence  v.    Bank  of 

Fellows   v.  Fellows,  4  Cow.  (N.   Y.)  the  Republic,  35  X.  Y.  320  :  Beai'dslej 

682;  Bobb  v.  Bobb,  8  Mo.  App.  259;  Scythe  Co.   v.    Foster,  36   X    Y     561  ; 

Greenjv.  Hicks,  1  Barb.  Ch.  (N.Y.)309.  .Miller  v.  Hall,  70  X.  Y.  252 

See  Wallace  v.  Eaton,  5  How.  Pr.  (N.  '  M  X    Y.  1. 
Y.)99. 


DEBTOR    AS    DEI  ENDANT.  §   [28 

of  an  insolvent  firm,  the  personal  representatives  of  a 
deceased  partner,  and  the  surviving  partners,  were  held 
to  be  properly  joined  in  a  creditors'  action  to  compel  an 
accounting  by  the  assignee,  and  to  recover  of  the  repre- 
sentatives the  balance  of  the  plaintiffs'  claims.1  In  Law- 
rence v.  Bank  of  the  Republic2  the  court  observed:  "  In 
a  creditors'  suit  against  a  judgment-debtor  to  set  aside  a 
prior  assignment  made  by  him  in  trust  for  the  benefit  of 
creditors,  on  the  ground  of  fraud,  he  is  a  necessary  party. 
Indeed  he  must  be  deemed  the  principal  party,  otherwise 
different  persons,  claiming  portions  of  the  assignee's 
property,  could  not  be  joined  as  defendants.  The  com- 
mon point  of  litigation  is  the  alleged  fraudulent  transfer 
of  the  property."  3  The  controversy  is  over  the  debtor's 
single  scheme  to  defraud  creditors  consummated,  it  may 
be,  by  several  acts.4  The  case  of  Gaylords  v.  Kelshaw  r> 
is  sometimes  cited0  as  an  authority  for  the  proposition 
that  in  any  form  of  action  to  annul  a  conveyance  as 
fraudulent  the  debtor  must  be  summoned.  The  court 
said  that  the  debtor  was  properly  made  defendant  to  the 
suit,  as  it  was  a  debt  which  he  owed  which  the  creditor 
sought  to  collect,  and  it  was  his  insolvency  that  was  to  be 
established,  and  his  fraudulent  conduct  that  required 
investigation.  It  was  expressly  held,  however,  that  it  was 
not  necessary  to  decide  whether  the  suit  could  proceed 
without  him,  because,  as  matter  of  fact,  he  had  been  found 
in  the  district  and  had  answered  the  bill.  Miller,  J.,  said  : 
"  It  is  simply  the  case  of  a  person  made  a  defendant  by 


'Compare  Wells   v.   Knox,  17  Civ.  Mahler  v.  Schmidt,  43  Hun  (N.  Y.) 

Pro.   (N.   Y.,   59,   J   N.   Y.  Supp.   45;  514;  Graves  v.  Corbin,  132  IT.  S.  586, 

Murray  v.  Fox,  39  Hun  (N.  Y.)  ill.  10  S.  C.  Rep.  196. 

•    Y  324.  I    Wall.    81;     Judson    v.    Courier 

8e   Beardsley  Scythe  Co.  v.  Foster,  Co.,  25  Fed.  Rep.  708  ;    Swan  Land  & 

36  V  Y  566;  Bradner  v.  Holland,  83  Cattle  Co.  v.  Frank,  148  D".  S.  610,  13 

Hun    \    5  s.  C.  Rep.  691. 

•  Wood   v.  Sidney  Sash,  etc.  I  !o.,  92         '  See  Taylor  v.  Webb,  54  Miss.  42. 
1 1 'in  ■ N    Y)  26,  37  X.  V.  Supp.  885; 


§129  DEBTOR    NO!     NECESSARY     DEFENDANT. 

the  bill,  who  is  also  a  proper  [the  court  did  not  sa\  nei 
sary]  defendant,  according  to  the  principles  which  govern 
courts  of  chancery  as  to  parties,  and  who  has  been  served 
with  process  within  the  district  and  answered  the  bill  ;  but 
whose  citizenship  is  not  made  to  appear  in  such  a  manner 
that  the  court  can  take  jurisdiction  of  the  case  as  to  him." 
A  corporation  is  a  necessary  party  to  a  creditors'  bill 
against  officers  or  stockholders  who  have  divided  the 
assets  among  themselves.1 

In  an  action  for  unpaid  subscriptions  a  judgment-ci editor 
may  join  all  the  stockholders,  or  if  they  are  too  numerous 
he  should  so  allege  in  the  bill  ;~  and  the  corporation  may 
be  joined.3  In  a  suit  to  set  aside  as  fraudulent  a  trust 
deed  giving  preferences  to  creditors,  the  beneficiaries 
should  be  parties,4  and  as  we  have  seen,  the  debtor  must 
be  joined  in  a  creditor's  suit  brought  to  impeach  and  set 
aside  a  general  assignment.5 

§  129.  When  debtor  not  necessary  defendant. —  Fox  v. 
Moyer6  is  an  illustration  of  a  case  in  which  the  debtor  is 
not  a  necessary  party  defendant '     The  plaintiff  was  a  judg- 


1  Deerfield    v.  Nims,    110  Mass.  115.  915;    and    compare     First      National 

See  Swan  Land  &  Cattle  Co.  v.  Frank,  Bank  v.  Shuler,   153  N.  V.   170;  Buf- 

148  U.  S.  610,  13  S.  C.  Rep.  691.  fington  v.  Harvey,  95  I'.  S.  103. 

2Adler  v.  Milwaukee  Patent  Brick  '  See  Hickox  v.  Elliott,  22  Fed.  Rep. 

Mfg.  Co.,  18  Wis.  57  ;  Vick  v.  Lane,  56  20,  citing  the   text.     The  courl  say: 

Miss.  681;    Wetherbee   v.   Baker,   35  "  So  far  as  Ben  Holladay  is  concerned, 

N.  J.  Eq.  501  ;  Holmes  v.  Sherwood,  his  indebtedness  to  the  assignor  of  the 

3  McCra.  405;  Bronson  v.  Wilming-  plaintiff  is  established  by  the  decree, 

ton,  N.  C,  Life  Ins.  Co.,  85  N.  C.  41  I.  and  is  no  longer  open  to  controversy  . 

3  Wetherbee  v.  Baker,  35  N.  J.  Eq.  and  the  transfers  and  conveyances  in 
501  ;  Perkins  v.  Sanders,  56  Miss.  733  :  question  are  good  against  him,  and 
Patterson  v.  Lynde,  112111.  196  ;  Tay-  can  only  be  avoided  at  the  suil  of  a 
lor  on  Corps.,  ^  704.  creditor.    He  lias,  then,  do  interesl  in 

4  Simon  v.  Ellison,    90  Va.   157,   IT  this  controversy.     Bisindebtedni 

S.  E.  Rep.  836.  fixed,  and  the  property  sought  to  be 

5  First  National  Bank  v.  Shuler,  affected  has  passed  beyond  his  eon- 
ISSN.  Y.  168.  trol,  and  he  cannot  be  prejudiced,  in 

6  54  N.  Y.  130.  See  Leonard  v.  any  legal  sense,  by  a  decree  which 
Green,  34  Minn.   140,  24  N.  W.  Rep.  may  subject  it  to  the  paymenl  of  his 


254 


DEBTOR    NOT    NECESSARY    DEFENDANT. 


§  *29 


ment-creditor  with  execution  returned  unsatisfied.  He 
claimed  that  his  judgment  was  a  lien  upon  certain  real 
estate  which  one  of  the  judgment-debtors  had  fraudulently 
conveyed  to  the  defendant,  and  he  commenced  this  action 
to  have  the  cloud  resting  on  the  lien  of  his  judgment 
removed,  and  to  have  his  judgment  satisfied  out  of  this  land, 
notwithstanding  the  conveyance.  Earl,  C,  in  delivering 
the  opinion  of  the  New  York  Commission  of  Appeals, 
said  :  "The  conveyance  was  good,  as  between  the  parties 
thereto,  and  hence  no  one  had  any  interest  to  defend  this 
suit  but  the  defendant,  and  he  was  therefore  the  only  proper 
party  defendant."  J  Fox  v.  Moyer  was  relied  upon  by  the 
plaintiff's  counsel  in  Miller  v.  Hall2  as  controlling,  but  the 
Court  of  Appeals  said  that  the  former  case  was  not  a  cred- 
itors' bill,  and  was  plainly  to  be  distinguished  from  the 
other  cases  which  we  have  noticed.  In  Burlington  v.  Har- 
vey3 it  was  urged  that  the   assignee's  bill  was  defective 


debts. 

Linson 

Bump, 

Fraud. 

Mover, 


///  re  Kstr-s,  (»  Sawy.  4o9  :  Col- 

v.  Jackson,  8  Sawy.  365; 
Fraud.     Conv.    548;     Wail, 

Conv.    i=s;  129,     171  ;    Fox    v. 

■11  N.  Y.  128.  Tt  follows  that 
while  Hen  Holladay  is  a  proper  party 
to  tin-,  suit,  he  is  not  a  necessary  one 
and  might  have  been  omitted  from 
Ihebill.  And  Ins  agents  and  trustees, 
who  conveyed  this  property  to  Joseph 
Holladay  under  his  direction,  have 
less  interest  in  the  suit,  or  the  subject- 
matter  of  it,  if  possible,  than  he  has. 
As  against  them,  also,  the  convey- 
ances an-  good.  They  passed  the 
legal  title  to  Joseph  Holladay.  These 
parties  have  no  longer  any  Interest  in 
the  property  or  power  over  it.  No 
relief  i-  sought  against  them,  and  they 
cannot  !»•  prejudiced  by  anj  decree 
thai  maj  be  given  in  the  3uit.  The 
of  (ia\  lords  \  .  Kelshaw,  i  Wall. 
sl .  cited  by  counsel  for  Joseph  Holla- 
day, decides  nothing  tot  he  '-out  rary 
of  tin-.     K.  Idiau .  being    the  debtor 


ami  grantor  in  the  alleged  fraudulent 
conveyance,  was  a  proper,  although 

not  a  necessary,  party  in  that  case. 
I'nt,  being  made  a  party  defendant, 
without  any  averment  as  to  his  citi- 
zenship, it  did  not  appear  that  the 
court  had  jurisdiction.  Accordingly, 
the  case  was  remanded,  with  leave  to 
the  plaintiffs  to  amend  their  bill  gen- 
erally, which  they  might  do  by  alleg- 
ing the  citizenship  of  Kelshaw,  if  it 
was  sufficient  to  give  the  court  juris, 
diction,  or  by  omitting  his  name  from 
the  hill.  The  general  ride  is  that  no 
person  need  he  made  a  party  t<>  a  suit 
who  has  no  interest  in  it.  and  against 
whom  not  hing  i-  demanded." 

'See    Campbell   v.  Jones,  25  Minn 
155  :  Bomar  v.  Means,  ■'.:  S.  < '.  .VJO,  16 
S.   K.    Rep.   537  ;  Blanc  v.  l'a\  master 
Mining  Co.,  95  Cal,  524,  30  Pac.  Rep. 
765. 

It)  N.  V 
\  .  252. 
95  r.  s. 


Supr.  Ct.  268,  affi'd  in  V 


io:j. 


§129  DEBTOR    MM     NECESSARY     DEFENDANT.  -55 

because  the  bankrupt  was  not  joined.  Bradley,  [.,  after 
remarking  that  the  bankrupt  had  no  interest  to  be  affected 
except  what  was  represented  by  the  assignee,  said  :  "As  to 
the  bankrupt  himself  the  conveyance  was  good  ;  if  sel  aside 
it  could  only  benefit  his  creditors.  He  could  not  gain  or 
lose,  whichever  way  it  might  be  decided."  '  In  Potter  v. 
Phillips?  the  court  said  that  though  the  debtor  was  a  proper 
party,  it  did  not  see  why  he  was  to  be  regarded  as  a  neces- 
sary party  ;  whether  the  conveyances  were  fraudulent  or  in 
good  faith  the  property  irrevocably  passed  beyond  his  con- 
trol. He  could  be  prejudiced  in  no  way,  in  a  legal  sense, 
by  a  determination  which  subjected  the  property  to  the 
payment  of  his  debts.  So  it  was  decided  in  Minnesota 
that  where  a  creditor  sold  land  which  the  debtor  had  fraud- 
ulently alienated,  the  fraudulent  grantee  might  bring  an 
action  against  the  purchaser  to  determine  his  title  without 
brineine  in  the  fraudulent  crrantor.3  It  is  remarked  in 
some  of  the  cases  that  the  fraudulent  grantor  should  be 
joined  because  it  is  his  conduct  that  is  to  be  investigated. 
The  Supreme  Court  of  Mississippi  observe,  however,  that 
the  object  of  the  proceeding  is  to  reach  property,  not  char- 
acter. In  truth  the  proceeding  is  in  rem,  and  while  the 
complainant  may,  if  he  choses  so  to  do,  join  as  defendants 
all  who  are  connected  with  the  property,  or  the  transac- 
tions to  be  investigated,  he  is  only  compelled  to  join  those 
in  whom  the  legal  title  vests,  or  those  who  have  a  bene- 
ficial interest  to  be  affected.4  Cases  are  cited  in  conso- 
nance with  this  reasoning.' 


'Benton   v.  Allen,  2  Fed.  Rep  448;  v.  Paymaster  Min.  Co  .  95  Cal.  584,  30 

Weise  v.   Wardle,  L.  R.  19  Eq.  171  ;  Pac.  Rep.  765. 
Hickox  v.  Elliott,  22  Fed.  Rep.  20.  'Smith     v.    Grim,    26    Pa     St.    95; 

2  44  Iowa,  357;  Capital  City  Bank  Dockray  v.  Mason,  18  Me.  178;  Laugh- 
s'. Wakefield,  83  Iowa  48,  48  N.  W.  ton  v.  Barden,  68  Me.  209;  Merry  v. 
Rep.  1059.  Fremon,  H  Mo.  518;  Cornell  v.  Rad- 

^ Campbell  v.  Jones,  25   Minn.  155.  way.  22  Wis.  260.     See  Shaw  v.  Mill- 

<Tavlorv.  Webb  54  Miss.  36  :   Blanc  saps,  50  Miss.  380  ;  Jackman  v.  Robin- 
son, G4  Mo.  289. 


256  DEBTOR    NOT    NECESSARY    DEFENDANT.  §   I  J<j 

What  inference  then  is  to  be  deduced  from  this  mass 
of  authority,  and  which  class  of  cases  embodies  the  best 
log-ic  ?  Should  the  debtor  be  joined  as  a  defendant  in 
an  action  to  annul  a  fraudulent  transfer?  The  best 
reasoning  of  the  authorities  seems  to  establish  the  rule 
that  the  debtor's  presence  as  a  defendant  is  superfluous 
in  suits  brought  against  fraudulent  alienees  to  annul 
specific  covinous  conveyances.  The  transfer  is  conclu- 
sive upon  him,  and  hence  his  joinder  cannot  aid  the 
creditor,  or  benefit  the  debtor ;  the  suit  is  a  proceeding  in 
rem  to  clear  the  title  to  the  property  only  so  far  as  the 
creditor's  needs  may  require  ;  under  established  principles 
of  law  the  debtor  can  gain  nothing  by  it ;  he  is  practically 
a  stranger  to  the  property,  nor  can  he  be  prejudiced  by 
a  decree  which  applies  the  property  to  the  payment  of  a 
fixed  judgment  debt.  On  the  other  hand,  where  the  suit 
prosecuted  is  purely  a  creditors'  bill,  embodying  the 
elements  of  a  bill  of  discovery,  the  debtor's  presence 
would  seem  to  be  essential  to  the  jurisdiction  of  the 
court.1  The  practitioner  must  be  careful  to  distinguish 
between  an  action  instituted  to  reach  specific  property 
fraudulently  alienated,  and  a  suit  brought  to  discover 
equitable  interests  which  are  not  subject  to  execution, 
and  the  title  to  which  is  in  the  debtor.  In  the  latter  case 
the  debtor  must  of  necessity  be  a  defendant.  Especially 
should  the  complainant  make  the  debtor  a  defendant 
where  it  appears  that  parties  holding  separate  property 
under  distinct  conveyances  are  joined.  In  such  proceed- 
ings the  debtor  constitutes  the  king-pin  of  the  action.  In 
any  case  it  is  the  safer  and  more  prudent  practice  to 
summon  the  debtor  as  a  defendant,  for  a  vexed  question 
is    then    put    at    rest,  and    the    misfortune    similar  to  that 


Compare  Firsl   National  Bank  v.  Shuler,  153  N.  V.  174. 


§   130  DEFENDANTS    NOT    EQ1  AIM     G1   II   IN.  j;; 

which  overwhelmed  the  creditors'  representative   in    Mil- 
ler v.  Hall  !  will  be  averted.2 

§  130.  Defendants  need  not  be  equally  guilty  A.S  a 
general  rule  where  the  subject-matter  of  a  suit  is  real 
or  personal  property,  and  the  purpose  of  the  plaintiff  is  to 
set  aside  fraudulent  judicial  proceedings  in  reference  to  it, 
the  complainant  should  make  all  persons  parties  who 
were  actors  in  the  proceedings,  especially  if  they  claim  a 
present  interest  in  the  property  in  dispute.  A  complaint 
so  framed  is  not  demurrable  on  the  theory  that  there  is  an 
improper  joinder  of  several  causes  of  action  against 
different  persons  ;  on  the  contrary  it  is  regarded  as  a 
single  cause  of  action  affecting  all  the  defendants. 
Westcott,  J.,  in  delivering  the  opinion  of  the  Supreme 
Court  of  Florida,3  very  appropriately  says  :  "  It  is 
apparent  from  the  case  stated  that  all  of  the  defendants 
were  not  jointly  and  equally  concerned  in  each  distinct 
fraudulent  act  charged.  There  was  a  series  of  acts  in  this 
well-conceived  network  of  fraud,  all  terminating  in  tin- 
deception  and  injury  of  the  plaintiff.  The  defendants 
performed  different  parts  in  the  drama.  These  acts 
affected  the  property  of  the  debtor  —  some  the  personal 
property,  others  the  real  estate.  The  object  of  the  plain- 
tiff in  this  complaint  is  to  get  the  assistance  of  this  court 
in  unravelling  this  network  of  fraud  in  respect  to  each 
species  of  property,  and  to  have  a  due  application  of  the 
same  to  the  payment  of  the  claims  of  creditors.  1  he 
right  of  the  plaintiff  is  against  the  whole  property,  and  his 
right  against  all  portions  of  it  is  of  the  same  nature.     The 


1  70  N.  Y.  252.  against   whom  no  fraud   or  conceal- 

2  When  the  sole  design  of  a  bill  is  ment  is  imputed,  no  discovery  Bought, 
to  have  individual  property  of  one  and  no  ruling  asked,  is  neither  a  nec- 
partner  claimed  to  have  been  fraudu-  essary  nor  a  proper  party.  Randolph 
lently  alienated,  applied  in    payment  v.  Daly.  16  N.  J.  Eq.  315. 

of  a  firm  judgment,   another  partner  3  Howse  v.  Moody,  1  I  Fli 

1/ 


258  FRAUDULEN1     ASSIGNEE.  §131 

decree  in  chancery  and  the  sale  thereunder  are  but  acts  of 
fraud,  which  are  sought  to  be  set  aside  in  order  to  enforce 
this  general  riofht.  In  fact,  the  ri^ht  to  set  aside  these 
proceedings  can  only  coexist  with  an  equity  affecting  the 
property  which  was  the  subject  of  them.  There  can  be 
no  such  thing  as  an  equity  or  right  to  set  aside  these  pro- 
ceedings distinct  and  independent  of  rights  and  equities 
attached  to  the  subject-matter  that  they  affect.  The 
result  is  that  these  are  not  several  causes  of  action,  but 
are  acts  which,  connected  with  the  debt  due  plaintiff,  con- 
stitute a  ground  for  one  action  alone." 

§  131.  Fraudulent  assignee  or  grantee  must  be  joined.—  A 
judgment  as  a  general  rule  only  binds  parties  and  privies. 
As  the  property  which  is  the  object  of  pursuit  is  usually 
in  the  hands  of  a  transferee,  it  follows  that  such  person 
must  be  joined  as  defendant,  so  that  he  may  be  affected 
and  concluded  by  the  judgment.  The  proceeding  would 
be  futile  if  it  omitted  him.1  It  was  accordingly  held,  in 
a  case  where  a  creditors'  bill  was  filed  to  reach  moneys 
due  upon  a  mortgage  which  was  alleged  to  have  been 
fraudulently  assigned  by  the  debtor,  that  the  assignee  of 
the  mortgage,  although  he  resided  out  of  the  State,  must 
be  joined  as  a  defendant.2  It  is  the  plaintiff's  mis- 
fortune if  he  is  unable  to  secure  the  presence  of  the 
necessary  parties.3      Parties  to  intermediate  conveyances 


1  Sage  v.  Mosher,  28  Barb.  (N.  Y.)  (Va.)  15  ;    Jackman    v.    Robinson,  64 

287      In  Stillwell   \.    Stillwell,  IT   N.  Mo.  289  ;  Bamniond  v.  Budson  River 

J.  Eq.  275,  20   All.   Rep.    960,    it    was  1.  &  M     Co,    20  Bail ..    (N.    Y.)  379; 

held  that  where  a   decree  was  made  Copis    v.    Middleton,   2    Madd.    410; 

setting     aside     the     conveyance    as  Thornberry    v.    Baxter,   24    Ark.  7C  ; 

fraudulenl    to   which  the  fraudulent  Winslow  v.  Dousman,    18    Wis.   156; 

grantee  was  not  made  a   party,  and  a  Hamlin    v.     Wright,    23    Wis.    -491; 

sale   was   had   under  such  decree  an  Main-  v.    Norwich    Union    Fire    Ins. 

action    could     be     broughl    bi     the  Soc,  127  N.  Y.  461.  28  N.  E   Rep.  391. 

grantee  to  eel  aside  such  sale.  3  Mahr  v.  Norwich  Union  Fire  Ins. 

Gi             Schenck,    1    X     Y.    160.  Soc,  127  N.  Y.  452, 28  N.  E.  Rep.  391. 
richenor  \ .   Allen,  13  <  rral  t. 


§132  JOINING    DEFENDANTS. 

need  not  be  joined,1  nor  grantees  pendente  lite,  for  they 
stand  in  no  better  position  than  those  under  whom  they 
claim.  ~ 

In  a  suit  to  set  aside  a  fraudulent  conveyance  there  is 
no  necessary  inconsistency  in  averring  the  grantee  to  be  a 
fictitious  person,  and  stating  that  the  deed  in  his  name 
was  made  to  hinder  and  defraud  creditors/' 

§  132.  Joining  Defendants.—  The  rules  with  reference  to 
the  joinder  of  defendants  will  be  noticed  somewhat  at 
length  in  discussing  the  subject  of  complaints  bad  for 
multifariousness. J  The  cases  there  reviewed  seem  to 
establish  the  principle  that  different  fraudulent  purchasers 
of  distinct  pieces  of  property  may  be  joined  as  defend- 
ants. In  such  cases  the  debtor  is  a  necessary  party,  as  he 
is  "  the  very  link  which  unites  them  all  together,  the  com. 
mon  centre  to  which  they  are  all  connected,  and  it  is 
because  he  is  a  party  defendant  that  they  can  all  be 
joined  in  one  action  as  co-defendents."''  The  defendants 
in  such  cases  are  said  to  be  united  in  a  common  design. 
Each  is  charged  with  colluding  with  the  debtor  in  order 
to  defraud  his  creditors.  Where  there  is  one  entire 
case  stated,  as  against  the  debtor,  it  is  no  objection  that 
one  or  more  of  the  defendants  to  whom  parts  of  the  prop- 
erty had  been  fraudulently  conveyed  had  nothing  to  do 
with  the  other  fraudulent  transactions.0  The  case 
against  the  debtor  is  so  entire  that  it  cannot  be  prose- 


1  Stout  v.  Stout,  77  Ind.  537:  Van-Valkenburgh,  6  N.  Y.  190  ;  Wal- 
Walter  v.  Riehl,  38  Md.  211  ;  Jack-  ier  v.  Shannon.  53  Miss.  500;  Baulk- 
man  v.  Robinson,  64  Mo.  289.  nighl  v.  Sloan,  IT  Fla.  284  ;   Donovan 

2  Schaferman  v.  O'Brien,  2S  Md.  v.  Dunning,  69  Mo.  136;  Van  Kleeck 
060.  v.  Miller,  19   X.   B.    R.    184;   Bank  v. 

3Purkitt  v.  Polack,  17Cal.  327.  Harris,  84    X.    C.    206      -  L50. 

4  See  £§  150,  151,  152.  Chase  v.  Searles,  45   X.    11    51 1.   Alii 

5Potueroy's    Remedies    and    Rome-  son  v.    Weller,  6  T.   &  C     X.  Y      291, 

dial  Rights,  g  347  ;  Lawrence  v.  Bank  affi'd  66  X.  V.  614  ;  Boone  Count}    \. 

of  the  Republic,  35  N.  Y.  324  ;  Trego  Keck,  31  Ark.  487. 

v.  Skinner.    42   Md.    432;    Haines    v.  sSeeWood   v.  Sidnej    Sash,   Blind, 

Hollister,  64  N.  Y.  1  ;  Vanderpoel  v.  etc.  Co.,  92  Hun  |  X.  Y.   24 


260 


I  I  IN\  EYANCE    PENDING    SI   I  I. 


§  IS^a 


cuted  in  several  suits,  and  yet  each  of  the  defendants  is 
a  necessary  party  to  some  part  of  the  case  stated.1  If, 
however,  the  party  reached  and  made  defendant  has  a 
remedy  over  against  other  parties  for  contribution  or 
indemnity,  it  will  be  no  defense  to  the  primary  suit 
against  him  that  such  persons  are  not  made  parties.  A 
creditor  might  never  get  his  money  if  he  could  be  stayed 
until  all  the  parties  who  were  obligated  could  be  made  to 
contribute  their  proportionate  shares  of  the  liability.2 

£  132a.  Conveyance  pending  suit.  —  The  law  is  established 
that  a  party  who  intermeddles  with  property  in  litigation 
does  so  at  his  peril,  and  is  as  conclusively  bound  by  the 
results  of  the  litigation,  whatever  they  may  be,  as  if  he 
had  been  a  party  to  it  from  the  outset.3  Were  the  rule 
otherwise  endless  entanglements  would  result.' 


'Way  v.  Bragaw,  16  N.  J.  Eq. 
216.  Compare  A.tty.-Genl.  v.  Corpo- 
ration of  Poole,  4  Mylne  &  Cr.  31  ; 
Brinkerhoff  v.  Brown,  4  Julius.  Cli. 
N.  Y  1  671  ;  Fellows  v.  Fellows,  4 
t'ow.  (N  Y.)  682;  Boyd  v.  Hoyt,  5 
Paige  1  X.  Y.)  78  ;  Turner  v.  Robinson, 

I  Sim.  &  s.  313  ;  Marx  v.  Tailer,  12 
N.  Y.  Civ.  Pro.  226.  In  Rosenthal  v. 
Coates,  11*  CT.  S.  147,  the  court  say: 
"The  suit  was,  in  effect,  one  hy  the 
assignee  to  disencumber  this  fund  in 

I I  is  possession  of  alleged  liens,  and  the 
fact  that  each  defendanl  had  a  sepa- 
rate defense  to  this  Claim  did  not  create 
a  separable  controversj  as  to  him. 
Fidelity  Insurance  Co.  v.  Huntington, 
11?  r.  s.  280  ;  Graves  v\  Corbin,  132 
r.  s.  571,  586  ;  Young  v,  Parker,  132 
U.  s.  267." 

Marsh  v.  Burroughs,  1  Woods, 
168.  Where  an  action  is  brought  to 
forfeil  a  charter  a  lessee  of  the  corpo- 
ration may  be  Lei  in  to  defend.  Peo- 
ple v.  Aibanj  &  Vt  R.  R  Co.,  77  N. 
Y.  282.     The  husband  of  the   tra 

proper  defendanl  in  an 
action  to  sel  aside  the  transfer.    Lore 


v.  Dierkes,  19  J.  &  S.  (N.  Y.)  144.  \s 
to  when  a  cause  of  action  to  set  aside 
a  mortgage  on  the  ground  of  usury 
and  a  cause  of  action  to  annul  a 
fraudulent  conveyance  cannot  be 
joined,  see  .Marx  v.  Tailer,  12  N.  Y. 
Civ.  Pro.  226.  In  Artman  v.  Giles, 
155  Pa.  St.  11  1,  26  All.  Rep.  668,  the 
bill  was  filed  by  a  contract-creditor  to 
prevent  judgment-creditors  and  the 
sheriff  from  unking  a  sale.  The 
court  says:  "It  joins  separate  re- 
spondents, acting  in  different  capaci- 
ties, upon  different  rights,  and  not 
chargeable  with  any  joint  liability 
or  interest  in  the  relief  sought. 
Among  these  respondents  are  the 
sheriff  ;iikI  the  assignee  for  the  bene- 
fit of  creditors,  neither  of  whom  is  a 
proper  party  to  a  bill  of  this  nature." 
Tilton  v.  Cofield,  93  U.  S.  168; 
Inloes'  Lessee  v.  Harvey,  11  Md.  524; 
Salisbury  v.  Morss,  7  Lans.  (N,  Y.) 
359.  affi'd  55  N.  Y.  075  ;  Bovey  v. 
Elliott,  118  N.  Y.  133,  23  N.  E.  Rep. 
575  :  Lacassagne  v.  Chapuis,  144  TJ. 
s.  125,  12  S.  ('.  Rep.  659. 

'See  ^    157. 


§§  I32b,    133      ASSIGNEE   AND    RECEIVER    AS~DEFENDANT. 

132b.  Bringing  in  representatives.  Where,  pending  an 
action  to  set  aside  an  assignment  and  certain  specific 
transfers,  the  debtor  dies,  the  action  cannot  proceed  to 
judgment  without  the  presence  of  his  personal  represen- 
tatives.1 

§133.  Assignee  and  receiver  as  defendant.  —  In  a  case 
which  arose  in  New  York,  in  which  the  assignee  of  an 
insolvent  copartnership  had  been  joined  as  defendant, 
the  Court  of  Appeals  said  :  "  As  this  is  an  equity  action, 
the  assignee  of  the  firm,  who  had  received  its  assets  and 
never  rendered  any  account  for  the  same,  was  a  proper 
party.  He  represents  the  firm,  stands  in  its  place  so  far 
as  property  is  concerned,  and  the  avails  of  the  same  in  his 
hands  are  first  liable  to  be  appropriated  to  pay  the 
demands  of  the  plaintiffs.  No  valid  reason  exists  why  a 
person  thus  situated  is  not  a  proper  party,  in  connection 
with  the  survivors  of  the  copartnership  and  the  represent- 
ative of  the  deceased  partner."3  If  an  action  is  brought 
by  a  judgment  creditor  to  reach  property  fraudulently 
alienated,  the  fact  that  the  debtor  has  made  a  general 
assignment  for  the  benefit  of  creditors  is  no  defense  to 
the  debtor  or  to  his  fraudulent  alienee,  because  they  can 
have  no  interest  whatever  in  the  fund,  and  are  not  vested 
with  the  right  to  guard  any  interests  the  assignee  may 
possibly  have  ;  it  is  the  assignee's  exclusive  privilege  to 
personally  assert  such  rights.3  Furthermore,  under  some 
circumstances,  the  creditor  may  maintain  an  action  in  his 
own  name  to  set  aside  a  fraudulent  conveyance,  even 
though  the  assignee  has  the  same  right,  if  it  can  be  shown 
that  the  assignee  is  in  collusion  with  the  fraudulent  par- 
ties,   or    has    refused    on    proper   request    to    become    a 


1  First  National    Bank     v.    Shuler,  » Fort  Stanwix  Bank  v.  Leggett.  51 

153  N.  Y.  171.  N.  Y.  554. 

'-'  Haines  v.  Hollister,  64  N.  Y.  3. 


262  OBJECTION    AS   TO    NON-JOINDER.         §§  133a,   1 34 

plaintiff.1  In  any  case  the  defense  of  the  non-joinder  of 
the  assignee,  to  be  available,  should  be  taken  by  demurrer 
or  answer,2  disclosing  the  names  of  the  omitted  parties,3 
or  it  will  be  considered  waived.4  Chattels  fraudulently 
assigned  may  be  attached  by  a  creditor  in  the  hands  of  a 
voluntary  assignee.5 

§  133a.  Suing  directors. —  The  receiver  of  a  national 
bank  may,  in  his  own  name  or  in  the  name  of  the  corpo- 
ration, prosecute  directors  for  the  benefit  of  depositors 
and  creditors  of  the  bank  for  negligence  or  failure  to 
perform  duties.0  The  corporate  capacity  of  the  bank 
continues  till  its  affairs  are  wound  up  and  its  assets  dis- 
tributed.7 The  directors  are  held  liable  for  a  want  of 
that  care  which  a  man  of  ordinary  prudence  would  exer- 
cise in  the  management  of  his  own  affairs.8  But  each 
case  rests  largely  upon  its  own  facts,  and  the  general 
theme  is  too  broad  for  extended  discussion. 

>  134.  Objection  as  to  non-joinder  —  How  raised.  —  Dur- 
and  v.  Hankerson11  is  perhaps  an  extreme  illustration  of 
the  effect  of  the  failure  to  raise  the  issue  as  to  non-joinder. 
That  action  was  prosecuted  by  a  creditor  to  cancel  a 
deed.  The  conveyance  was  held  to  be  good,  but  it 
appeared  that  the  debtor  had  taken  back  a  mortgage 
upon  the  property,  which  remained  unsatisfied,  and  the 
evidence   tended    to  show   that  the  debtor  had  assigned 


1  Bate  v.   Graham,    11     X.   Y.  237  ;  28  X    V.  45;  Frost  v.  Mott,  34  N.  Y. 

Barvey  v.   McDonnell,  L13  X.  Y.  531,  253. 

21  X.  K.  Rep.  B95.     See§  114.  »Movius   v.  Lee,  30  Fed.  \U>V.  300  ; 

Fori  Stanwix  Bank  v.    Leggett,  51  Bank  v.  Kennedy,  17  Wall.  19. 

X.  V.  551.  'See   Rosenblatt    v.  .Johnston,    104 

P.;n  State  Iron   (o.  v.  Goodail,  39  U.  S.  402. 

X.  II.  234.  hHun    v.  Gary,  82  N.  Y.  05.     Com- 

'Annin  v.  Annul,  24  N.  J. Eq.  184;  pare  Briggs  v.  Spaulding,   ill   U.  s. 

Lyman  v.  Place,  2U  X.  .1.  Eq.  :'.<>.  132,  1 1  s.  I '.  Rep.  924. 

Bess  v.  Bess,  111    N    V   308,  22  X.  "39  X.  V.  287. 
1;   Rep  956.     See  Rinchej  v.  Stryker, 


§  135  MISJOINDER   OF  (  a  i  SES   OF    u   HON. 

the  mortgage  to  a  person  not  a  party  to  the  suit.  It  was 
proved  and  found  that  this  assignment  was  fraudulent, 
and  the  purchaser  from  the  debtor  was  directed  to  pay 
the  mortgage  to  a  receiver.  The  purchaser  strenuously 
resisted  this  decree,  upon  the  ground  that  the  pretended 
assignee  of  the  mortgage  not  being  a  party,  was  not 
bound  by  the  judgment,  but  the  learned  Woodruff,  [., 
held  that  while  it  presented  a  case  of  possible  hardship, 
as  payment  might  perhaps  be  enforced  a  second  time, 
yet  the  purchaser  should  have  protected  himself  by  raising 
the  objection  in  the  manner  prescribed  by  law.  The 
defendant  who  neither  by  answer  nor  demurrer  takes  such 
an  objection,  waives  it,  and  therefore  cannot  afterward  In- 
heard  to  object  on  that  ground  to  any  decree  to  which, 
upon  the  facts  alleged  and  proved,  the  plaintiff  ma)'  be 
entitled.  The  cause  thereafter  proceeds,  as  to  him,  with 
the  like  right  in  the  plaintiff  to  a  decree  as  if  the  sup- 
posed proper  or  necessary  party  had  been  brought  into 
court. 

We  may  here  observe  that  the  appointment  of  a 
receiver  does  not  absolutely  dissolve  a  national  bank, 
and  that  in  an  action  to  establish  the  rejected  claim  of  a 
creditor,  the  bank  and  the  receiver  may  both  be  made 
parties  defendant.1 

§  135.  Misjoinder  of  causes  of  action.  —  A  cause  of  action 
against  sureties  upon  the  bond  of  an  administrator,  claim- 
ing a  breach  of  its  condition,  cannot  be  united  in  the 
same  complaint  with  a  cause  of  action  arising  out  of  the 
fraudulent  disposition  of  property,-  against  the  adminis. 
trator  of  the  deceased  intestate  and  others. 


'Green   v.    Walkill    Nat.    Bank,    7  son,  8  Wall.  498;  <'ii\    of    Lexington 

Hun    (N.    Y.)    04;    Brinckerhoff    v.  v.  Butler,  14  Wall.  283. 
Bostwiek,    88  N.    Y.    61;    Turner  v.  Howse     v.     Moody,     I1     Fla.    59. 

First  Nat.  Bank,  26  Iowa,  562.     Com-  Compare  generally,  N.  Y.  &  N.  B,  R 

pare    Pahquioque     Bank    v.    Bethel  R.    Co.    v.   Schuyler,    [1    N.    V.   607; 

Bank,  36  Conn.  325;  Kennedy  v.  (Jil>-  Town   of   Venice  v.   Woodruff ,  68  N. 

Y.  470. 


-"4 


HEIRS   AND    LEGATEES. 


SI36 


sj  136.  Executors,  administrators,  heirs,  and  legatees.  — 
We  have  already  considered  the  status  of  personal  repre- 
sentatives,1 heirs,  and  legatees,2  as  complainants.  Let 
us  briefly  advert  to  the  question  of  their  joinder  as 
defendants.  In  Allen  v.  Vestel,8  it  was  said  that  a  cred- 
itor, in  an  action  to  set  aside  a  fraudulent  conveyance  to 
heirs  of  a  deceased  debtor,  should  allege  that  the  per- 
sonal property  had  been  first  exhausted,  and  should  make 
the  administrator  a  party  ;  or,  if  there  was  none,  should 
secure  one  to  be  appointed.1  This  is  but  another  phase 
of  the  general  question  as  to  the  necessity  of  joining  the 
debtor  as  a  defendant.  Authorities  can  be  cited  to  the 
effect  that  the  administrator  is  not  a  necessary  party  to 
the  creditor's  proceedings,5  and  to  the  opposite  effect,6 
and  holding  that  heirs  need  not  be  joined,7  and,  in  New 
York,  as  is  elsewhere   shown,8  a  distinction  is  made  as  to 


1  See  §§  112,  113. 

*See  ?  121. 

'60  1ml.  245. 

;  Boggs  v.  McCoy,  15  W.  Va.  344. 
Contra,  Jack  man  v.  Robinson,  64  Mo. 
289.  Compare  Smith  v.  Grim,  26  Pa. 
St.  95. 

Dorkray  v.  Mason,  4S  Me.  ITS; 
Merry  v.  Fre 1,  4-1  Mo.  518;  Tay- 
lor v.  Webb,  54  Miss.  36;  Corn. 'II  v. 
Radway,  22  Wis.  260;  Zoll  v.  Soper, 
75  Mo.  462  :  Jaekman  v.  Robinson,  64 
Mo.  289.  See  Coffee  v.  Norwood,  81 
Ala.  516;  Munn  v.  Marsh,  38  N.J. 
Eq.  410. 

•  Alexander  v.  Quigley,  2  Duv.  (Ky.) 
400;  Postlewail  v.  Hours,  3  Iowa, 
366  :  1  oates  v.  Day,  9  Mo.  300  ;  Boggs 
v.  McCoy,  15  W.  Va.  344  ;  Pharis  v. 
Leachman,  20  Ala.  662.  See  Bach- 
man  v.  SepuB  eda,  39  ( !al,  688. 

Smith  \.  Grim,  26  Pa.  St.  96  ; 
Wall  v.  Fairley,  73  X.  C.  464  ;  Shaw 
\  Millsaps,  50  .Mis>.  884.  Compare 
Simmon.-,    v.    Ingram,    60    Miss.    886. 


The  conveyance  made  by  their  ances- 
tor, it  is  said,  though  fraudulent, 
concludes  them,  and  effectually  cuts 
off  all  their  interest  in  the  property. 
Harlin  v.  Stevenson,  30  Iowa,  371.  It 
may  here  be  observed  that  the  power 
of  a  court  of  equity  to  charge  real 
estate  in  the  hands  of  heirs  with  the 
p.i\  mcnt  of  the  ancestor's  debts  is  un- 
doubted. Chewett  v.  Moran,  IT  Fed. 
Rep.  820:  Payson  v.  Hadduck,  8  Hiss. 
293  ;  Riddle  v.  Mandeville,  5  Cranch, 
323;  Stratford  v.  Ritson,  10  Brav.  -2:,: 
Ponsford  v.  Hartley,  2  Johns.  &.  II. 
730;  Adams  Eq.  257;  Story's  Eq. 
Plead.  99-102.  By  statute  in  New 
York  heirs  of  an  intestate  who  have 
inherited  I  md  must,  in  certain  cases, 
be  sued  jointly,  and  not  separately, 
for  a  debt  due  from  the  deceased. 
Krllog  v.  Olmstead,  li  How.  Pr.  (N. 
Y.i487.  See  Selover  v.  Cor,  03  N. 
Y.  438. 

8  See  ??  128,   129. 


§  136 


HEIRS    AND    I  EGA  fEES. 


the  form  of  the  action,  the  debtor  being  a  necessary 
party  in  a  creditor's  action,1  but  not  in  a  suit  in  equity  to 
remove  a  fraudulent  cloud.2  Where  this  distinction  is 
recognized,  it  might  be  extended  to  cover  the  cases  of 
personal  representatives  and  heirs.  The  United  States 
Supreme  Court  leans  to  the  view  that  in  a  suit  to  chai 
real  estate  with  the  payment  of  a  debt,  the  heirs  and 
devisees  should  be  made  parties  to  the  bill.3 

In  a  creditors'  bill  under  which  an  executor  had  been 
removed  from  office,  the  Supreme  Court  of  South 
Carolina  held  that  the  legatees  were  necessary  parties, 
and  that  the  receiver  appointed  in  the  place  of  the 
deposed  executor  did  not  represent  them.4  Again  the 
Supreme  Court  of  Ohio  has  decided,  that  where  the 
grantee  dies  after  the  rendering  of  a  decree  in  favor  of  a 
judgment-creditor  setting  aside  a  conveyance  and  order- 
ing a  sale  of  the  property,  the  failure  to  revive  the  decree 


1  Miller  v.  Hall,  70  N.  Y.  252. 

2  Fox  v.  Moyer,  54  N.  Y.  130. 

3  Walker  v.  Powers,  104  U.  S. 
251. 

Administrator  not  necessary  party 
—  Cornell  v.  Radway.  — In  an  action 
which  arose  in  Wisconsin,  it  appeared 
that  a  debtor  in  his  lifetime  received 
an  absolute  deed  of  land  and  failed 
to  record  it,  and  subsequently  de- 
stroyed the  deed  with  a  fraudulent 
design,  and  procured  the  grantor  to 
execute  another  deed  to  a  third  per- 
son without  consideration.  A  judg- 
ment-creditor of  the  deceased  debtor, 
whose  judgment  was  recovered  while 
the  deceased  held  the  first  deed, 
brought  a  suit  against  the  third  party, 
and  the  widow  and  heirs  of  the  de- 
ceased debtor,  to  establish  the  debtor's 
title  and  enforce  the  lien  of  the  judg- 
ment. Objection  was  raised  that  the 
administrator  was  not  a  party.     The 


court  said  :  "This  is  well  answered 
when  it  is  said  that  this  is  a  proceed- 
ing for  the  benefit  of  (lie  estate,  and 
that  the  administrator  could  make  n«> 
opposition  if  he  were  present.  Wedo 
not  see,  therefore,  bow  the  estate  can 
be  prejudiced  or  the  plaintiff's  righl 
to  relief  affected  by  the  absence  of 
the  administrator.  The  conveyance 
to  the  defendant  Jones  [the  third 
party]  being  sel  aside,  and  the  title 
adjudged  to  have  been  in  thedeceased 
judgment-debtor  from  the  time  of  his 
purchase,  the  plaintiff  will  then  pro- 
ceed as  if  the  debtor  had  died  seized 
of  the  land  with  lull  evidence  of  title- 
in  himself.  The  administrator  is  nol 
a  aecessarj  partj  ."  <  lornell  \ .  Rad- 
way, 22  Wis.  265.  Compare  Hentz  v. 
Phillips,  23Abb.  N.  C.  V  Y  15.6N. 
Y.  Supp.  L6. 

4  Fraser    \ .    <  lharleston,     18    S    I 
533. 


266  TRUSTEE    AND    I  EST1   I    QUE    TRUST.  §  [37 

against  the  heirs  of  the  grantee  did  not  affect  the  title  of 
a  purchaser  under  the  decree.1 

What  then  is  the  result  of  the  cases  upon  this  point  ? 
Necessarily  much  the  same  conclusion  must  be  reached 
as  is  gathered  from  the  authorities  upon  the  question  of 
the  joinder  of  the  debtor  in  an  action  to  reach  assets  in  the 
hands  of  a  third  party.  We  have  already  seen  that  the 
personal  representatives  may,  in  certain  cases,  annul  covin- 
ous alienations  made  by  the  deceased,  but  only  so  far  as 
may  be  necessary  to  satisfy  creditors.2  In  States  where 
the  right  of  the  creditor  to  seek  direct  relief  is  upheld,  it 
is  difficult  to  see  why  the  personal  representatives  or 
heirs  should  be  joined ;  the  conveyance  is  conclusive 
upon  such  parties,  and  their  presence  in  the  suit  will 
neither  aid  the  creditors  nor  benefit  them. 

;:  137.  Trustee  and  cestui  que  trust.  —  Mr.  Pomeroy 
says  :3  "  There  is  a  broad  distinction  between  the  case  of 
an  action  brought  in  opposition  to  the  trust,  to  set  aside 
the  deed  or  other  instrument  by  which  it  was  created,  and 
to  procure  it  to  be  declared  a  nullity,  and  that  of  an  action 
brought  in  furtherance  of  the  trust,  to  enforce  its  pro- 
visions, to  establish  it  as  valid,  or  to  procure  it  to  be 
wound  up  and  settled.  In  the  first  case,  the  suit  may  be 
maintained  without  the  presence  of  the  beneficiaries,  since 
the  trustees  represent  them  all  and  defend  for  them." 
The  Supreme  Court  of  Georgia,4  adopting  this  general 
rule,  held  that  where  a  creditor  claims  not  under  but  in 
opposition  to  a  deed  of  trust  made  by  his  debtor,  and 
seeks  to  set  the  same  aside  on  the  ground  that  it  is,  as  to 
him,  fraudulent  and  void,  he  is  at  liberty  to  proceed  against 
the  fraudulent  trustee  who  is  the  holder  of  the  legal 
estate    in    the    property,    without    joining   the    cestui  que 

Beaumont   v.  Herrick,  21  Ohio  St.  'Remedies  and    Remedial    Rights, 

1 10.  ?  3.-,7. 

-  •     .1 28,  1  '-".1  4  Tucker  v.  Zimmerman,  61  Ga.  599. 


§  1 3S  PARTY    HAVING    LIEN. 

trust!  The  oreneral  rule  is  that,  in  suits  affectim--  the 
trust,  the  trustee  and  res////  que  trust  must  be  joined.8 
There  is  an  exception  to  the  rule  in  case  of  voluntary 
general  trusts  for  the  benefit  of  creditors,  growing  out  of 
the  difficulty  of  joining  all  the  creditors,  and  in  such  case 
it  is  sufficient  to  bring  in  the  trustee,  and  the  creditors 
will  be  bound  on  the  principle  of  representation.'5 
A  decree  setting  aside  the  deed,  or  charging  the  property 
with  the  creditor's  demand,  will,  if  fairly  and  honestly 
obtained,  conclude  the  cestui  que  (rust  as  being  repre- 
sented by  the  trustee,  but  is  subject  to  be  impeached  for 
fraud  or  collusion.4 

§  138.  Party  having  lien.  —  It  certainly  is  reasonable,  and 
seems  to  be  recognized  as  an  established  rule,  that,  where 
a  party  has  a  lien,  by  way  of  mortgage  for  example,  upon 
the  property  which  is  the  subject  of  contention,  and  no 
ruling  is  asked  against  such  lien,  and  it  is  not  assailed,  but 
the  title  under  it  is  conceded  to  be  valid,  there  is  no 
ground  upon  which  the  holder  of  the  lien  can  be  regarded 
as  a  necessary  party  to  the  suit.5  The  creditors,  having 
elected  to  avoid  the  fraudulent  conveyance,  take  the  prop- 
erty as  though  the  transfer  had  never  been  made,  and 
subject  to  all  lawful  liens  upon  it.,;  But  where  the  lien- 
holder  is  made  a  party  to  the  suit,  and  the  validity  of 
his  claim  is  investigated  and  disposed  of  by  the  judgment 
adversely  to  the  validity  of  the  lien,  a  sale  by  the  receiver 


1  Rogers  v.  Rogers,  3  Paige  (N.  Y.)  B  Trego  v.  Skinner,  42  Bid.  151.  See 
379.  See  Phenix  Nat.  Bk.  v.  A.  B.  Walter  v.  Riehl,  38  Md.  211  :  Venable 
Cleveland  Co.,  11  N.  Y.  Supp.  877.  v.  Bank  of  the  United  States,  2  Pet. 

2  Landon  v.  Townshend,  112  N.  Y.  107;  Erfort  v.  Consalus,  i:  Mo.  218. 
99,  19  N.  E.  Rep.  424.  Compare    Reynolds  v.    Park,   5  Lans. 

3  Landon  v.  Townshend,  112  N.  Y.  (N.  Y.)  14!);  reversed  53  N.  Y.  36. 

99.  6  Hutchinson    v.   Murchie,    7  1    Me. 

4  Russell  v.  Lasher,  4  Barb.  (X.  Y.)  190;  Avery  v.  Backley,  20  Wall.  HI. 
232;  Wheeler  v.  Wheedon,  9  How.  Compare  Murphj  v.  Briggs,  88  \.  Y. 
Pr.  (N.  Y.)300.  446. 


268  STOCKHOLDERS.  §   1 39 

will  transfer  to  the  grantee  a  title  superior  to  such  lien  or 
claim.1 

§  139.  Stockholders. — The  assets  of  a  corporation  are,  as 
we  have  seen,'  regarded  as,  in  a  sense,  a  trust  fund  for  the 
payment  of  its  debts/5  and  its  creditors  have  a  lien  upon 
it,  and  the  right  to  priority  of  payment  over  its  stock- 
holders.4 Hence  where  property  of  a  corporation  had 
been  divided  among"  its  stockholders  before  its  debts  had 
been  paid,  the  court  decided  that  a  judgment-creditor, 
with  execution  returned  unsatisfied,  could  maintain  an 
action  in  the  nature  of  a  creditors'  bill  against  any  one 
stockholder  to  reach  whatever  had  been  received  by  him, 
whether  wrongfully  or  otherwise.  It  is  unnecessary  to 
make  all  the  stockholders  defendants.5 

The  question  of  the  statutory  liability  of  stockholders 
to  the  creditors  of  a  corporation  where  the  capital  has 
not  been  all  paid  in  and  a  certificate  to  that  effect  filed 
as  required  by  statute,  has  given  rise  to  much  litigation 
in  New  York  and  other  States  where  such  provisions 
exist.     This  liability  is  sometimes  said  to  rest  in  contract,6 


1  Sliand  v.  Hanley,  71  N.   Y.   324.  476;   Peters  v.   Bain,   133  U.  S.  691, 

See  Chautauque  Co.   Bank  v.  Risley,  10  S.  C.  Rep.  354. 

19  N.  Y.    372.     Where  a  debtor   has  *  Bartlett   v.   Drew,    57  N.  Y.  587: 

conveyed   property  in  fraud  of  cred-  Upton  v.  Tribilcock,  91  U.  S.  45-47 ; 

[tors,  and  the  alienee  at  the  debtor's  Sawyer  v.  Hoag,  17  Wall.  610:  Cole 

request  lias  given  a  mortgage  upon  it  v.  Millerton  Iron  Co.,  133  N.  Y.  164, 

to  a  creditor   whose  debt  existed  at  30  N.  E.  Rep.  847. 

the  date  of  the  conveyance,  the  latter  5  Bartlett    v.  Drew,  57  N.  Y.   587; 

is  regarded  as  a  purchaser  "  for  a  val-  Wheeler  v.  Millar,  90  N.  Y.  361.     A 

liable   consideration,"  2  R.  S.N.    Y.  stockholder  of  an  insolvent  bank  may 

137,  §5;  and  although  the  conveyance  be  compelled  to  pay  an  unpaid  sub- 

i-  ~f\  aside  by  other  creditors,  the  lien  scription  to  the  assignee,  and  he  has 

of  the  mortgage  cannot  be  affected,  no  right  to  set  off  the  amount  of  his 

Murphy  v.  Briggs,  VM   N.  Y.   146,  dis-  deposit  in  the  bank.     Macungie  Sav- 

tinguishing  and    limiting   Wood    v.  ings  Bank  v.  Bastian,  1   Am.  Ensolv. 

Robinson,  82  X.  Y.  564.  Hep.  484. 

||  117-119;  Wait  on  Insolvenl  6  Flash  v.  Conn,  109  U.  8.  371,  3  S. 

<  iorps.  Chap.  VII.  C.  Rep.  263  ;  Wiles  v.  Suydam,  64  N. 

Swan  Land  &  Cattle  Co.  v.  Frank,  Y.  173  ;  Cochran  v.  Wiechers,  119  N. 

148  U.S.  609,  18  S.  ( !.  Rep.  691 ;  Fogg  Y.  403,23  N.  E.  Rep.  803. 
\.  Blair,  189  U.  8.   126,   US.  1'.  Rep. 


§  139 


STi  h   kik  ILDERS. 


but  the  liability  of  directors  for  failure  to  file  an  annual 
report,  as  directed  by  statute,  is  considered  to  be  penal.1 
The  statute  in  the  former  case  in  effect  withdraws  the 
protection  of  the  corporation  from  the  stockholders,  and 
holds  them  liable  as  copartners.-  If  the  liability  was 
penal  the  statute  could,  of  course,  have  no  operation  in 
another  State,3  for  penal  statutes  are  strictly  local  in  their 
operations  and  results.4  Hence  it  was  held  that,  as  the 
obligation  imposed  upon  a  stockholder  under  the  New 
York  statute  rested  in  contract,  it  could  be  enforced  in 
Florida,5  the  rule  being  that  a  transitory  action  may  be 
brought  in  any  court  having  jurisdiction  of  the  parties  and 
the  subject-matter.'5 


1  Gadsden  v.  Woodward,  103  N.  Y. 
244,  8  N.  E.  Rep.  653;  Veeder  v. 
Baker,  83  N.  Y.  160  ;  National  Bank 
v.  Dillingham,  147  N.  Y.  609,  42  N.  E. 
Rep.  338. 

2  Corning  v.  MeCullough,  1  N.  Y. 
17.  See  Rogers  v.  Decker,  131  X.  Y. 
492  ;  Rogers  v.  Decker,  62  Hun  (N. 
Y.)  17,  16  N.  Y.  Supp.  407  ;  National 
Bank  v.  Dillingham,  147  N.  Y.  608, 
42   N.   E.    Rep.    338. 

3  Flash  v.  Conn,  109  U.  8 .  376,  3  S. 
C.  Rep.  263;  Marshall  v.  Sherman, 
148  N.  Y.  25,  42  N.  E.  Rep.  419  :  Hunt- 
ington v.  Attrill.  146  U.  S.  657,  13  S. 
C.  Rep.  224. 

4  See  The  Antelope,  10  Wheat,  66  ; 
Huntington  v.  Attrill,  146  U.  S.  666, 
13  S.  C.  Rep.  224  ;  Scoville  v.  Can- 
field,  14  Johns.  (N.  Y.)  338  ;  Western 
Transp.   Co.  v.  Kilderhouse,  87  N.  Y. 


430;  Lenimon  v.  People,  20  N.  Y. 
562;  Henry  v.  Sargeant,  13  X.  II. 
321:  Story's  Conflict  of  Laws  (8th 
ed.),  §  621. 

5  Flash  v.  Conn,   109  U.  S.  379,  3  S. 
C.  Rep.  263. 

"Denniok  v.  Railroad  Co.,  103  (J.  S. 
11;  Texas  A:  Pacific  Ry.  Co.  v.  Cox, 
L45  U.  S.  593,  12  S.  ('.  Rep.  905  ;  Mar 
shall  v.  Sherman,  84  Hun  (N.  Y.)  190. 
32  N.  Y.  Supp.  193.  We  cannot  here 
venture,  except  incidentally,  into  the 
wide  field  regulating  the  remedies  <>f 
creditors  against  insolvent  corpora- 
tionsor  their  officers.  See  Wait  en 
Insolv.  Corps.  Chap.  II.  But  it  may 
be  noted  that  a  creditors'  bill  may  be 
filed  against  a  county.  Lyell  v.  Super- 
visors of  St.  Clair,  3  McL.  580  ;  Wait 
on  Insolv.  Corps.  §111. 


CHAPTER  IX. 


COMPLAINT. 


|  140.   Recitals  of  the  complaint. 
141.  Pleading  fraud. 

143.  Evidence  not  to  be  pleaded. 
14:>.   Alleging  insolvency. 

144.  Allegations  concerning  consid- 

eration. 

145.  Fraudulent  intent. 
140.   Pleading  in  equity. 

147.  Seeking  discovery. 

148.  Excusing  laches  —  Concealment 

of  fraud. 

149.  Explaining  delay — Discovery  of 

fraud. 


§  150.  Complaints   bad   for   multifari- 
ousness. 

151.  )  Pleadings   held  nut  niultifari- 

152.  I      oils. 

153.  Alternative  relief. 

154.  Attacking     different      convey- 

ances. 

155.  Prayer  of  complaint  —  Variance 

—  Verification. 

156.  Amendment. 

157.  Description  —  Lis  pendens. 
157m.  Change  of  venue  —Territorial 

jurisdiction. 


§  140.  Recitals  of  the  complaint.— To  successfully  impeach 
a  fraudulent  conveyance,  it  ordinarily  devolves  upon  the 
complainants  to  aver  in  the  pleading  that  they  were 
creditors  at  the  time  of  the  alienation  in  controversy,1  and 
to  state  against  whom  the  judgment  proceeded  upon  was 
recovered.3  The  complaint  will  ordinarily  be  considered 
defective  unless  it  appears  upon  its  face  that  an  indebted- 
ness exists,3  and  that  the  plaintiff  has  exhausted  his 
remedy  at  law  ; 4  and  such  averments   cannot  usually  be 


1  Merrell   v.   .Johnson,    96  III.  230 
[Thre  v.  Meluui,  17  Bradw.  (Ill  )  182 
Donley    v.    McKiernan,    62    Ala.    34 
Walthall  v.  Rives,  34  Ala.  91.     Com- 
pare Newman  v.  Van  Duyne,  42  N.  J. 
Eq.   185. 

'■  Lipperd  v.  Edwards,  39  End.  169. 
See  1 lhap.  IV.  a  bill  in  chancerj  is 
nol  good  as  an  attempt  to  sel  aside  a 
fraudulent  conveyance,  procure  d  by 
a  debtor  to  be  made  to  his  daughter,  if 
it  neither  alleges  thai  there  is  a  judg 


nient  against  the  father,  nor  that  the 
debt  due  at  the  time  the  conveyance 
was  made  is  still  due,  and  fails  to  pray 
for  such  relief.  Ferguson  v.  Bobo,  54 
Miss.  121. 

Elwell  v.  Johnson.  :;  Hun  (X.  Y.) 
558,  71  N.  V.  80:  Carpenter  v.  Os- 
born,  102  N.  Y.  558,  7  N.  E.  Rep. 
823. 

Beardsley  Scythe  Co  v.  Foster,  36 
X.  Y.  565.  See  Allyn  v.  Thurston.  53 
N.  Y  622 ;  Suydam  v.    Northwestern 


§140  RECITALS    OF   THE    COMPLAINT.  .71 

supplied  by  an  allegation  of  a  total  want  of  property,1  or 
the  uselessness  of  an  execution,2  and,  if  it  does  not  appear 
that  the  execution  was  issued  to  the  county  of  the  debt- 
or's residence,  or  other  proper  county,  the  complaint  is 
not  aided  by  an  averment  that  it  was  returned  unsatis- 
fied.3 It  must  appear  that  a  debt  or  duty  due  to  the 
plaintiff  has  been  in  some  way  injuriously  affected  by  the 
conveyance  attacked.1  According  to  some  of  the  cases 
it  is  not  sufficient  to  entitle  the  creditor  to  the  aid  of  a 
court  of  equity  merely  to  show  that  the  debtor  made  a 
fraudulent  disposition  of  a  portion  of  his  property.  The 
complainant  must  set  forth  that  the  alienation  of  prop- 
erty complained  of  embarrassed  him  in  obtaining  satis- 
faction of  his  debt,  "  for  if  the  debtor  has  other  property 
subject  to  the  judgment  and  execution  sufficient  to  satisfy 
the  debt,  there  is  no  necessity  for  the  creditor  to  resort  to 
equity."5  An  allegation  that  the  execution  has  been 
returned  wholly  unsatisfied,  and  that  the  defendant  has 
no  other  property  out  of  which  the  plaintiff  could  collect 
the  judgment,  has  been  held  sufficient  on  a  demurrer 
based  on  the  contention  that  these  allegations  failed  to 
show  that  the  defendant  did  not  have  sufficient  property 
at  the  time  of  the  conveyance.0 


Ins.  Co.,  51  Pa.  St.  394;  Scott  v.  Mc-         "  A.lsit  v.  Sanford,  23  Hun  <N.  Y.i 

Farland,    34   Miss.    3G3  ;    Cassidy    v.  45. 

Meacham,  3  Paige  (N.  Y.)  311  ;  Spel-         3  Payne  v.  Sheldon,  63  Barb.  (N.  Y.) 

man  v.   Freedman,   130  N.  Y.  425,  29  176. 

N.  E.  Rep.  765  ;  Weaver  v.  Haviland,  4  Ullrich  v.  Ullrich,  68  ( !onn.  580. 
142  N.  Y.  537,  37  N.  E.  Rep.  641  ;  Ad-  5  Dunham  v.  Cox,  1  * »  N.  J.  Eq.  467. 
sit  v.  Butler,  87  N.  Y.  585;  Wales  v.  A  complaint  alleging  that  an  assign- 
Lawrence,  36  N.  J.  Eq.  209;  Easton  ment  was  void  on  its  face  and  made 
Nat.  Bank  v.  Buffalo  Chem.  Works,  to  hinder,  delay  and  defraud  creditors, 
48  Hun  (N.  Y.)  560,  1  N.  Y.  Supp.  250.  slates  one  cause  of  action.  Pittsfield 
See  Chap.  IV.  Nat.  Bank  v.  Tailer,  60   Bun  (N.  V  l 

1  See  McElwain  v.  Willis,  9  Wend.  130,  14  X.  Y.  Supp.  557. 
(N.  Y.)  548;  Crippen  v.   Hudson,   13         6  Cook  v.  Tibbals,  1.2  Wash.  207,  10 

N.  Y.   165;  Beardsley  Scythe  Co.  v.  Pac.  Rep.  935;  Pierce   v.    I  lower,  142 

Foster,  36  N.  Y.  565 ;  Ryan  v.  Spieth,  Ind.  626,  42  N.  E.  Rep.  228;  Hartlepp 

18  Mont.  47.  v.  Whiteley,  129  Ind.  577,  28  N     I 


-7- 


l:l  l   1  1  A.LS   <  IF    THE    I  I  (MPLAINT, 


§  HO 


The  bill  should  recite  facts  sufficient  to  indicate  that 
the  judgment  cannot  be  collected  without  equitable  aid.1 
This  averment  is  material,  and  a  decree  upon  proofs  with- 
out this  necessary  allegation  is  said  to  be  erroneous,  since 
"  the  defendant  cannot  be  required  to  meet  and  overcome 
evidence  not  responsive  to  the  pleadings." 3  General 
averments  of  facts  from  which,  unexplained,  a  conclusion 
of  law  arises,  are  sufficient.3  It  may  be  here  observed 
concerning  the  rules  of  pleading  that,  generally  speaking, 
it  is  the  right  of  an  antagonistic  defendant  to  have  all  the 
material  facts  on  which  relief  is  sought  specifically  set 
forth  in  the  bill,  to  the  end  that  such  facts  maybe  admit- 
ted or  controverted  by  the  answer  and  testimony  ;  and 
usually  no  proofs  will  be  admitted  unless  secundum  alle- 
gata} Hence,  where  it  is  the  purpose  of  the  complain- 
ants to  seek  relief  for  creditors  other  than  themselves, 
such   intention    should   be    manifested   by  suitable    aver- 


Rep.  535,  31  Id.  203.  But  see  Wind- 
standley  v.  Stipp,  132  Ind.  548,  32 
X.  E.  Rep.  302. 

Emery  \  Yount,  I  West  Coast, 
Rep.  499,  7  Col.  109.  In  an  action  to 
sel  aside  a  conveyance  of  land  upon 
tin-  ground  of  fraud  the  complaint 
should  aver  the  delivery  of  the  deed 
claimed  to  be  fraudulent.  Doerfler  v. 
Schmidt,  04  Cal.  265,  30Pac.Rep.  810. 

Thomas  v.  Mackey,  '■'•  Col.  393.  In 
Randolph  v.  Daly,  16  X.  J.  Eq.  317, 
the  court  said  :  "  It  is  not  necessary 
to  aver  thai  the  firm  is  insolvent  in 
order  to  entitle  the  complainants  t<> 
relief.  The  partnership  property  may 
be  amph  sufficienl  to  satisfy  all  the 
debts  of  1  he  firm,  yel  it  rnaj  be  so 
covered  up,  or  placed  beyond  the 
reach  of  process,  as  nol  to  be  amen- 
able to  execution  al  law,  and  to  ren- 
der the  interference  of  equity  essen- 
tial to  the  ends  of  jusl ice,  All  1  hal 
can   be  required  is  thai  it  should   ap- 


pear by  the  bill  that  the  complainant 

has  exhausted  his  remedy  at  law, 
and  that  the  aid  of  this  court  is  neces- 
sary to  enable  him  to  obtain  satisfac- 
tion of  his  judgment.*'  So  the  com- 
plaint need  not  aver  that  the  defend- 
ant has  transferred  all  his  property 
and  is  without  means  to  satisfy  the 
judgment  where  it  shows  the  re- 
turn of  execution  unsatisfied  and 
alleges  fraud  in  the  conveyance  at 
tacked.  Citizens'  Nat.  Bk.  v.  Hodges, 
80  Hun  (X.  Y.)  175,  30  N.  Y.  Supp. 
44.")  ;  Kain  v.  Larkin,  141  N.  Y.  111. 
36  X.  E.  Rep.  0. 

:;  Williams  v.  Spragins,  102  Ala. 
430?  l5So.  Kep.'Ji;  ;  Pickett  v.  Pipkin, 
HI  Ala.  520:  Burford  v.  Steele,  80 
Ala.  148. 

4  Burt  v.  Ke.ves,  ]  Flipp.  72.  Un- 
certainty in  a  pleading  should  he 
reached  by  motion.  Moorman  v. 
Shockney,  95  End.  ss. 


§i4i 


PLEADING    FRAUD. 


27.} 


ments  in  the  bill.      It  must  be  alleged  thai  the  plaint  ill  i  , 
the  owner  of  the  unsatisfied  judgment.1 

§  141.  Pleading  fraud.  —  Fraud  has  been  said  in  a  general 
way  to  be  a  conclusion  of  law,2  though  perhaps,  more 
correctly  speaking,  it  is  the  judgment  of  law  upon  fa 
and  intents.'5  Fraud  lies  in  the  intent  to  deceive.4  A 
mere  general  averment  that  a  deed  was  fraudulent,  or  that 
it  was  made  with  the  intent  to  hinder,  delay  or  defraud 
creditors,  has  been  regarded  as  an  insufficient  method  of 
pleading.  Manifestly  no  judgment  can  be  given  in  favor 
of  a  plaintiff  upon  grounds  not  stated  in  the  complaint 
and  no  relief  can  be  extended  for  matters  not  charged.' 
If  statements  showing  fraud  are  followed  by  recitals 
contradictory  thereof  or  inconsistent  therewith,  the 
pleading  is  insufficient,  though  fraud  be  charged." 
"  A  suitor  who  seeks  relief  on  the  ground  of  fraud  must 
do  something  more  than  make  a  general  charge  of  fraud." ; 
Peckham,  J.,  has  said:  "Mere  general  allegations  of 
fraud  or  conspiracy  are  of  no  value  as  stating  a 
cause  of  action."8     There  must,  ordinarily,  be  averments 


1  Ryan  v.  Spieth,  18  Mont.  49. 

2  Horsford  v.  Gudger,  35  Fed.  Rep. 
388. 

3  See  §  13.  Hutchinson  v.  First 
Nat.  Bk.,  133  Tnd.  283,  30  N.  E.  Rep. 
952. 

4  Higgins  v.  douse,  147  N.  Y.  415  ; 
42  N.  E.  Rep  6. 

6  Dickinson  v.  Banker's  Loan,  etc. 
93  Va.  502. 

6  Truesdell  v.  Sarles,  104  N.  Y.  167, 
10  N.  E.  Rep.  139  ;  Southwick  v.  First 
Nat.  Bk.,  84  N.  Y.  420  ;  Southall  v. 
Farish,  85  Va.  410,  7  S.  E.  Rep.  534. 

1  Smith  v.  Wood,  42  N.  J.  Eq.  567, 
7  All.  Rep.  881  ;  St.  Louis,  &  S.  F.  Ry. 
Co.  v.  Johnston,  133  U.  S.  577,  10  S.  ( '. 
Rep.  390;  Leasure  v.  Forquer,  27 
Ore.  334,  41  Pac.  Rep.  665  ;  West  Coast 
18 


Grocery    Co.    v.    Stenson,    13    Wash. 
255,  43  Pac.  Rep.  35. 

8  Wood  v.  Amory,  105  X.  V.  282; 
11  N.  E.  Rep.  636,  citing  Van  Weel  v. 
Winston,  115  U.  S.  228,  6  S.  C.  Rep. 
22  ;  Cohn  v.  Goldman,  76  X.  Y.  284  ; 
Knapp  v.  City  of  Brooklyn,  07  X.  Y. 
520;  Cm-ran  v.  Olmstead  101  Ala.  692, 
14  So.TJep.  398;  Leasure  v.  Forquer, 
27  ore.  334,  41  Pac.  Hep.  665;  Knight 
v.  Glasscock, 51  Ark.  390,  11  S.W.  Rep. 
580;  Reed  v.  Bott,  100  Mo.  62,  12  S. 
W  Rep.  347,  14  Id.  1089.  An 
allegation  thai  a  mortgage  was 
fraudulent  is  not  sufficienl  to  allow 
evidence  thai  part  of  the  sum  appar- 
ently secured  by  the  mortgage  was 
fictitious.  Blair  v.  Finlay,  '.'<  Tex. 
210,  12  S.  \V.  Rep.  983. 


74 


I  AIM  \<;    FRAUD. 


§   141 


of  the  facts,1  which  constitute  the  fraud,  or  which  tend  to 
support  the  conclusion/  Relief  will  not  be  afforded 
upon  the  ground  of  fraud  unless  it  be  made  a  distinct 
allegation  in  the  bill,  so  that  it  may  be  put  in  issue  by  the 
pleadings.3  "  The  words  '  fraud  '  and  '  conspiracy  '  alone, 
no  matter  how  often  repeated  in  a  pleading,  cannot  make 
a  case  for  the  interference  of  a  court  of  equity."4  In 
Flewellen  v.  Crane,5  the  averments  were  that  a  convey- 
ance, purporting  on  its  face  to  be  made  in  payment  of 
a  debt  due  from  the  grantor  to  the  grantee,  was  ''  fraudu- 
lent and  void  as  against  pre-existing  creditors,1'  and  that 
it  was  "  made  with  the  intent  to  hinder,  delay,  or  defraud 
said    creditors."6     There   was   no   averment    impeaching 


1  In  St.  Louis,  &  8.  F.  Railway  Co.  v. 
Johnston,  133  U.  8.  506,  577,  the  court 
say  :  "  The  material  facts  on  which 
the  complaint  relies  must  he  so  dis- 
tinctly alleged  asto  put  them  in  issue. 
Barding  v.  Handy,  11  Wheat.  103. 
And  if  fraud  is  relied  on,  it  is  not  suf- 
ficient to  make  the  charge  in  general 
terms.  'Mere  words,  in  and  of  them- 
selves, and  even  as  qualifying  adjec- 
tive- of  more  specific  charges,  are  not 
sufficient  grounds  of  equity  juris- 
diction, unless  the  transactions  to 
which  they  refer  are  such  as  in  their 
essential  nature  constitute  a  fraud  or 
a  breacb  of  trust,  for  which  a  court 
of  chancery  can  give  relief.'  Van 
Weel  v.  Win-ton,  115  U.  S.  228,  237  ; 
Imbler  v.  Choteau,  107  U.  S.  586, 
591.  The  defendant  should  not  be 
subjected  to  being  taken  by  surprise, 

and  enougb  should  he  stated  to  justify 
the  conclusion  of  law,  though  with- 
out undue  minuteness." 

Pickett  \.  Pipkin,  64  Ala.  523  ; 
Flewellen  \.  ( Irane,  58  Ala.  627  ;  Gil- 
bert v.  Lewis.  1  De  <;..  .1.  &  s.  19  ; 
D  xter  \  Mc  Ifee,  163  III.  508  ;  Myers 
\.  Sheriff,  21  La.  Ann.  1  ;•_> ;  Rhpad  v. 

II son,    16     .Mich.    246;    .lone-     \. 

Massej  .  79  Ala  370.     In  a   n nt  de- 


cision in  New  York,  however,  an 
allegation  that  the  conveyance  was 
without  consideration  and  with  the 
intent  to  hinder,  delay  and  defraud 
creditors  was  held  sufficient.  Kain  v. 
Larkin,  141  N.  Y.  144,  36  N.  E.  Rep.  9. 

3  Patton  v.  Taylor,  7  How.  159  ; 
Noonan  v.  Lee,  2  Black,  508  ;  Voor- 
hees  v.  Bonesteel,  16  Wall.  29  ;  Beau- 
bien  v.  Beaubien,  23  How.  1 90 : 
Lewis  v.  Burnham,  41  Kans.  546, 
21  Pac  Rep.  572.  AVhere  the  party 
relying  on  the  invalidity  of  the 
conveyance  is  the  defendant,  e.  </.  a 
sheriff,  holding  the  property  under 
an  attachment,  it  is  not  necessary  to 
plead  fraud  ;  a  denial  of  plaintiff's  title 
is  sufficient.  Mason  v.  Vestal,  88  Cal. 
396,  26  Pac.  Rep.  213;  Welcome  v. 
Mitchell,  SI  Wis  566,  51  N.  W.  Rep. 
L080  ;  Holmberg  v.  Dean.  21  Kan.  73  ; 
see  Nat.  Bank  v.Barkalow,  53  Kan. 
69,   35    Pac.    Rep.  796. 

1  Ambler  v.  Choteau,  107  U.  S. 
586,  591,  1  S.  C.  Rep.  556.  See  Dick- 
inson v.  Bankers'  Loan,  etc.,  93  Va. 
502. 

58   \la    627. 

6  See   Rowland  v.  Coleman,   15  Ga. 

204  ;    .Meeker  v.  Hani-.   19  Cal.  278. 


§  141  PLEADING    FRAUD. 

the  adequacy  or  bona  fides  of  the  consideration  expressed  ; 

nor  asserting  that  the  debt  was  not  justly  due  from  the 
grantor  to  the  grantee  ;  no  setting  up  a  secret  trust  for 
the  grantor.  The  pleading  was  declared  insufficient  to 
support  a  final  decree,  rendered  upon  a  decree  pro  con- 
fesso,  which  adjudged  the  conveyance  void  for  fraud. 
The  rule  is  that  the  facts  upon  which  the  fraud  is  predi- 
cated cannot  be  left  to  inference,  but  must  be  distinctly 
and  specifically  averred.1  If  a  bill  is  filed  to  set  aside;  a 
deed  upon  the  ground  of  undue  influence,  it  is  not  neces- 
sary to  allege  every  fact  showing  the  actual  exercise  of 
undue  influence,  but  the  relations  of  the  parties  ought  to 
be  stated,  and  the  general  fact  of  undue  influence  alleged, 
and  some  specific  instances  given  from  which  the  court 
could  infer  it.3  "  No  rule  of  equity  pleading  is  better 
settled  than  that  which  declares  that  every  material  fact 
which  it  is  necessary  for  a  complainant  to  prove  to  estab- 
lish his  rio-ht  to  the  relief  he  asks  must  be  alleged  in  the 
premises  of  his  bill,  with  reasonable  fullness  and  particu- 
larity." 3  The  common-law  rule  was  clearly  settled  that 
fraud  must  be  distinctly  alleged  and  as  distinctly  proved, 
and  that  it  was  not  allowable  to  leave  fraud  to  be  inferred 
wholly  from  the  facts.  While  it  may  not  be  absolutely 
essential  to  employ  the  word  "fraud"  in  the  pleading,  yet 
the  facts  stated  should  show  distinctly  that  fraud  is 
charged.4  The  New  York  Court  of  Appeals  say  that  the 
use    of  the  word    "fraud"   or   "fraudulent,"    in    order   to 


'Thomas  v.   Mackey,    3  Col.  393;  'Smith  v.  Wood,    12  X.  J.  Eq.  566, 

Small  v.  Boudinot,  9  N.  J.  Eq.  391  ;  7   Atl.    Re]>.  881.     See  Virginia    Fire 

Klein  v.  Horine,  47  111.  430  ;  Bryan  v.  &  .Marine    [ns.  Co.  v.  Cottrell,  85  Va. 

Spruill,  4  Jones1  Eq.  (N.  C.)  27;  On-  864,  9  S.  E.   Rep.   132;  Bierne  v.  Kay, 

tario  Bank  v.   Root,  3  Paige  (N.  V.)  37  W.  Va.   577,    16  S.    E.    Rep.    804; 

478;  Williams  v.   Spragins,  102  Ala.  Pusey  v.  Gardner,  21  W.  Va.  176,  177. 

424,    15    So.    Rep.    247;    Marston   v.  '  See  Davy  v.  Garrett,  7  Ch.  D.  489  ; 

Dresen,    76  Wis.   418,  45  N.  W.  Rep.  Smith  v.  Kay.  7  II.  L.  Cas.  ffi3 ;  Cadj 

110;  Smith    v.    Wood,  42  N.   J.    Eq.  v.  Leonard,  81  Cal.  622,  22  Pac.   Rep. 

563,  7  Atl.  Rep.  881.  694. 

2 1  Drewry's  Eq.  PI.  15. 


|\  I  hi-  \<  T.    NOT    TO    BE    PLEADED. 


§  HI 


characterize  the  transaction,  or  specify  the  ground  of  relief, 
is  not  absolutely  necessary.1  Where  the  circumstances 
are  such  as  do  not  warrant  the  court  in  avoiding  the  trans- 
action in  toto,  it  may  be  avoided  as  an  absolute  convey- 
ance, and  permitted  to  stand  as  a  security;2  but  such 
relief  cannot  be  afforded  unless  the  complaint  contains 
allegations  adapted  thereto.3  An  averment  of  an  intent 
to  defraud  is  one  of  fact,  and  not  a  statement  of  a  conclu- 
sion of  law.4  It  must  be  alleged  as  well  as  proved,5  and 
it  may  be  directly  testified  to  as  a  fact.6  An  allegation 
that  a  mortgage  was  not  executed  in  good  faith,  but  for 
the  purpose  of  hindering,  delaying  and  defrauding  cred- 
itors is  not  sufficiently  specific.7  Where  a  valuable  con- 
sideration has  passed,  it  is  also  necessary  to  charge  that 
the  grantee  had  notice  or  knowledge  of  the  fraudulent 


1  Whittlesey  v.  Delaney,  73  N.  Y. 
575  :  Warner  v.  Blakeman,  4  Abb.  Ct. 
App.  Dec.  (N.  Y.)  530;  Maher  v. 
Hibernia  Ins.  Co..  07  N.  Y.  283.  See 
Hamlen  v.  McGillicuddy,  62  Me.  268. 
In  Goldsmith  v.  Goldsmith,  145  N.  Y. 
318,  the  couri  says:  "It  is  true  that 
an  intended  fraud  is  not  explicitly 
and  by  the  use  of  that  word  chai'ged 
in  the  complaint,  but  all  the  facts  are 
there,  fully  and  clearly  stated,  show- 
ing the  fraud  attempted  to  be  perpe- 
trated, and  all  that  is  omitted  is  the 
word  or  expression  characterizing  the 
necessary  inference.  We  have  held 
thai  such  an  omission  after  judgment 

i-   Dot   material  where  the   facts  tliem- 

bi  Ives  have  been  sufficiently  pleaded. 
Whittlesey  v.  Delaney,  73  X.  Y.  575." 
low  v.  Ayrault,  16  Barb.  1  X. 
\  '  143;  May  on  Fraudulent  Convey- 
ances, p.  235      s'',.  ;  51. 

Van  Wyck  v.   Baker,    16  I  Inn  (X. 
\     L71. 
■  Piatt  v.  Mead,  9  Fed.  Rep.  91. 


5  Genesee  River  Nat.  Bank  v.  Mead, 
18  Hun  (N.  Y.)  303  ;  Threlkel  v.  Scott, 
89  Cal.  351,  26  Pac.  Rep.  879. 

6  Seymour  v.  Wilson.  14  N.  Y.  570. 
"The  complaint  contains  a  distinct 
charge  that  the  assignment  was  made 
to  hinder,  delay  and  defraud  the 
creditors  of  the  assignor,  and  that  it 
is  therefore  fraudulent  and  void. 
This  is  unexceptionable  and  sufficient 
pleading,  where  the  vice  of  the,  instru- 
ment is  inherent  in  its  terms.  When 
an  assignment  contains  provisions 
which  necessarily  tend  to  hinder,  de- 
lay, and  defraud  creditors,  these  pro- 
visions are  conclusive  evidence  of  the 
design  of  the  parties  to  the  instru- 
ment  It    is    not    necessary    in 

pleading  to  point  out  the  particular 
features  or  clauses  of  the  instrument 
which  arc  objected  to."  Jessup  v. 
Hulse,  29  Barb.  (N.  Y.)  541  ;  reversed, 
21   X.  Y  168,  on  another  point. 

'Gleason  \.  Wilson,  18  Kan.  500, 
29  Pac.  Rep.  698. 


§§   142,    143  EVIDENCE    NOT    TO    BE    PLEADED. 

design.1     And  where   subsequent  creditors  sue,   the  com- 
plaint must  allege  fraud  as  to  them.2 

§142.  Evidence  not  to  be  pleaded. —  General  certainty  is 
sufficient  in  pleading  in  equity;  and  though  a  mere  gen- 
eral charge  of  fraud  is  insufficient,  it  is  not  to  be  under- 
stood that  the  particular  facts  and  circumstances  which 
confirm  or  establish  it  should  be  minutely  charged.8  It  is 
not  necessary,  or  proper,  that  pleadings  at  law  or  in  equity 
should  be  incumbered  with  all  the  matters  of  evidence 
the  complainant  may  intend  to  introduce.4  A  general 
averment  of  facts — not  of  conclusions  of  law  —  upon 
which  the  rights  of  the  parties  depend,  is  sufficient.  By 
the  elementary  rules  of  pleading  facts  may  be  pleaded 
according  to  their  legal  effect,  without  setting  forth  the 
particulars  that  lead  to  it;  and  necessary  circumstances 
implied  by  law  need  not  be  expressed  in  the  plea.5  So 
much  of  the  complaint,  however,  as  sets  out  in  detail  the 
inceptive  steps  which  culminated  in  the  alleged  fraudulent 
conveyance,  is  not  irrelevant  or  redundant  matter.6 

§143.  Alleging  insolvency.— As  elsewhere  shown,  a  vol- 
untary conveyance  is  not  generally  regarded  as  fraudulent 
per  se.7  If  a  debtor  is  perfectly  solvent,  he  can  do  what 
he  will  with  his  property  so  long  as  he  does  not  dispose 
of  so  much  of  it  as  to  disable  him  from  paying  his  debts. 
This  is  a  rule  of  pleading  as  well  as  of  evidence.  Heine 
a  bill  which  contained   no  allegation   that  the  debtor  at 


1  Seeleman   v.    Hoagland,    19    Col.  5  Sullivan  v.  Iron  cV  silver  Mining 

231,  34  Pac.  Eep.  995.  Co.,  109  U.  S.  555. 

3  Hutchinson  v.  First  Nat.  Bk.  133  *;  Perkins  v.  Center,  35  Cal.  71  1. 

Ind.   285,   30  N.  E.  Rep.  952  ;  Barrow  'Young    v.    Heermans,    66    N.    \ 

v.  Barrow,  108  Ind.  345,  9  N.  E.  Rep.  374:  Holden  v.    Burnham,    63   N    5 

371.  75;  Thomas  v.   Mackey,  3  Col.   390. 

3  Story's  Eq.  PI.  §  352.  See  §§  93  and  208.     Grover  &    Baker 

4  Zimmerman    v.  Willard,  114  111.  Sewing  Machine  Co.    v.    Radcliff,  63 
370.  2  N.  E.  Rep.  70.  Md.  496;Kain   \.   Larkin,  131   N     Y. 

306,  30  N.  E.  Rep.  105. 


278  ALLEGING    [NSOLVENCY.  §143 

the  time  of  the  alienation  was  insolvent  or  embarrassed, 
was  held  bad,1  for  it  is  only  when  an  inadequate  amount 
of  property  remains  that  creditors  have  the  legal  right  to 
complain.2  The  court  said  that,  for  aught  that  appeared 
in  the  pleading,  the  debtor  might  have  been  possessed  of 
ample  means,  other  than  the  property  in  controversy,  to 
pay  his  debts  ;  and  in  such  a  case  the  conveyance  is  not 
ordinarily  open  to  the  attack  of  creditors.  A  complaint 
by  an  executor  attacking  a  fraudulent  conveyance  should 
allege  the  existence  of  debts  as  to  which  the  conveyance 
is  void.3  But  it  is  not  necesssary  in  the  case  of  a  volun- 
tary conveyance  to  allege  also  that  there  was  fraud  on 
the  part  of  the  grantee.4 

A  man  is  said  to  be  insolvent  "  when  he  is  not  in  a 
condition  to  pay  his  debts  in  the  ordinary  course,  as  per- 
sons carrying  on  trade  usually  do," 5  or  when  all  his 
obligations  could  not  be  collected  by  legal  process  out  of 
his  own  means,0  or  his  means  of  payment  are  so  crippled 
and  his  embarrassment  is  so  great  that  he  cannot  proceed 
with  and  carry  on  his  business  in  the  usual  course  of 
trade.'      A  complaint  which  states  that  "  the  said  W.  L.  J., 


1  BurdsaJl   v.  Waggoner,  4  Col.  2G1.  Piatt  v.  Mead,  9  Fed.  Rep.  91  ;  Noble 

Sec  Merrell   \.  Johnson,  96  111.  23U ;  v.   Hines,   72   Ind.    12;    Whitesel   v. 

McCole  v.  Loehr,  79  Ind.  431 ;  Spauld-  Hiney,   62    Ind.    168;    McConnell   v. 

ing   v.  Blythe,  73  Ind.  93;    Noble  v.  Citizens' State  Bank,  130  Ind.  132,27 

llin.-.  72    [nd.12;  Sherman  v.  Hog-  N.  E.  Rep.  616  ;  Aibertoli  v.  Branliani, 

land,    54    [nd.    578,    584;    Xeyers    v.  SO  Cal.   631,   22  Pac.    Rep.    404:   Mc- 

Llack,  138  Ind.  263;  :!7  X.  E.  Rep.  791  ;  Connell   v.  Citizens'  State  Bank,  130 

Kir,,  v.  Perry,  01  Me.  I  15;  Kings  Heirs  Ind.   127,  27  N.  E.  Rep.  616. 

v.  Thompson,  9   Pet.   204  ;    Warner  v.  ■■  Walker  v.  Pease,  17  Misc.  (N.  Y.) 

Dove,  :;•;  Md.  .'>7'.t.     But  see  Walkow  415,  41  N.  Y.  Supp.  219. 

v.    Kingsley,  45  Minn.  283,  47  X.  W.  *  McAninch  v.  Dennis,  123  Ind.  21, 

Rep.   807;   contra,  Bea.)   v.    Lehman-  22  N.  E.  Rep.  881. 

Durr  Co. ,110  Ala.  446, 18  So.  Rep.  230;  5  Shone   v.   Lucas.  :;  Dowl.  &   Ry. 

Snyder  v.  Dangler,  44  Neb.  600,  63  N.  218;    Washburn    v.    Huntington,    78 

W.   Rep.  20,   holding  thai   bad  faith  Cal.  573,  21  Pac.  Rep.  305. 

may  !«■  t id  even  in  the  absence  of  6  Herrick  v.   Burst,    4  Hill  (N.  Y.) 

insolvency.       See     Sides    v.    Scharff,  652  ;  Riper  v.  Poppenhausen,  43  N.  Yr. 

'.»:;  Ala.  KMi,  9  So.   Rep.  228.  08,  75  ;  Potter  v.  McDowell,  31   Mo.  73. 

Lee    v.     Lee,    77    Ind.    253.      See  1  Curtis  v.  Leavitt,  15  N.  Y.  141. 


§  T44 


ALLEGATIONS   C<  »NCERN1  \< !    I !(  iNSl  I  >ERA  I  l<  »\. 


79 


at  the  time  of  making  said  deed,  did  not  have  sufficient 
property  remaining,  subject  to  execution,  to  pay  all  his 
said  debts,  but  by  means  of  said  conveyance  rendered 
himself  wholly  insolvent,  and  has  not  now,  nor  has,  at  any 
time  since  said  conveyance,  had  sufficient  property,  sub 
ject  to  execution,  out  of  which  said  debts  could  be  made," 
is  sufficient.1  The  insolvency  must  exist  both  at  the 
time  the  suit  was  brought  and  the  conveyance  was 
made.2 

§  144.  Allegations  concerning  consideration. —  As  regards 
allegations  of  consideration,  the  bill  will  be  upheld  if  it 
distinctly  recites  either  of  three  things  :  First,  that  the 
conveyance  was  wholly  without  consideration  ;  second, 
that  it  was  fraudulent  and  there  was  a  consideration 
which,  in  cases  of  technical  or  constructive  fraud,  the  com- 
plainant was  willing  to  allow  or  has  offered  to  return  ;  or 
third,  that  the  complainant  is  not  informed  and  has  no 
means  of  ascertaining  whether  there  was  a  consideration, 
and  that  these  facts  are  peculiarly  within  the  defendant's 
knowledge.  In  this  latter  case  the  bill  should  pray  for  a 
discovery.3 


1  Jennings  v.  Howard,  80  Ind.  216. 
See  Price  v.  Sanders,  60  Ind.  310; 
Miller  v.  Lehman,  87  Ala.  517,  6 
So.  Rep.  361  ;  York  v.  Rock  wood,  132 
Ind.  353,  31  N.  E.  Rep.  1110.  It  is 
said  by  Danforth,  J.,  in  an  important 
case  before  the  New  York  Court  of 
A 1  ipeals,  Van  Dyck  v.  McQuade,  86 
N.  Y.  44  :  "  An  individual  may  pur- 
chase property,  contract  debts,  incur 
new  liabilities,  and  keep  on  in  busi- 
ness, although  he  has  debts  unpaid  ; 
and  if  he  does  this  in  good  faith  and 
hope  of  a  more  prosperous  fortune,  he 
violates  no  moral  or  legal  duty.  And 
this  is  so,  although  at  the  time  of 
purchase  he  is  aware  that  liis  prop- 
erty is  not  sufficient  to  pay  his  debts 
(Nichols  v.  Pinner,  18  N.  Y.  295).    The 


principle  of  this  rule  applies  to  the 
managers  of  corporations  (Scull  v. 
Depeyster,  1  Edw.  Ch.  [X.  V.  |  513; 
Hodges  v.  New  England  Screw  Co., 
1  R.  I  312)."  In  Smith  v.  Collins.  94 
Ala.  3!)4.  10  So.  Rep.  334,  il  was  held 
that  a  person  who  has  sufficienl  prop- 
erty amenable  to  legal  process  i"  sat- 
isfy all    demands   is    not    insolvent, 

although  he  may  not  have  money  on 
hand  to  meet  his  liabilities  as  they 
may  fall  due  in  1  he  course  "I  trade. 

-  Petree  v.  Brotherton,  133  Ind.  692, 
32  N.  E.  Rep.  300:  Nevers  \.  Hack, 
138  Ind  260,  37  X.  E.  Rep.  791  ;  cf. 
Coot  v.Tibbals,  12  Wash.  307,  10  Pac. 

Rep.  935. 

■■  Des  Moines  &  M.  i;.  •  !o.  \.  Alley, 
16  Fed.  hep.  733.    See  ;'  1 17. 


280     FRAUDULENT  [NTENT  —  PLEADINGS  IX  EQUITY.    §§  145,   146 

£  145.  Fraudulent  intent.—  It  is  usually  of  vital  import- 
ance that  the  creditor  should  allege  in  the  bill  that  the 
conveyance  attacked  was  made  with  the  intent  to  hinder, 
delay,  or  defraud  creditors.1  The  effect  of  intent,  as 
related  to  fraudulent  alienations,  is  elsewhere  made  a 
special  subject  of  discussion.2  We  may  here  observe 
that  an  averment  to  the  effect  that  the  grantee,  the 
debtor's  wife,  gave  no  consideration,  and  that  the  whole 
consideration  came  from  the  debtor,  sufficiently  shows 
bad  faith  or  fraudulent  intent  on  her  part.3  An  intent 
to  defraud  is  properly  pleaded  by  an  allegation  of  such 
intent  without  alleging  any  fact  to  show  such  intent.4 
There  is  manifestly  in  this  regard  a  distinction  between 
pleading  fraud  and  pleading  fraudulent  intent. 

£  146.  Pleading  in  equity.  -  -  The  plaintiff's  title  and  claim 
to  the  assistance  of  a  court  of  equity  must  always  be  ex- 
posed by  the  pleadings  ;  but  the  style  and  character  of 
pleading  in  equity  has  always  been  of  a  more  liberal  cast 
than  is  permitted  in  other  courts,5  as  mispleading  in  mat- 
ter of  form  has  never  been  held  to  prejudice  a  party,  pro- 
vided the  whole  case  is  just  and  right  in  matter  of  sub- 
stance, and  supported  by  proper  evidence.0  As  a  credit- 
ors' bill  is  often  brought  for  a  discovery  as  well  as  for 
relief,  the  complainant  is  at  liberty  to  avail  himself  of 
any  objections  to  proceedings  on  the  part  of  the  defend- 
ant affecting  his  rights,  even  though  not  specified  or 
charged  in  the  bill.  This  rule  results  from  the  necessity 
of  the  case,  &s  a  creditor  cannot  be  supposed  to  be 
thoroughly   acquainted  with  the   conduct   of   his    debtor 

1  See  Morgan  v.  Bogue,  7  Neb.  434;  4  Union  Nat.  Bank  v.  Reed,27Abb. 

Eutchinson  v.   Firsl    Nat.    Hank,  133  N.  C.  5. 

h  .1.  283,  30  X.  E.  Rep.  952.     See  §§  9,  See  §  60. 

10,  11.  "Tiernan  v.  Poor,  1  Gill  &  J.  (Md.) 

■  hap.  XIV.     See§3  9,  10.  11.  21G  ;    19  Am.   Dec.     225.       See   §   CO. 

8  Newman  v.  Cordell,  1:;  Barb.  (N.  Ridgely  v.  Bond,  18  Md.  450 ;  Warner 

Y.    148.  v.  Blakeman,  4  Keyes  (N.  Y.)  507. 


§§  14/,    14s      SEEKING  DISCOVERY        EXCUSING   I   VCIIES.  _\X  I 

toward  third  persons,  especially  when,  as  is  generally  the 
case  in  fraudulent  transactions,  efforts  have  been  made  to 
conceal  the  circumstances  from  the  public.1 

§  147.  Seeking  discovery. —  The  complainant,  especially 
if  he  is  prosecuting  in  a  representative  capacity,  as,  for 
instance,  an  assignee  in  bankruptcy,  in  seeking  to  set 
aside  a  fraudulent  conveyance  of  real  and  personal  prop- 
erty, has  the  right,  as  ancillary  to  the  principal  relief,  to 
have  a  discovery  from  the  defendants,  and  he  properly 
seeks  it  with  a  view  to  supply  the  deficiency  in  his  own 
knowledge  ;  and  his  ignorance  of  the  particulars  sought 
not  only  entitles  him  to  the  discovery,  but  excuses  the 
want  of  more  precise  specification  of  the  particular  fraud 
alleged.3  Since  parties  in  interest  have  been  allowed  to 
give  testimony  as  witnesses,  bills  of  discovery  have  been 
in  a  measure  superseded.3 

§  148.  Excusing  laches  —  Concealment  of  fraud.  —  It  fre- 
quently becomes  vitally  important  to  excuse,  by  appropri- 
ate recitals  in  the  bill,  apparent  laches  on  the  part  of  the 
creditor  in  commencing  the  suit.4  In  Forbes  v.  Overby,5 
which  was  a  bill  filed  by  an  assignee,  charging  fraud  and 
conspiracy,  and  praying  for  a  discovery  and  disclosure,  the 
defendants  contended,  upon  a  motion  to  dissolve  an  injunc- 
tion, that  the  bill  was  insufficient  in  form  and  substance, 
and  ought  to  be  dismissed  ;  first,  because  of  complain- 
ant's laches  in  bringing  this  suit  (it  having  been  brought 


1  Burtus  v.  Tisdall,  4  Barb.  (N.  Y.)  Y.)  283  ;  Mountford  v.  Taylor,  6  V, 
580.  Jr.  788. 

2  Verselius  v.  Verselius,  9  Blatchf.  3  Field  v.  Hastings  A  Bradley 
190,  per  Woodruff,  J.  Cargill  v.  Co.,  65  Fed.  Rep.  279:  Preston  v. 
Kountze,  86  Tex.  386,  22  8.  W.  Rep.  Smith,  06  Fed.  Rep.  884;  Ex  parte 
1015,    25     Id.    13.      See    Bowden    v.  Boyd,  105  U.  S.  657. 

Johnson,    107    U.   S.     263,    2    S.    C.  l  Lant    v.  Morgan's  Admr. ,  43  U.  S. 

Rep.    246,    per    Blatchford,    J.  :    Ex  App.  623. 

parte  Boyd,  105  U.  S.  653,  655  :  Hen-  5  4  Hughes,  441,  444. 

dricks  v.  Robinson,  2  Johns.  Ch.    (N. 


EXCUSING    LACHES.  §  148 

within  a  year  from  the  discovery  of  the  clue  to  the  fraud)  ; 
and  second,  because  the  bill  failed  to  set  forth  specifically 
the  impediments  to  an  earlier  prosecution  of  the  claim. 
It  was  objected  that  the  bill  did  not  explain  why  the  com- 
plainant had  remained  in  ignorance  of  his  rights,  and  that 
it  failed  to  recite  the  methods  employed  by  defendants  to 
fraudulently  keep  the  complainant  in  such  ignorance  ;  and 
that  it  did  not  disclose  how  and  when  the  complainant 
first  came  to  a  knowledge  of  the  matter  alleged  as  the 
basis  of  the  suit.  The  court  observed  that  there  had  been 
a  great  variety  of  decisions  upon  the  question  as  to 
what  lapse  of  time  was  sufficient  to  bar  cases  of  this 
character,  and  declared  the  general  rule  to  be  that  each 
suit  must  be  governed  by  its  own  peculiar  circumstances. 
The  case  under  consideration,  being  a  bill  for  a  discovery, 
was  distinguished  by  the  court,  on  that  ground,  from 
Badger  v,  Badger,1  and  it  was  said  that  a  court  would  not 
compel  a  complainant,  who  was  manifestly  ignorant  of  the 
particulars  of  a  fraud,  to  set  out  in  his  bill  the  very  par- 
ticulars concerning  which  a  disclosure  was  sought. 

Lord  Erskine  said  :  "  No  length  of  time  can  prevent 
the  unkennelling  of  a  fraud."  In  Alden  v.  Gregory,3 
Lord  Northington  exclaims:  "The  next  question  is  in 
effect  whether  delay  will  purge  a  fraud?  Never  while  I 
sit  here  !  Every  delay  arising  from  it  adds  to  the  injus- 
tice, and  multiplies  the  oppression."  Mr.  Justice  Story 
stated  the  rule  as  follows  :*  "It  is  certainly  true  that 
length  of  time  is  no  bar  to  a  trust  clearly  established  ; 
and  in  a  case  where  fraud  is  imputed  and  proved,  length 
of  time  ought  not,  upon  principles  of  eternal  justice,  to 
be  admitted  to  repel  relief.  On  the  contrary,  it  would 
seem  that  the  length  of  time  during  which  the  fraud  has 
been  successfully  concealed  and    practiced   is  rather  an 


2  Wall  87,  and  infra.  a  Prevosi  v.  Gratz,  6  Wheat.  497. 

2  Eden,  285 


§  149  EXPLAINING    DELAY.  283 

aggravation  of  the  offense,  and  calls  more  loudly  upon 
a  court  of  equity  to  give  ample  and  decisive  relief."  It 
must  be  remembered,  however:  First,  that  the  trust 
must  be  "clearly  established;"  second,  that  the  facts 
must  have  been  fraudulently  and  successfully  concealed 
by  the  trustee  from  the  knowledge  of  the  cestui  que 
trust}  Long  acquiescence  and  laches  by  parties  out  of 
possession,  are  productive  of  much  hardship  and  injustice 
to  others,  and  cannot  be  excused  but  by  showing  some 
actual  hindrance  or  impediment  caused  by  the  fraud  or 
concealment  of  the  parties  in  possession  which  will 
appeal  to  the  conscience  of  the  chancellor.  The  party 
who  makes  such  an  appeal  should  set  forth  in  his  bill 
specifically  what  the  impediments  to  an  earlier  prosecu- 
tion of  his  claim  were,3  how  he  came  to  be  so  long  igno- 
rant of  his  rights,  and  the  means  used  by  the  respondent 
to  fraudulently  keep  him  in  ignorance;  and  how  and 
when  he  first  came  to  a  knowledge  of  the  matters  alleged 
in  the  bill.  Otherwise  the  courts  will  not  grope  after  the 
truth  of  facts  involved  in  the  mists  and  obscurity  conse- 
quent upon  a  great  lapse  of  time.3 

§.  149  Explaining  delay  —  Discovery   of  fraud.  —  In   cases 
where  it  is  sought  to  avoid  the  statute  of  limitations,  or 


'Badger  v.  Badger,  2  Wall.  92.     In  from   the  facts    pleaded.     As  in  the 

Felix  v.  Patrick,  145  U.  S.  331,  12  S.  case  of  any  oilier  Legal  conclusion,  ii 

C.  Rep.  862,   the  court  say :      "  We  is  not    sufficient    to    make    a    mere 

are  left  to  infer  that  his  concealment  averment  thereof,  bul  tin'  facts  from 

was  that  of  mere  silence,  which  is  not  which    the   conclusion    follows    musl 

enough.     Wood  v.  Carpenter,  101  U.  themselves  be  pleaded."    LadyWash- 

S.  135,  143;  Boyd  v.  Boyd,   27  Ind.  ington  Consol.  Co.  v.  Wood,   113  Cal. 

429;    Wynne  v.  Cornelison,    52   Ind.  486. 
312."  ;;  Mammon. 1    v.    Hopkins,  1  13    I'.  S. 

2  "  '  Discovery '    and     'knowledge'  252,    12   S.    C.    Rep.  418;    PearsalJ    v. 

are      not     convertible     terms,      and  Smith,   149  I'.   S.  236,    13  S.    C.  Rep. 

whether  there   has  been  a    '  discov-  KM  ;  Kirby  v.  Lake  Shore,  etc.  R.  I.'. 

ery'    of   the    facts    'constituting  the  Co.,  120  U.  S.  137,7  S.   <  '.    Rep.    130; 
fraud,'    within   the  meaning  of  the  .   Wollensak   \.    Reiher,    115    U.   S.    101, 

statute  of  limitations,  is  a  question  of  5  S.  C.  Rep.  1 137. 
law  to  be   determined   by  the   court 


284  DISCOVERY    OF    FRAUD.  §   149 

rather  to  come  within  the  exception  to  it,  the  plaintiff  has 
been  held  to  stringent  rules  of  pleading  and  evidence. 
"  Especially  must  there  be  distinct  averments  as  to  the 
time  when  the  fraud,  mistake,  concealment,  or  misrepre- 
sentation was  discovered,  and  what  the  discovery  is,  so 
that  the  court  may  clearly  see  whether,  by  ordinary  dili- 
gence, the  discovery  might  not  have  been  before  made."1 
This  is  necessary  to  enable  the  defendants  to  meet  the 
fraud  and  disprove  the  alleged  time  of  its  discovery.2 
A  general  allegation  of  ignorance  at  one  time,  and  of 
knowledge  at  another,  is  of  no  effect.  If  the  plaintiff 
made  any  particular  discovery,  it  should  be  stated  when 
it  was  made,  what  it  was,  how  it  was  made,  and  why  it 
was  not  made  sooner.3  Fraud  that  will  arrest  the  run- 
ning of  the  statute  must  be  secret  and  concealed,  and  not 
patent  or  known.4  The  party  seeking  to  elude  the  stat- 
ute by  reason  of  fraud  must  aver  and  show  that  he  used 
due  diligence  to  detect  it;b    and  if  he  had  the  means  of 

Wood  v.  Carpenter,  101  U.  S.  140;  S.  C.  Rep.  382;  Bailey  v.  (Mover,  21 

Stearns   v.    Page,   7  How.   819,  829;  Wall.  342 ;  Gifford  v.  Eelms,98U.S. 

National  Bank  v.  Carpenter,  101  U.  S.  248  ;  Upton  v.  McLaughlin,  105  U.  S. 

.-)UT  ;  Rosenthal  v.  Walker,  111  U.  S.  640. 

190,  4  S.   C.  Rep.  382;  Wollensak  v.  *  In    Hardt  v.   Heidweyer,    152  U. 

Reiher,  115  U.  S.  96,  5  S.  C.  Rep.  1137  ;  S.     558,    560,     14     S.    C.     Rep.    G71, 

Ajrnett    v.    Coffey,    1    Col.    App.    :!4,  the  court    says:     "It   is  well  settled 

27    Pac.    Rep.    014  ;    .Morrill   v.   Little  that  a  party  who  seeks  1.)  avoid  the 

Falls  Mfg.  ('<>..  ,-,;;  Minn.  371,  21  L.  R.  circumstances  of  an  apparently  un 

A.  171,  55  X.  W.  Rep.  547.  reasonable  delay  in   the   assertion  of 

'Moore    v.   Greene;    1!)    How.    72;  his  rights  on  the  ground  of  ignorance 

Beaubien    v.   Beauhien,   23   Id.    190  ;  must   allege  and   prove,  not    merely 

Badger  v.  Badger,  2  Wall.  95.  the  fact  of  ignorance,  l>nt  also  when 

•  hit  v.  Hilton,  1  (int.  C.  C.  230.  and  how  knowledge  was  obtained,  in 

1  Martin    v.  Smith,  1  Dill.  85.     This  order   that   the  court   may  determine 

Case  Contains  a  full  review  Of  the  an-  whether  reasonable  ell'ort    was   made 

thorities.     See  also  McLain  v.  Ferrell,      by  him  to  ascertain  the  facts 

1  Swan  (Tenn.)  4S ;  Buckner  v.  Cal-  Tested  by  this  rule,  it  is  apparent 
cote,  28  Miss.  432;  Cook  v.  Lindsey,      that  this  bill  must  be  held  deficient 

:;i     MiSB.     451  :    I'baleii     \.    Clark.    1!)       in     not      showing       how     knowledge 

Conn.  121;  Moore  v.  Greene,  2  Curt,  of  the  wrongs  complained  of  wasob- 
C.  C  202,  affi'd  19  Bow.  (ii),  72;  tained  by  the  plaintiffs.  It  is  alleged 
Rosenthal  v.  Walker,  111  U.  S.  189,  A     that   they   were  ignorant,  and   now 


§  149  Disci  (VERY    I  )l    I  k  \i   D. 

discovery  in  his  power  he  will  be  held  to  have  known  it.' 
In  Cole  v.  McGlathry,2  it  appeared  that  the  plaintiff  had 
provided  the  defendant  with  money  to  pay  certain  debts. 
The  defendant  falsely  affirmed  that  he  had  paid  them, 
and  fraudulently  kept  possession  of  the  money.  It  was 
decided  that  the  plaintiff  was  not  entitled  to  recover  for 
the  reason  that  he  had  at  all  times  the  means  of  dis- 
covering the  truth  of  the  statements  by  making  inquiries 
of  the  parties  who  should  have  received  the  money.  This 
principle  is  further  illustrated  in  the  analogous  case  of 
McKov/n  v.  Whitmore,3  in  which  it  appeared  that  the 
plaintiff  had  handed  the  defendant  money  to  be  deposited 
for  the  plaintiff  in  bank.  The  defendant  told  the  plain- 
tiff that  he  had  made  the  deposit.  It  was  held  that  even 
though  the  statement  was  false,  and  made  with  a  fraudu- 
lent design,  the  plaintiff  could  not  recover  because  he 
might  at  all  times  have  inquired  at  the  bank  and  learned 
the  truth.4  In  Boyd  v.  Boyd,5  it  was  ruled  that  the  con- 
cealment which  would  avoid  the  statute  must  go  beyond 
mere  silence.  It  must  be  something  done  to  prevent  dis- 
covery. The  concealment  must  be  the  result  of  positive 
acts.6  An  allegation  that  the  defendants  pretended  and 
professed  to  the  world  that  the  transactions  were  bona  fide 
was  looked  upon  as  being  too  general.  In  Wood  v.  Car- 
penter,7 a  pleading  which   reads  as    follows  :     *'  And   the 

have  knowledge:  and  that  they  ac-  14   8.  C.  Rep.  071  ;   Stearns  v.    I 

quired     such     knowledge    within    a  7  How.  829. 

month  prior  to  bringing  the  suit  :  but  -  9  Me.  131. 

how  they  acquired  it,  and  why  they  :;  31  Me.  448. 

did  not  have  the  same  means  of  as-  4  See,  further,   Rouse    v.  Southard, 

certaining    the    facts    before,  is  not  39  Me.  404  ;  Woods  v.  James,  87  Ky. 

disclosed."  513,  9  S.  W.  Rep.  513. 

1  Buckner  v.  Calcote,  28  Miss.  432,  5  27  Ind.  429;  Dorsey  Machine  ('■-. 

434.     See  Nudd  v.  Hamblin,  8  Allen  v.  McCaffrey,    139  In- 1.   :.:,;.  38  K 

(Mass.)    130.      Compare   Baldwin    v.  Rep.  208. 

Martin,  35  N.  Y.  Super.  Ct,  98;  Bar-  '  Stanley  v.  Stanton,  36  Ind.  145. 

lowv.  Arnold.  6  Fed.  Rep.  355;  Erick-  '  101    U.S.    135;     Hard)    v.    II.  M 

son  v.  Quinn,  3  Lans.  (N.  Y.)  302  ;  weyer,  152  U.  S.  559,  lis  <  .  Rep.  671. 
Hardt  v.  Heidweyer,  152  U.  S.  559, 


DISCOVERY    OF    FRAUD. 


§  '49 


plaintiff  further  avers  that  he  had   no  knowledge  of  the 

facts  so  concealed  by  the  defendant  until  the  year  a.  D. 
i  S 7 2 ,  and  a  few  weeks  only  before  ^the  bringing  of 
this  suit,"  was  held  to  be  clearly  bad.  The  court  in 
this  case,  in  a  critical  and  exhaustive  opinion,  review 
many  of  the  cases  which  have  just  been  considered,  and 
then  observe  that  a  wide  and  careful  survey  of  the 
authorities  leads  to  the  following  conclusions:  First, 
the  fraud  and  deceit  which  enabled  the  offender  to  do  the 
wrong  may  precede  its  perpetration.  The  length  of  time 
is  not  material,  provided  there  is  the  relation  of  design 
and  its  consummation.  Second,  concealment  by  mere 
silence  is  not  enough.  There  must  be  some  trick  or  con- 
trivance intended  to  exclude  suspicion  or  prevent  inquiry. 
Third,  there  must  be  reasonable  diligence,  and  the  means 
of  knowledge  are  the  same  thing  in  effect  as  knowledge 
itself.  Fourth,  the  circumstances  of  the  discovery  must 
be  fully  stated  [pleaded]  and  proved,  and  the  delay  which 
has  occurred  must  be  shown  to  be  consistent  with  the 
requisite  diligence.1 

In    New    York    the    statute    expressly    provides  that, 
in  actions  to  procure  a  judgment  other  than  for  a  sum  of 


1  In  Erickson  v.  Quinn,  47  X.  Y. 
II:;.  Rapallo,  .1.,  said  :  "The  funda- 
mentaJ  fait  from  which  the  conclu- 
sion of  a  fraudulent  intent  is 
drawn,  is  i lie  absence  of  any  valu- 
able consideration  for  the  convey- 
ance. So  long  as  tin'  creditor  was 
ignoranl  of  thai  essential  ami  con- 
trolling fact,  the  statute  ought  not 
to  run  againsl  him."  In  Dorsey 
Machine  <  !o.  v.  Mc(  Jaffrej  ,  139  Ind. 
39  X.  E.  Rep.  '.'us,  thecourl  says  : 
•'In  -nit-  of  equitj  t  he  decided  weigh! 
of  authority  is  in  favor  of  the  propo- 
sition t  li.it  «  here  a  pari  \  has  been 
injured  by  l  he  fraud  of  am 't  her,  and 
1 1  and  i  concealed,  or  is  of  such 
cha >  ■  conceal  it  -ell',  whereby 


the  injured  party  remains  in  igno- 
rance of  it  without  any  fault  or  want 
of  diligence  on  his  part,  the  bar  of  the 
statute  does  not  begin  to  run  until 
the  fraud  is  discovered,  though  there 
be  no  special  circumstances  or  efforts 
on  tlie  part  of  the  person  committing 
the  fraud  to  conceal  it  from  the 
knowledge  of  the  other  party.  Wear 
v.  Skinner,  46  Md.  265  ;  Booth  v. 
Warrington,  1  lit.,,  I'.  ( '.  Ki:;;  Fisher 
v.  Tuller,  12-2  Ind.  31,  2:!  N.  E.  Rep. 
523;  Stearns  v.  Page,  7  How.  (TJ.  S.) 
819  :  Moore  v.  Greene,  lit  Bow.  1 1'. 
s  i  69  :  Sherwood  v.  Sutton,  5  Mason. 
il'.S)  l  l:;  ;Snodgrass  v.  Branch  I'.k., 
25  Ala.  161." 


g  T  50  COMPLAINTS    BAD    FOK    Ml    I    Ml   UlIOUSNESS. 

money,  on  the  ground  of  fraud,  the  cause  of  action  is  not 
deemed  to  have  accrued  till  the  discover)-  of  the  facts 
constituting  the  fraud.'  It  has  been  held  that  a  knowl- 
edge of  the  fraud  will  he  imputed  where  a  party 
deliberately  shuts  his  eyes  to  the  facts  which  call  for 
investigation,3  though  this  question  of  what  constitutes 
notice  is  one  that  is  much  debated. 

>J  150.  Complaints  bad  for  multifariousness.  —  Judge  Story 
says  that  multifariousness  is  "  the  improperly  joining  in 
one  bill  distinct  and  independent  matters,  and  thereby 
confounding  them;  as,  for  example,  the  uniting  in  one 
bill  of  several  matters,  perfectly  distinct  and  unconnected, 
against  one  defendant,  or  the  demand  of  several  matters 
of  a  distinct  and  independent  nature  against  several 
defendants  in  the  same  bill."  3  It  is  also  said  :  "  What  is 
more  familiarly  understood  by  multifariousness  as  applied 
to  a  bill,  is  where  a  party  is  brought  as  a  defendant  upon  a 
record,  with  a  large  portion  of  which,  and  of  the  case  made 
by  which,  he  has  no  connection  whatsoever."4  In  United 
States  v.  Bell  Telephone  Company,5  Mr.  Justice  Miller 
used  these  words  :  "  The  principle  of  multifariousness  is 
one  very  largely  of  convenience,  and  is  more  often 
applied  where  two  parties  are  attempted  to  be  brought 
together  by  a  bill  in  chancery  who  have  no  common 
interest  in  the  litigation,  whereby  one  party  is  compelled 
to  join  in  the  expense  and  trouble  of  a  suit  in  which  he 
and  his  co-defendant  have  no  common  interest,  or  in 
which  one  party  is  joined  as  complainant  with  another 
party  with  whom  in  like  manner  he  either  has  no  interest 
at  all,  or  no  such   interest  as  requires  the  defendant    t<> 


1  N.  Y.  Code  Civ.  Proc.  §  382.  Story's  Ex.  PI.  ;  271.     See  Walker 

2  Higgins  v.  Crouse,  147  N.  Y.  411,  v.  Powers,  10!  U.  S.  251. 

42  N.  E.  Rep.  6.     Set',   also,  Gillespie         'Story's   Eq.  PI.  §  530.     See  Camp 

v.  Cooper,  36  Neb.  775,  55  V  W.  Rep.  bell  v.  Mackay,  1  Mylne  &  Cr.  61  I 
302.  '  L28  U.S.  352. 


288 


II  I    U3INGS    lll-.l.li    NOT    MULTIFARIOUS. 


§  151 


litigate  it  in  the  same  action."1  The  authorities  bearing 
upon  this  question  are  very  numerous,  but  there  is  deduci- 
ble  from  them  all  no  positive  inflexible  rule  as  to  what,  in 
the  sense  of  courts  of  equity,  constitutes  multifariousness, 
which  is  fatal  on  demurrer.2  Indeed  it  seems  to  be 
generally  recognized  as  an  impossibility  to  formulate  a 
general  rule  as  to  what  is  considered  multifariousness  ; 
every  case  must  be  governed  by  its  own  circumstances, 
and  the  court  must  exercise  a  sound  discretion  on  the 
subject.3  The  rule  in  relation  to  multifariousness,  say 
the  Supreme  Court  in  Iowa,  is  one  of  convenience,  and 
though  the  matters  set  forth  in  the  pleadings  are  distinct, 
yet  if  justice  can  be  administered  between  the  parties 
without  a  multiplicity  of  suits,  the  objection  will  not  pre- 
vail.4 The  objection  that  the  bill  is  multifarious  is 
always  discouraged  by  the  courts  when,  instead  of 
advancing,  it  will  defeat  the  ends  of  justice.5 


§  151.  Pleadings  held  not  multifarious.  —  Such  being  the 
general  condition  of  the  authorities  as  to  multifarious  plead- 
ings,   it    follows    that    the    practitioner    must    rely    upon 


'  Citing  Oliver  v.  Piatt,  3  How. 
333;  Walker  v.  Powers,  104  U.  S. 
245 

1  De  Wolf  v.  Sprague  Mfg.  Co., 
49  Conn.  292.  See  generally  Att'y 
General  v.  Cradock,  3  Mylne  &  Cr. 
85  ;  Knye  v.  Moore,  i  Sim.  &  S.  01  ; 
Kensington  v.  White,  :'.  Price,  164; 
I  lornwell  v.  Lee,  11  I  lonn.  524  ;  Mid- 
dletown  Sav.  Bank  v.  Baoharach,  46 
Conn.  522 ;  Board  of  Supervisors  v. 
Deyoe  71  X  Y.  225;  Brinkerhoff  v. 
Brown,  6  Johns.  Ch.(N.  Y.i  151  ;  New 
York,  &  X.  II.  I:  I.'.  Co.  v.  Schuyler, 
i;  X.  Y.  608. 

( raines  v.  Chew,  2  I  tow.  619  ; 
Oliver  v.  Piatt,  ::  How.  333.  See  .Me. 
Lean  v.  Lafayette  Bank,  :!  McLean, 
LIS  ;  A.bbo1  \.  Johnson,    32  X.  II.  26  ; 


Carter  v.  Kerr,  8  Blackf.  (Ind.)  373  ; 
Butler  v.  Spann,  27  Miss.  234  ;  Brown 
v.  Haven,  L2  Me.  164;  Richards  v. 
Pierce,  52  Me.  560;  Warren  v.  War- 
ren, 56  Me.  360;  Bugbee  v.  Sargent, 
23  Me.  269  ;  Weston  v.  Blake,  (il  Me. 
452.     See  §  132. 

4  Bowers  v.  Keesecher,  9  Iowa,  422. 
Marshall  v.  Means,  12  Ga.  61  ; 
Stephens  v.  Whitehead,  75  Ga.  298. 
Where  two  distinct  subjects  are  em- 
braced in  a  bill,  e.  (/..  the  avoidance 
of    a     marriage    settlement    ami    the 

annulment  of  a  will,  though  the 
necessary  parties  to  the  suit  may  he 
the  same,  their  interests  and  attitude 
are  decidedly   at    variance,  ami    the 

hill  is  had  for  multifariousness.  Mc- 
Donnell v.  Baton,  18  Fed.  Rep.  710. 


§  15'  PLEADINGS    III. I  I)    NOT    Ml    I   III   VRK  I  289 

instances,  and  illustrations  drawn  from  reported  cases,  for 
his  guidance. 

In  a  suit  before  the  Supreme  Judicial  Court  of  New 
Hampshire,1  it  was  decided  that  it  was  not  multifarious  to 
join  in  a  creditor's  bill,  as  parties  defendant  with  the  debtor, 
several  persons  to  whom  he  conveyed  distinct  parcels  « if 
property,  out  of  which  the  creditor  sought  satisfaction  of 
his  debt,  although  such  persons  might  have  no  common 
interest  in  the  several  parcels  conveyed/-'  And  in  I  Hmrnock 
v.  Bixby,3  it  was  held  that  a  demurrer  for  multifariousness 
would  hold  good  only  when  the  plaintiff  claimed  several 
matters  of  a  different  nature,  and  not  when  one  general 
right  was  asserted,  although  the  defendants  might  have 
separate  and  distinct  rights.  The  same  principle  is  recog- 
nized in  Boyd  v.  Hoyt.4  That  was  a  case  of  a  creditor's 
bill  brought  to  reach  property  of  a  judgment-debtor  which 
has  been  fraudulently  transferred  to  two  or  more  persons 
holding  different  portions  of  it  by  distinct  conveyances, 
and  it  was  decided  that  such  persons  might  be  joined. 
The  chancellor  lays  it  down  that  when  the  object  of  a  suit 
is  single,  but  different  persons  have  or  claim  separate  inter- 
ests in  distinct  or  independent  matters,  all  connected  with 
and  arising  out  of  the  single  object  of  the  suit,  the  com- 
plainant may  bring  such  persons  before  the  court  as 
defendants,  so  that  the  whole  object  of  the  bill  may  be 
effected  in  one  suit,  and  further  unnecessary  and  useless 
litigation  prevented.  The  case  of  Morton  v.  Weil8  is  an 
important  illustration  in  point.  Creditors  by  different  judg- 
ments united  in  brineinea  suit  against  the  executors  under 
the  will  of  a  decedent,  alleging  the  fraud  of  that  person  in 

1  Chase  v.  Searles,  45  N.  H.  519.  The  debtor  and  all  persons  through 
See  Hale  v.  Nashua  &  L.  R.  R.,  60  N.  whom  hr  lias  conveyed  the  prop*  n\ 
H.   339.  as  well  as  the  pi*esen1   holder  ma\  '"• 

2  See  §§  54,  55,  132.  j<>i I.      Crafl    \.    Wilcox,    102    Via. 

3  20  Pick.  (Mass.)  377.  378,  1  I  So.  Rep.  653. 

4  5  Paige  (N.  Y.)  05.     See  Rineharl  533  Barb.  (X.  Y.  1  30. 
v.  Long,  95  Mo.  396,  8  S.  W.  Rep.  559. 

19 


290  PLEADINGS   HELD    NOT    MULTIFARIOUS.  §  I  5  I 

contracting  the  debts,  and  joined  as  defendants  various  par- 
ties having  liens  upon,  or  title  to,  the  property  in  question 
by  reason  of  judgments  or  assignments,  alleging  that  such 
liens  or  titles  were  fraudulently  obtained,  and  praying  that 
the  same  might  be  vacated,  and  the  defendants  compelled 
to  account  for  and  pay  over  the  property.  On  demurrer  to 
the  bill  it  was  decided  that  the  parties  to  it  were  properly 
joined,  and  that  in  other  respects  it  was  sufficient.1  In 
anothercase,2  a  creditors'  bill  filed  against  the  debtor  and  his 
grantees,  for  the  purpose  of  setting  aside  a  number  of  volun- 
tary conveyances,  severally  made  to  each  of  the  parties,  was 
held  to  be  good.  And  in  Harrison  v.  Hallum,3  the  court 
say  that  it  is  proper,  where  there  are  several  judgment-debt- 
ors in  the  same  judgment,  and  one  of  them  has  made  a 
fraudulent  conveyance  to  one  grantee,  and  another  has 
made  a  similar  conveyance  to  another  grantee,  and  a  third 
has  made  a  like  conveyance  to  still  another  grantee,  to 
unite  all  the  debtors  and  their  several  fraudulent  grantees 
in  one  common  bill  for  the  relief  of  the  judgment-cred- 
itors. Again,  where  a  debtor,  with  intent  to  defraud  his 
creditors,  purchased  land,  causing  the  deed  to  be  made 
to  his  wife,  who  participated  in  the  fraud,  and  conveyed 
the  land  to  another  person  with  the  same  intent,  who  in 
turn  conveyed  it  to  a  third,  both  grantees  being  cognizant 
of  the  fraud,  it  was  held,  in  an  action  brought  by  a  cred- 
itor to  set  aside  the  conveyances,  that  both  transactions 
being  of  the  same  nature,  though  different  in  form,  could 
be  properly  joined  in  the  same  complaint.4     A  bill  is  not 


See   Lawrein •<•  v.  Hank  of  the  Re-  Hicks  v.  Campbell,  1!)  X.  J.  E<].  183; 

public,  35  N.  V.  320  :  Reed  v.  Stryker,  Randolph  v.  Daly,  16  N.  J.  Eq.  313. 

L2   Abb.   Pr.    (N.    Y.)    IT;    Fellows  v.  -Williams  v.  Neel,  10  Rich.  Eq.  (S. 

Fellows,  1  Cow.  (N.  Y.i  682;  Lewis  v.  C.)  338. 

St.  Albans  Iron  and  Steel  Works,  50  5  CJoldw.  (Tenn.)  525. 

\i.  181  :  \xnold  \.  Arnold,  II  W.  Va.  'North  v.  Bradway,  9  Minn.   is;?. 

449;   Shafer   \.   O'Brien,  31    W.    Va.  See  Jones  v.  Morrison,  31  Minn.  140, 

606,  8  S.    E.  Rep.   298.    See,   further,  16  N.  W.  Rep.  854. 
Way  v.   Bragaw,  16  N.  J.    Eq.  213  ; 


§152  PLEADINGS    HELD    NOT    MULTIFARIOl  2f)I 

regarded  as  multifarious,  though  brought  to  recover  dif- 
ferent portions  of  the  estate  of  a  debtor  from  several 
defendants,  if  the  alleged  illegal  transfers  were  the  result 
of  a  common  purpose  on  the  part  of  the  defendants  to 
dismember  the  estate.1 

§  152.  —  The  cases  upon  this  subject  are  almost  without 
number.  In  De  Wolf  v.  Sprague  Mfg.  Co.,3  it  appeared 
that  the  plaintiff  held  a  judgment  lien  upon  certain  real 
estate  upon  which  a  trust-mortgage  had  been  executed, 
which,  if  valid,  was  entitled  to  priority.  The  suit  was 
brought  to  set  aside  or  postpone  the  mortgage,  on  the 
ground  that  it  was  void  against  the  complaining  creditor, 
and  for  a  foreclosure  of  the  judgment  lien,  and  for  pos- 
session, and  the  mort^a^ors  and  the  trust-mort^aofee 
were  made  defendants.  The  court,  after  protracted  argu- 
ment and  an  extended  review  of  the  authorities,  held  that 
the  bill  was  not  multifarious.  In  Parker  v.  Flagg,8  the 
court  says:  "The  bill  is  brought  by  the  executor,  repre- 
senting all  the  creditors  of  an  insolvent  estate,  to  set 
aside  conveyances  made  by  the  testator  of  all  his  prop- 
erty, real  and  personal,  in  fraud  of  those  creditors,  to  his 
wife,  who  is  the  sole  defendant ;  some  of  the  property 
consists  of  mortgages,  to  recover  which  the  plaintiff  has 
no  adequate  remedy  at  law  ;  all  the  conveyances  appear 
to  have  been  part  of  one  scheme,  and  no  objection  is,  nor, 
it  would  seem,  could  be  taken  to  the  bill  for  multifarious- 
ness. The  demurrer  was  erroneously  sustained,  and 
should  have  been  overruled."*  It  is  perhaps  unnecessary 
to  further  multiply  illustrations.  Some  of  the  cases  have 
certainly  gone  to  an  extreme  limit,  and  parties  have  been 


1  Van  Kleeck  v.  Miller,  per  Choate,  249  ( lonn.  282. 

J..  19  N.  B.  R.  486;   citing  Boyd  v.  3 127  Mass 

Hoyt,  5  Paige  (N.    Y.)  65;    Piatt  v.  4 Chase  v.  Redding,  13  Graj 

Preston,  19  N.  B.  R.  241.     See  Brad-  418;  Welsh  v.  Welsh,   105   Mass. 

ner  v.  Holland,  33  Hun  (N.  Y.)  290.  Gilson  v.  Butchiuson,  120  Mass.  27. 


2Q2  ALTERNATIVE    RELIEF.  §  1 53 

held  together  as  defendants  in  one  action  by  a  very 
slender  thread  of  reasoning.  The  St.  Louis  Court  of 
Appeals,  commenting  upon  the  subject,  says:  "The 
principle  that  it  is  not  sufficient  that  the  defendants  are 
all  concerned  in  some  general  charge,  such  as  fraud  on 
the  part  of  the  debtor,  or  that  as  grantees  of  distinct 
properties  by  distinct  conveyances  they  obtained  title 
through  him,  but  that  all  the  defendants  should  at  least 
have  an  interest  in  the  principal  point  in  issue  in  the  case, 
is  surely  of  some  value  as  a  general  test.  In  cases  like 
the  present  it  would  be  decisive.  Here  there  is  no  mate- 
rial issue  in  which  all  the  defendants  have  a  common 
interest,  and  consequently  no  tie  to  make  them  defend- 
ants in  one  suit It  is  obvious   that,  merely  from 

convenience  to  plaintiffs,  the  defendants  ought  not  to  be 
put  to  the  trouble  and  expense  of  litigating  matters  with 
which  they  are  unconnected."1  These  observations  were 
made  in  a  case  in  which  there  were  twenty  defendants 
having  a  common  source  of  title  from  an  alleged  fraudu- 
lent  grantor;  the  conveyances  were  separate  and  made 
at  different  times,  and  the  defendants  were  beneficiaries 
and  trustees  indiscriminately  joined.  The  bill  was  pro- 
nounced multifarious.  The  decision,  however,  can 
scarcely  be  harmonized  with  some  of  the  authorities 
already  discussed.2 

§  153.  Alternative  relief. —  In  Alabama  it  was  held  that 
a  creditors'  bill  maybe  filed  for  a  double  purpose  ;  asking 
in  the  alternative  to  have  two  or  more  conveyances  can- 
celled as  intended  to  hinder,  delay,  and  defraud  creditors, 
or  to  have  them  construed  as  together  constituting  a 
general  assignment  inuring,  under  the  statute  of  that 
State,    to    the    benefit    of    all     the    insolvent's    creditors 


1  Bobb  v.  Bobb,  8  Mo.  A.pp.  260.         Carious,  see  Richmond  v.  Erons,  LSI  U. 
\     to  lolls  held  not  t..  be  multi-     S.  27,  7  S.  C.Rep.  788. 


§§  154.  !55  PRAYER   OF   C<  tMPLAINT. 

equally.1  But  in  a  later  case  in  that  State/2  the  court 
feel  constrained  to  depart  from  and  overrule  the  decision 
upon  this  point. 

§  154.  Attacking  different  conveyances. —  The  fact  that  a 
plaintiff  seeks  to  set  aside  two  or  more  conveyances  as 
fraudulent,  does  not  require  that  each  conveyance  shall 
be  set  forth  in  a  separate  paragraph  as  the  basis  of  a 
separate  cause  of  action.  They  constitute  but  one  cause 
of  action,  the  fraudulent  disposition  of  his  property  by 
the  judgment-debtor.3 

§  155.  Prayer  of  complaint —Variance — Verification.  —  As 
a  general  rule  in  the  modern  procedure  a  mistake  in  the 
demand  for  relief  is  not  fatal.4  In  Buswell  v.  Lincks/' 
the  court  said:  "The  point  is  made  that  the  bill  was 
framed  upon  the  basis  of  a  claim  that  there  had  been  a 
fraudulent  trust-deed,  and  a  receiver  had  been  prayed  for, 
while  the  relief  given  in  setting  aside  the  fraudulent  con- 
veyance and  adjudging  a  sale  of  the  leasehold  under 
execution  was  inconsistent  with  the  prayer  of  the  com- 
plaint. The  sufficient  answer  to  this  proposition  is,  that 
the  judgment  was  such  as  the  court  was  bound  to  give 
upon  the  allegations  and  proofs  without  reference  to  the 
relief  demanded."  It  may  adapt  the  relief  to  the  exi- 
gencies of  the  case.0  And  where  the  bill,  in  addition  to 
the  general  demand  for  relief,  contained  a  prayer  that  a 
deed  be  set  aside,  it  was  held  that,  merely  because  of  a 
prayer  that  the  defendant  be  decreed  to  give  the  com- 
plainant  possession   of  the   land,  the  bill   would   not   be 

1  Crawford  v.  Kirksey,  50  Ala.  591.  gregation,  etc.,  St.  Francis,  138  N.  Y. 

8  Lehman   v.   Meyer,  67  Ala.  404;  459,  34  N.  E.  Rep.  281  ;  Valentine  v. 

Moog  v.  Talcott,  72  Ala.  210.  Richardt,  12G  N.  Y.  277,  27  N.  E.  Rep. 

3  Strong  v.  Taylor  School  Town-  255  ;  Murtha  v.  Curley,  90  N.  Y.  372. 
ship,    79    Ind.    208.      See   Wright  v.  B  8  Daly  (N.  Y.)  527. 

Mack,  95  Ind.  332.  6  Dudley  v.  Congregation,  etc.,  St. 

4  See  Bell  v.  Merrifield,  109  N.  Y.  Francis,  138  N.  Y.  459,  34  N.  E.  Rep. 
202,  10  N.  E.  Rep.  55 ;  Dudley  v.  Con-      281. 


294  PRAYER    OF   COMPLAINT.  §   155 

treated  as  a  bill  for  possession,  nor  dismissed  on  the 
ground  that  ejectment  was  the  proper  remedy.1  As  a 
general  rule  complainants  are  entitled  under  a  prayer  for 
general  relief,  to  any  judgment  consistent  with  the  case 
made  in  their  bill,"'  but  they  are  not  usually  entitled  to  a 
decree  covering  and  including  matters  not  referred  to  in 
the  pleadings,  and  as  to  which  the  respondents  have 
never  had  their  day  in  court.'5  The  court  will  not  hesi- 
tate to  dismiss  a  bill  which  presents  a  case  totally  differ- 
ent from  the  testimony  in  the  record;4  and  no  decree 
can  ordinarily  be  made  on  grounds  not  stated  in  the  bill. 5 
"  The  rule  is  explicit  and  absolute,  that  a  party  must 
recover  in  chancery  according  to  the  case  made  by  his 
bill  or  not  at  all,  'secundum  allegata]  as  well  as  'pro 
bata.1  '' G  Matters  not  charged  in  the  bill  should  not  be 
considered  on  the  hearing.7  If,  however,  the  special 
prayers  are  inapt  and  incongruous,  and  so  framed  that  no 
relief  can  be  granted  under  them,  the  court  under  the 
prayer  for  general  relief  may  render  any  appropriate  judg- 
ment consistent  with  the  case  made  by  the  bill.8  Courts 
of  equity  give  judgment  for  money  only  where  that  is  all 
the  relief  needed.9  The  bill  may  be  framed  in  a  double 
aspect,  and  ask  for  relief  in  the  alternative,  but  the  state 
of  facts  upon  which  relief  is  prayed  must  not  be  incon- 
sistent.1"     The    prayer    of    the    complaint    is    sometimes 


1  Miller  v.  Jamison,  24  N.  J.  Eq.  41.  Wright  v.  Delafield,  25  N.   Y.   266; 

SeeSedg.  &  Wail  on  Trial  of  Title  to  Gordon   v.   Reynolds,  114  111.   123,  28 

Land,  2nd  ed.,  .:  169.  N.  E.  Rep.  455. 

Bell  v.    Merrifield,    109  X.  Y.  206,  8  Bailey    v.    Ryder,   10  X.  Y.  370; 

16  N.  E.  Rep.  55.  Clark   v.    Krause,  2  Mackey  (D.   C.) 

Wilson    v.    Borr,    15    Iowa.   492;  573  ;  Eyre  v.  Potter,  15  How.  42. 

Tripp  v.  Vincent,  3  Barb.  Ch.  (N.  Y.t  •  Eunter  v.  Hunter,  10  W.  Va.  821. 

613;   Parkhursl  v.  McGraw,  24   Miss.  '  Annin  v.  Annin,  24 N.  J.  Eq.  188. 

L39;  Hovey  v.  Holcomb,  11  111.  660.  '  Bell  v.  Merrifield,  109  X.  Y.  807, 

•  Roberts  r.Gibson.6  II.  &J.  (Md.)  10  N.  E.  Rep.  55;  Murtha  v.  Curley, 

123;  TruesdeU    v.  Sarles,   104    N.   Y.  90  N.  Y.  872. 

10  N.  E.  Rep.  139.  10  Zell  Guano  Co.  v.  Heatherly,  38 

i..\     v.    Ryder,    10  X.   Y.   303;  W.  Ya.  410,  18  S.  E.  Rep.  611. 


§  156  AMENDMENT. 

resorted  to  in  determining  whether  the  action  is  legal  or 
equitable,  and  the  court  will  be  guided  by  the  relief  asked 
in  reaching  a  conclusion.1 

The  objection  that  a  bill  is  not  verified  is  immaterial, 
as  a  bill  in  equity  need  not  usually  be  sworn  to  unless  it 
is  sought  to  use  it  as  evidence  upon  an  application  for  a 
provisional  injunction  or  other  similar  relief.2 

§  156.  Amendment.  —  A  variance  between  the  actual  date 
of  the  judgment  and  that  set  forth  in  a  creditors'  bill 
based  on  it,  may  be  corrected  by  amendment  at  any  time 
during  the  proceedings  ;  but  as  the  complainant  is  not 
absolutely  confined  to  the  exact  date  stated  in  the  bill  the 
amendment  may  be  unnecessary.3  An  amendment  of  a 
bill  as  to  the  description  of  the  property,  under  well- 
established  rules  of  procedure  only  operates  from  the 
time  of  the  service  of  the  amended  pleading.4  The  bill 
may  be  amended  on  the  final  hearing  in  the  United  States 
Circuit  Court,  so  as  to  state  that  the  value  of  the  matter 
in  dispute  exceeds  five  hundred  dollars.5  Speaking  upon 
the  subject  of  amendments,  Davis,  J.,  said,  in  Neale  v# 
Neales  :G  "  To  accomplish  the  object  for  which  a  court  of 
equity  was  created,  it  has  the  power  to  adapt  its  proceed- 
ings to  the  exigency  of  each  particular  case,  but  this 
power  would  very  often  be  ineffectual  for  the  purpose, 
unless  it  also  possessed  the  additional  power,  after  a  cause 
was  heard  and  a  case  for  relief  made  out,  but  not  the  case 
disclosed  by  the  bill,  to  allow  an  alteration  of  the  plead- 
ings on  terms  that  the  party  not  in  fault  would  have  no 
reasonable  ground  to  object  to.  That  the  court  has  this 
power  and  can,   upon  hearing  the  cause,  if  unable  to  do 


1  O'Brien    v.   Fitzgerald,  143  N.  Y.  3  First  Nat.  Bank  of  Bf.  v.  Hosmer, 
377,  38  N.  E.  Rep.  371.                                 48  Mich.  200,  12  N.  W.  Rep.  212. 

2  Hughes  v.  Northern  Pacific  R.  R.  '  Miller  v.  Sherry,  2  Wall.  250. 
Co.  1  West  Coast  Rep.  24.                              'Collinson  v.  Jackson,8  Sawyer.858, 

6  9  Wall.  8. 


296  DESCRIPTION.  §  157 

complete  justice  by  reason  of  defective  pleadings,  permit 
amendments,  both  of  bills  and  answers,  is  sustained  by 
the  authorities." x  The  granting  of  amendments  of 
pleadings  in  chancery  rests  in  the  sound  discretion  of  the 
court.2 

§157.  Description  — lis  pendens. —Aside  from  interests 
not  liable  to  execution,  the  fact  that  a  creditor  is  com- 
pelled to  file  a  bill  in  equity  usually  implies  ignorance  on 
his  part  of  the  exact  character  and  form  in  which  the 
debtor  has  invested  or  secreted  his  property.  If  such 
were  not  the  case,  process  of  execution  would  be  invoked. 
It  should  not,  therefore,  be  necessary  to  particularly 
describe  or  indicate  in  the  complaint,  the  assets,  whether 
legal  or  equitable,  which  it  is  proposed  to  reach  by  the 
bill.3  Thus  a  bill  was  entertained  which  alleged  that  the 
defendant  "  has  equitable  interests,  things  in  action,  and 
other  property  which  cannot  be  reached  by  execution,  and 
that  he  has  also  debts  due  to  him  from  persons 
unknown."4  In  Miller  v.  Sherry5  the  original  bill  was 
in  the  form  of  a  creditors'  bill.  It  contained  nothing  spe- 
cific except  as  to  certain  transactions  between  the  debtor 
and  one  Richardson.  There  was  no  other  part  of  the 
bill  upon  which  issue  could  be  taken  as  to  any  particular 
property.  The  court  held  that  it  was  effectual  for  the 
purpose  of  creating  a  general  lien  upon  the  assets  of  the 
debtor,  as  a  means  of  discovery,  and  as  the  foundation 
for  an  injunction  and  an  order  that  the  debtor  execute  a 


'Citing  Mitford's  ChaDcery  Plead-  *  Lanmon  v.  Clark,  4  McLean,  18. 

in--.  326,  331  :  Story's  Equity  Pleading,  "The  jurisdiction  of  a  court  of  equity 

3  904,  905  ;   Daniel's  Chancery  Pr.  &  to  reach    the    property  of   a   debtor 

PI.  463,  466  ;  Smith  v.  Babcock,  3  Sum-  justly  applicable  to  the  payment  of 

tier,  583 :  McArtee  v.   Engart,  13  III.  his  debts,  even  when  there  is  no  spe- 

242.  cific    lifii    on    the    property,    is    un- 

'Gordon  v.   Reynolds,    111   III.   lis,  doubted."    Public  Works  v.  Colum- 

28  \.  E.  Rep.   155.  bia  College.  17  Wall.   .130. 

Shainwald   v.  Lewis,  6  Fed.   Rep.  52  Wall.  249. 
766. 


§  15/  DESCRIPTK  >N. 

conveyance  to  a  receiver.  Furthermore,  that  if  it  became 
necessary  to  litigate  as  to  any  specific  claim,  other  than 
that  against  Richardson  already  specified,  an  amendment 
to  the  bill  would  have  been  indispensable.  The  bill  did 
not  create  a  lis  pendens^  operating  as  notice  affecting  an  y 
real  estate.  To  have  that  effect  the  recital  in  the  descrip- 
tion must  be  so  definite  that  any  one  reading  it  can 
thereby  learn  what  property  is  intended  to  be  made  the 
subject  of  the  litigation.3  Where  the  complainant  in  a 
creditors'  bill  seeks  to  obtain  satisfaction  out  of  lands 
inherited  or  devised,3  and  is  unable  to  specify  the  lands, 
he  may  state  that  fact  in  the  bill,  and  call  upon  the  heirs 
to  discover  the  lands  devised  or  inherited,  so  that  they 
may  be  reached  by  amendment  of  the  bill  or  otherwise.1 
If  the  description  be  indefinite,  it  may  be  aided  by  the 
evidence.5 

The  rule  that  an  alienation  of  property  made  during  the 
pendency  of  an  action  is  subject  to  the  final  decree  is,  as 
shown  by  Mr.  Bishop,0  of  very  ancient  origin.  Murray 
v.  Ballou  "  is  the  leading  case  in  this  country.     The   doc- 


1  As  to  the  application  of  the  doc-  4  Parsons  v.  Bowne,  7  Paige  (N.  V.) 

trine  of  lispendens  to  creditors'  suits,  354.     See  §  117. 

see  Webb  v.   Read,  3  B.  Mod.  (Ky.)  Williams  v.    Ewing,  31    Ark.  235. 

119;  Jackson  v.    Andrews,  7  Wend.  The  circumstance  that  a  deed  did  ool 

(N.  Y.)  152.  give  an  accurate   description    of  the 

'-See  Griffith   v.    Griffith,  9    Paige  land  intended  to  be  conveyed  will  nol 

(N.  Y.)317.     Compare  Sharp  v.  Sharp,  defeat  asettlement  where  the  descrip- 

3  Wend.  (N.  Y.)  278;  King  v.  Trice,  3  tion  usvd  could  leave noonein  serious 

Ired.  (N.  C.)  Eq.   573;  McCauley  v.  doubt  as  to  the  laud  intended.     Wal- 

Rodes,  7  B.  Mon.  (Ky.)  4G2  ;  Brown  v.  lace  v.  Penfield,  106  U.  S.  263,  1  S.  ( '. 

John  V.    Farwell  Co.,   74   Fed.  Rep.  Rep.  216. 

764.  "Bishop  on  Insolvent  Debtors,  sup- 

3  Compare  Read  v.    Patterson,  134  plement,  §  238a. 

N.  Y.  128,  31  N.   E.  Rep.  445,  where  '  1  Johns.   Ch.    (N.    Y.)    566. 

creditors  sought  to  reach  property  in  Tilton    \.    Cofield,     93    LJ     S.     L68 ; 

the  hands  of  heirs  and  the  executor's  Thompson  v.  Baker,  Ml    I'.  S.  648,  12 

schedule  was  held  not  to  be  evidence  S.  C.    Rep.    89;  Tuttle  \    Turnei 

of  the  debts  due  by  the  testator.     See  Tex.    759,    773;   Union   Trusl    Co.    v. 

Adams  v.  Fassett,  73  Hun   (N.  Y.)  Southern   Inland    Nav.   <S    hup.    Co., 

430,  26  N.  Y.  Supp.  447.  130  U.  S.  570,  9  S.  ( '.  Rep.  606. 


I 'I  S<  RIPTION.  §  157 

trine  is  important  both  as  regards  the  titles  of  purchasers 
and  the  question  of  preferences  among"  judgment-cred- 
itors. In  Scouten  v.  Bender,1  where  an  assignment  was 
overturned,  it  was  decided  that  the  creditors  were  entitled 
to  satisfaction  of  their  judgments,  respectively,  out  of  the 
funds  derived  from  the  real  estate  in  the  order  of  priority 
of  the  judgments;  and  out  of  the  personal  fund  in  the 
order  in  which  the  bills  were  filed  and  the  equitable  liens 
created.  The  doctrine  of  lis  pendens,  it  may  be  further 
remarked,  is  said  to  have  no  application  to  corporate 
stock,2  or  negotiable  securities.3  Mr.  Justice  Bradley 
said  in  County  of  Warren  v.  Marcy  : i  "  Whilst  the  doc- 
trine of  constructive  notice  arising  from  lis  pcnde?is, 
though  often  severe  in  its  application,  is,  on  the  whole,  a 
wholesome  and  necessary  one,  and  founded  on  principles 
affecting  the  authoritative  administration  of  justice,  the 
exception  to  its  application  is  demanded  by  other  con- 
siderations equally  important,  as  affecting  the  free  oper- 
ations of  commerce,  and  that  confidence  in  the  instru- 
ments by  which  it  is  carried  on,  which  is  so  necessary  in 
a  business  community."  5  In  New  York,  where  an  action 
in  which  a  lis  pendens  was  filed  has  been  dismissed  and 
the  notice  canceled,  it  ceases  to  be  a  statutory  notice  to 
dona  fide  purchasers  of  the  premises  described  in  it.0  An 
attempt   to  discuss  the  various  phases  of  the   law    of   lis 


'3    Bow.     1'r.   (N.    Y.)    185.      See     affi'd   101   N.    Y.  656;    Davei rt   v. 

.'  1  32a.  Kelly,  42  N.  Y.  Hi:1.  ;  Van   Alslyne  v. 

"Holbrook  v.  New  Jersey  Zinc  Co.,  Cook,   25  N.   Y.  489;  Becker  v.  Tor- 

57  N.  V.  GIG.  ranee,    31    N.     Y.    631;    Boynton    v. 

'County   <»r   Warren  v.  Marcy,  97  Rawson,  1  Clarke (N.  Y.)  584;  Clafliri 

1     8.  '.in.  v.  Gordon,  39  Hun  (N.  Y.)  57  ;  Shand 

4  97  U.  S.  109.  v.  lianley,  71    N.  Y.  324  ;  Johnson  v. 

For   phases  of  the  doctrine  of  lis  Rogers,  15  X.  B.  R.  1,  13  Fed.  Cases, 

pendens,  and    of    the   rule  as  to  the  794;  Clarke  v.  kisi,  5  Fed.  ('as.  978, 

preference  obtain. . I    l.y  tiling  a  hill,  3  McLean,  (U.  S.)  494;  cf.  Stewart  v. 

Leitchv.   Wells,   48   X.   Y.    585;  [sidor,  5  Abb.  Pr.  N.  S.  (N.  Y.)  68. 

Fitch  v.   Smith,  10  Paige  (N.   Y)  9;  'Valentine    v.    A-ustin,   124  N.   Y. 

Albert  \.  Back,  20  J.  &  S.  (N.  Y.)  550,  400,  20  N.  E.  Rep.  973. 


§  I57;i  '  HANGE   OB    \  ENUE. 

pendens  is  not  possible  in  this  connection.  Certainly 
under  the  reformed  procedure  which  does  not  usually 
require  the  filing  of  the  pleadings  before  judgment  the 
old  doctrine  of  lis  pendens  cannot  be  said  to  relate  to 
innocent  purchasers  of  personal  property.1  The  excep- 
tions that  have  crept  into  the  rule  that  a  party  who  med- 
dles with  property  in  controversy  does  so  at  his  peril 
have  frequently  brought  the  proceedings  of  diligent 
creditors  to  naught. 

§  157a.  Change  of  venue  — Territorial  jurisdiction.  —  In 
New  York  State  a  motion  to  change  the  place  of  trial  of 
an  action,  brought  to  annul  a  fraudulent  conveyance,  to 
the  county  in  which  certain  real  estate  passing  under  the 
assignment  is  situated,  cannot  be  defeated  by  an  offer  on 
the  part  of  the  plaintiff  to  stipulate  that  he  will  nol 
attempt  to  reach  such  real  estate.2  When  a  court  of 
equity  attempts  to  act  directly  upon  real  or  personal 
property  by  its  decree  the  property  must  be  within  the 
territoral  jurisdiction  of  the  court.  "  It  is  equally  well 
settled  that  where  one  is  the  owner  of  land  or  other  prop- 
erty in  a  foreign  jurisdiction,  which  in  equity  and  good 
conscience  he  ought  to  convey  to  another,  the  latter  may 
sue  him  in  equity  in  any  jurisdiction  in  which  he  may  be 
found,  and  compel  him  to  convey  the  property.  The 
decree  in  such  case  directing  a  conveyance  of  the  prop- 
erty does  not  directly  affect  the  title  to  the  property,  yet 
the  enforcement  of  it  does  result  in  the  complete  change 
of  the  title.3 


1  Leitch  v.   Wells,   48  N.    Y.   G09 ;  502.     Compare    Acker  v.    Leland,   96 
Holbrook  v.  New   Jersey  Zinc  Co.,  57  N.  Y.  384. 

N.  Y.  610;  Zoeller  v.  Riley,  100  N.  Y.  8  Johnson  v.  Gibson,  116  III.  294,  6 

102,  2  N.  E.  Rep.  388.  N.  E.  Rep.  205. 

2  Wyatt  v.  Brooks,  42  Hun  (N.  Y.) 


CHAPTER  X. 


OF  THE  PLEA  OR  ANSWER 


sj   L58.  Answer  and    burden  of  proof. 
General  denial. 

159.  Avoiding  denial. 

160.  Answer    as     evidence     for    or 

against  co-defendant. 

161.  Pleading  to  the  discovery  and 

the  relief. 


162.  Particularity      of     denial       in 

answer. 
162a.  Bill  of  particulars. 

163.  Denying  fraud  or  notice. 

164.  Admission  and  avoidance. 
163.   Avoiding  discovery. 

166.  Affirmative  relief. 

167.  Waiver  of  verification. 


§  158.  Answer  and  burden  of  proof.  General  denial. — 
Usually,  as  we  have  seen,  in  creditors'  actions  to  reach 
assets,  or  bills  in  equity  to  annul  fraudulent  alienations, 
the  debtor  and  the  fraudulent  alienees  are  made  parties 
defendant.  The  latter  are  necessary  parties  to  the  end 
that  the  judgment  may  conclude  them,  and  the  court 
obtain  jurisdiction  over  and  possession  of  the  property  or 
assets  in  their  hands,  and  annul  the  colorable  transaction. 
It  is  manifest  that  the  defendant  alienee  has  rights  in  the 
suit  different  from  and  sometimes  superior  to  those  of  the 
debtor.  The  latter  is  naturally  concluded  by  the  judg- 
ment upon  which  the  bill  should  proceed,  and  can  with- 
hold from  his  creditor  nothing  but  exempt  property  or 
certain  trust  income  originating  from  third  parties.1 
The  alienee,  on  the  other  hand,  may  claim  to  be  a 
bona  fide  purchaser,  having  a  complete  title,  or  may 
show  the  absence  of  actual  fraud,  and  thus  be  allowed  to 
hold  the  property  as  security  for  the  amount  of  actual 
advances.  The  grantor  may  "  intend  a  fraud,  but  if  the 
grantee  is  a  fair,   bona  fide,  and  innocent  purchaser,   his 


See  Chap.  XXIII. 


g  1 5S  ANSWER     \\l>    BURDEN    OF    PROOF.  $01 

title,  is  not  to  be  affected  by  the  fraud  of  his  grantor."  ' 
It  follows  that  the  alienee  cannot  be  prejudiced  by  the 
fact  that  judgment /r<?  confesso  passes  against  tin-  debtor,2 
or  that  fraud  is  admitted  or  alleged  in  the  debtor's 
answer.3  The  defense  that  a  party  is  a  bona  fide  pur- 
chaser is  an  affirmative  defense  only  in  cases  where  fraud 
in  some  previous  holder  of  the  title  has  been  shown,1  and 
ordinarily  a  sworn  answer  responsive  to  a  direct  inter- 
rogatory or  specific  charge  of  fraud  must  be  accepted  as 
true  until  disproved.5  Fraud,  as  we  have  already  seen,6 
is  not  a  thing  to  be  presumed,  but  must  be  proved  and 
established  by  evidence  sufficient  for  that  purpose,' 
although,  as  already  made  manifest,8  it  is  sometimes  prac- 
tically a  legal  deduction  from  uncontroverted  facts,  or 
from  evidence  the  weight  of  which  is  practically 
conclusive.9  Distinct  and  even  inconsistent  grounds  of 
defense  may  be  set  up.10 

Where  a  defendant's  title  is  attacked  on  the  oround  of 
fraud  he  may,  under  a  general  denial,  introduce  any  proof 
showing  that  his  title  is  not  fraudulent.11  In  recent 
Colorado  cases  it  is  held  that  if  a  party  desires  to  subject 
property  held  by  a  vendee  under  apparently  valid  indicia 
of  ownership. to  the  payment  of  a  debt  of  his  vendor,  the 
attacking  party  must  plead  and  prove  the  facts  that  vitiate 
such   title,  whether   they   constitute   fraud   or   estoppel.1'- 

1  Sands  v.  Hildreth,  14  Johns.  (N.  "  Grover  v.  Grover,  3  Mil.  Ch.  35. 

Y.)  498,  per  Spencer,  J.:  Hollister  v.  s  See  g§  9,  10. 

Loud,  2  Mich.  310  ;  Kittering  v.  Par-  9  See  £  10. 

ker,  8  Ind.  44  ;  Loeschigk  v.  Bridge,  !0  Goodwin  v.    Wertheimer,   99  N. 

42  N.  Y.  423.     See  Chap.  XXIV.  Y.   Mil,    1    N.    E.    Rep.    404;    Societa 

*  Thames  v.  Rembert,  63  Ala.   501.  Italiana    v.    Sulzer,   138  N.  Y.  172,  34 
See  Dick  v.  Hamilton,  1  Deady,  322  :  N.  E.  Rep.  193. 

Fulton  v.  Woodman,  54  Miss.  158-173.  "Kay    v.    Teabout,   65   [owa,    157: 

3  See  Scheitlin   v.    Stone,   43  Barb.  Sec  £141. 

(N.  Y.)  637.  lsTucker  v.    Parks,   i    Col    62;    !><■ 

*  Fulton  v.  Woodman,  54  Miss.  172.  Votie  v.    McGerr,   15  Col.    161     Seel< 
'-  Fulton  v.  Woodman,  54  .Miss.  159  ;  man  \.  Boagland,  19  Col.  231,  34  Pac 

Hartshorn  v.  Fames,  31  Me.  98.  Rep.  996. 

6  See  §  6. 


302  AVOIDING    DENIAL.  §159 

The  lack  of  allegations  of  knowledge  or  notice  of  the 
fraudulent  design,  or  complicity  therewith,  or  participation 
therein  on  the  part  of  the  purchaser,  will  be  sufficient  to 
exclude  evidence  of  such  knowledge  or  conduct. 

§  159.  Avoiding  denial.  — The  general  rule  prevails,  under 
equity  procedure,  that  an  answer  under  oath,  so  far  as  it 
is  responsive,  is  to  be  taken  as  true  unless  overcome  by 
competent  proof.1  When  the  defendant,  by  his  answer 
under  oath,  has  expressly  negatived  the  allegations  of  the 
bill,  and  the  testimony  of  only  one  person  has  affirmed 
what  has  been  negatived,  the  court  will  not  decree  in 
favor  of  the  complainant."  There  is,  then,  oath  against 
oath.8  The  complainant  generally  calls  upon  the  defend- 
ant to  answer  on  oath,  and  is  therefore  bound  to  admit 
the  answer,  so  far  as  he  has  called  for  it,  to  he.  prima  facie 
true,  and  as  much  worthy  of  credit  as  the  testimony  of 
any  witness.  This  rule  does  not  extend,  however,  to 
averments  embodied  in  the  answer  not  directly  responsive 
to  the  allegations  contained  in  the  bill,  since  the  com- 
plainant has  not  called  for  such  averments.4  Allegations 
not  responsive  to  the  bill,  if  denied  by  a  general  repli- 
cation, must  be  proved  before  becoming  available  to  the 
party  making  them.5  In  Green  v.  Tanner,6  the  court 
said  :  "  That  the  answer,  being  responsive  to  the  bill,  is 
evidence  for  the  defendant  as  to  facts  within  their  own 
knowledge,  is  not  denied.  And  by  a  well-established  rule 
of  equity,  the  answer  must  be  taken  to  be  true,  unless 
contradicted  by  two  witnesses,    or  by  one  witness  with 


1  Wright  v.  Wheeler,  11   Iowa,  13:  S.  C.  Rep.  534,  the  court  says  :  "An 

Allen  v.  Mower,  17  Vt.  61 ;  Parkhurst  answer   under    oath    is  evidence    in 

v.  McGraw.  24  }!iss.  184.  favor  of  the  defendant,  because  made 

1  Birmingham  Nat.  Bank  v.  Steele,  in  obedience  to  the  demand  of  the 

98  Ala.  85,  12  So.  Rep.  i^  ;  Beene  v.  Kill    for   a   discovery,   and    therefore 

Randall,  23  Ala.   514.  only  so  far  as   it    is    responsive  t<,  the 

Jacks  s.  Nichols,  ■"">  X.  Y.  178.  bill." 

'Sen/   v.   Mitchell,    94    I',  s,  582.  ■  Humes  v.  Scruggs,  94  U.  S.  24. 

In  I  arley  v.  Kittson,  120  U.  S.  317,  7  6  8  Mete.  (Mass.)  122. 


§  159  AVOIDING    DENIAL 


303 


probable  and  corroborating-  circumstances."1  A  plea 
which  avoids  the  discovery  prayed  for  is  no  evidence  in 
the  defendant's  favor,  though  under  oath  and  negativing 
material  allegations  of  the  bill.2  In  Bowden  v.  Johnson, 
it  was  contended  by  counsel  that,  as  the  bill  prayed  that 
the  defendant  should  answer  its  allegations  on  oath,  the 
answer  was  evidence  in  his  favor,  and  was  to  be  taken  as 
true  unless  it  was  overcome  by  the  testimony  of  one  wit- 
ness, and  by  corroborating  circumstances  equivalent  to  the 
testimony  of  another  witness.  The  court  found  facts 
"sufficient  to  satisfy  the  rule  of  equity,"  and  cite  from 
Greenleaf,4  to  the  effect  'that  the  sufficient  evidence  to 
outweigh  the  force  of  an  answer  may  consist  of  one  wit- 
ness, with  additional  and  corroborative  circumstances, 
which  circumstances  may  sometimes  be  found  in  the 
answer  itself ;  or  it  may  consist  of  circumstances  alone, 
which,  in  the  absence  of  a  positive  witness,  may  be  suffi- 
cient to  outweigh  the  answer  even  of  a  defendant  who 
answers  on  his  own  knowledge." 5  It  seems  that  the 
credibility  of  the  defendants'  answers  setting  forth  con- 
sideration, will  be  destroyed  by  proof  that  the  vendee 
permitted  the  vendor  to  assert  in  his  hearing,  without 
contradicting  him,  that  no  indebtedness  existed.0 


1  Flagg  v.   Mann,    2   Sumner,   487.  the  circumstances,  must  be  taken  as 

See  Tompkins  v.  Nichols,  53  Aia.  198  ;  true.     Tobey    v.     Leonards,    2  Wall. 

Parkman  v.  Welsh,  19  Pick.  (Mass.)  430;  Seitz  v.  Mitchell,  94    O.  S.  582  ; 

234  ;  Hoboken  Bank  v.  Beckman,  33  Voorbees  v.  Bonesteel,  16  Wall.  30  ; 

N.  J.  Eq.  55  ;  Morse  v.  Hill,  136  Mass.  Collins  v.  Thompson,  22  I  [ow,  253." 

71.     In  Hill  v.  Ryan  Grocery  Co.,  78  '  Farley  v.  Kittson,  120   U.  s.  :UT, 

Fed.  Rep.  25,  the  court  says  :  "  With  7  S.  C.  Rep.  534  ;  Eeartl    v.   ( iorning, 

only   one    witness,    therefore,    whose  3  Paige  (N.  Y. )  566. 

testimony  was  scarcely  material,  sup-  :i  107  U.  S.  262,  2  s.  < '.  Rep.  '.'  16. 

plemented  by  the  written  instruments,  4  Greenleaf  on    Evidence,    vol.8,  £ 

which  upon  their  face  negative  the  289. 

case  made  by  the  bill,   the  complain-  6  s.  P.  Williamson    v.    Williams,    11 

ants  were  without  proofs  to  outweigh  Lea  (Tenn.)  365. 

or   impair  the  force  of  the  positive  6  Bradley  v.  Buford,  Sneed (Ky .)  12. 
denials  of  the  answers,  which,  under 


304  DISCOVERY     \\l>    RELIEF.  §§   1 60,   161 

§  160.  Answer  as  evidence  for  or  against  co  defendant.  — 
The  equity  practice  seems  to  be  settled  that,  generally 
speaking,  the  answer  of  one  defendant  cannot  be  used 
against  another  defendant.1  In  Salmon  v.  Smith,2  the 
rule  is  recognized  that  the  answer  of  one  defendant  to  a 
bill  in  chancery  which  shows  that  the  complainant  is  not 
entitled  to  the  relief  sought  inures  in  favor  of  his 
co-defendant  as  evidence:'  So  it  is  said  by  Mr.  Green- 
leaf,1  "that  where  the  answer  in  question  is  unfavorable 
to  the  plaintiff,  and  is  responsive  to  the  bill,  by  furnishing 
a  disclosure  of  the  facts  required,  it  may  be  read  as  evi- 
dence in  favor  of  a  co-defendant,  especially  where  the 
latter  defends  under  the  title  of  the  former."5  Where 
the  complainants  choose  to  rely  upon  admissions  or  con- 
fessions in  an  answer,  the  denials  and  admissions  must, 
of  course,  be  considered  as  a  whole.6  A  sworn  answer 
should  be  taken  as  true  unless  overcome  by  the  testi- 
mony,' but  the  denials  to  make  an  answer  evidence  must 
be  of  facts  stated  in  the  bill.8  It  may  be  here  recalled 
that  the  testimony  of  a  single  witness,  uncorroborated  by 
circumstances,  has  been  considered  not  sufficient  to  over- 
come a  verified  answer  positively  denying  fraud.9 

?i  161.  Pleading  to  the  discovery  and  the  relief.  —  Chan- 
cellor  Walworth  stated   in    Brownell   v.   Curtis,10  that,  in 


Salmon    v.  Smith,  58  Miss.   408;  261.     But  see  Camion  v.   Norton,  14 

Powles  v.    Dilley,  9  Gill.  (Md.)  222;  Vt.  178. 

McKim  v.  Thompson,  1   Bland   (Md.)  6  Crawford  v.  Kirksey,  50  Ala.  597. 

161.  'Hurd  v.  Ascherman,  117  111.  501, 

58Miss.  100,408;  BanoverNat.  Bk.  6N.  E.  Rep.  160.   See  United  Stafcesv. 

v.  Kl.in,  (M  .Miss.  151,  s  So.  Rep.  208.  Budd,  111  I'.  S.  Hi.-,,  v:  s.  ( '.  Rep.  575. 

liavis     v.    Clayton,     5     Humph.  3Gainerv.  Russ,  20  Fla.  162. 

(Tenn.)  1 16  »  See  Garrow   v.    Davis,     15   How. 

l3Greenl.  Ev.  g  283.  272;  Evans  v.   Bicknell,  6  Ves.  184; 

Mills  \.  Gore,  20  Pick.  (Mass.)  Lord   Cranstown  \.  Johnston,  3  Ves. 

Miles   v.    Miles,   32    X     II.   147;  170;     Pilling  v.    A.rmitage,    12    Ves. 

Powles   \     Dilley,  '.»  Gill.  (Md.)  222;  r8 ;    Thompson    v.    Sanders,  <!  .J.  .1. 

Field  v.  Holland,  6  Cranch  8  ;  Clason  Marsh  (Ky.)   93.     Compare   Allen   v. 

\.    Morris,    10    Johns.   (N.    Y.)   524;  Cole,  9  N.  J.  Eq.  286. 

Linganv.  Henderson,  i    Bland  (Md.)  1010  Paige  (N.  X".)  214. 


§  162  DENIAL  IN  ANSWER. 

certain  cases,  where  the  discover)'  asked  for  would  tend 
to  criminate  the  defendant,  or  subject  him  to  a  penalty  or 
forfeiture,  or  entail  a  breach  of  confidence,  the  defendant 
was  not  bound  to  make  a  discovery  to  aid  in  establishing 
the  facts,1  although  the  complainant  might  be  entitled  to 
relief.  In  the  course  of  the  opinion  it  was  further  said  : 
"But  where  the  same  principle  upon  which  the  demurrer 
to  the  discovery  of  the  truth  of  certain  charges  in  the 
complainant's  bill  is  attempted  to  be  sustained,  is  equally 
applicable  as  a  defense  to  the  relief  sought  by  the  bill, 
the  settled  rule  of  the  court  is  that  the  defendant  cannot 
be  permitted  to  demur  as  to  the  discovery  only,  and 
answer  as  to  the  relief.2  This  general  rule  is  equally 
applicable  to  the  case  of  a  plea ;  and  the  defendant  can- 
not plead  any  matters  in  bar  of  the  discovery  merely, 
when  the  matters  thus  pleaded  would  be  equally  valid  as 
a  defense  to  the  relief." 

§162.  Particularity  of  denial  in  answer.  —  Chancellor 
Kent,  in  Woods  v.  Morrell,3  in  discussing  the  sufficiency 
of  an  answer  to  the  allegations  of  a  bill  in  equity,  said  : 
"  The  general  rule  is,  that  to  so  much  of  the  bill  as  is 
material  and  necessary  for  the  defendant  to  answer,  he 
must  speak  directly,  without  evasion,  and  not  by  way  of 
negative  pregnant.  Fie  must  not  answer  the  charges 
merely  literally,  but  he  must  confess  or  traverse  the  sub- 
stance of  each  charge  positively,  and  with  certainty  ;  and 
particular  precise  charges  must  be  answered  particularly 
and  precisely,  and  not  in  a  general  manner,  even  though 
a  general  answer  may  amount  to  a  full  denial  of  the 
charges." i     This   rule    is  well   illustrated  in    Welcker  v. 

•Citing    Atty.-Gen.    v.    Brown,     1  129;  Story's    Eq.  Pleadings,  254   n.  1  ; 

Swanst.  294  ;  Dummer  v.  Corporation  Welf.  Eq.  Pleadings  133. 

of  Chippenham,  14  Ves.  245  ;  Hare  on  :;  1  Johns.  ( '!..  |  X    Y.  1 

Discovery,  5.     See  §  165.  'See    Eunter   v.    Bradford,    3   Fla. 

2  Citing  Morgan  v.  Harris,  2  Bro.  C.  285  :  Barrow  v.  Bailey,  5  Fla.  23. 
C.  124:  Waring  v.  Mackreth,  Forresl 
20 


3o6  BILL   OF    PARTICULARS.  §  162a 

Price,1  where  the  bill  charged  that  the  land  conveyed  by 
the  debtor  to  his  wife  was  "  all  the  property  of  which  the 
said  John  F.  was  possessed."  The  answer  set  forth  that 
the  debtor  ''was  then  in  good  circumstances,  with  means 
enough  and  more  than  enough  to  pay  all  his  debts." 
This  latter  statement  was  characterized  as  a  mere  legal 
conclusion  which  a  party  was  not  permitted  to  draw  for 
himself,  or  to  express  an  opinion  concerning,  without  dis- 
closing facts  to  justify  it,  and  as  being  a  mere  evasion  of 
the  real  issue  as  to  the  possession  of  other  property. 

It  is  a  familiar  rule  that  a  positive  denial  of  fraud  in  an 
answer  will  not  prevail  against  admissions,  in  the  same 
pleading,  of  facts  which  show  that  the  transaction  was 
fraudulent ; 2  also,  that  in  weighing  the  whole  evidence  in 
the  case,  the  fact  that  the  defendant  answers  only  gener- 
ally, denying  the  fraud,  will  operate  against  him  whenever 
the  bill  charges  him  with  particular  acts  of  fraud.3 
A  charge  in  a  bill  that  the  deed  in  question  was  never  prop- 
erly delivered,  and  that  the  grantor  retained  possession 
after  the  conveyance,  should,  if  untrue,  be  specifically 
denied.4 

§  162a.  Bill  of  particulars,  — The  granting  of  an  order 
for  a  bill  of  particulars  in  an  action  rests  largely  in  the 
sound  discretion  of  the  court.  In  actions  ex  delicto  a  bill 
of  particulars  is  only  allowed  by  grace.5  Such  orders 
have  been  granted  in  almost  every  form  of  action.0  In  a 
Special  Term  case  in  New  York,  prosecuted  to  set  aside 
an  assignment  as  having  been  made  in  fraud  of  creditors, 


1  2  Lea  (Term.)  667.  «  Hudgine  v.  Kemp,  20  Eow.  52. 

Robinson    v.    Stewart,    10  X.   Y.  5  Harding  v.  Bunnell,  14  Pa.  Co.  Ct. 

194 ;  Jackson  v.  Hart,  11   Wend.    (N.  Rep.  417. 

y.)  349,  per  Savage,  Ch.  J.     See  IH>-  'See  Dwight  v.  Germania  Life  Ins. 

boken  Bank  v.  Beckman,  33  X.  J.  Eq.  Co.,  84  X.  V.  493;  Tilton  v.  Beecher, 

53;    Sayre    v.    Fredericks,    Hi    X.    .].  59   X.    Y.    176 ;    Byrnes   v.    Lewis,    88 

Eq.  205.  II X.    Y.i,   310,   31    N.    Y.    Supp. 

•Parkman     v.     Welch,     19     Pick.  1028 ;  Townsend  v.  Williams,  117  N. 

Ma        J34.  C.  336,  23  S.  E.  Rep.  nil. 


§  1 62a 


MIL l.   <  »F    PARTICULARS. 


Lawrence,  J.,  ordered  the  plaintiff  to  furnish  certain  pre- 
ferred creditors  with  a  bill  of  particulars  of  the  times, 
places,  acts,  and  things  which  it  was  intended  to  prove, 
as  showing  the  fraudulent  intent.1  A  similar  application 
was  denied  in  a  later  case  upon  slightly  dissimilar  facts.3 
It  would  be  destructive  to  creditors'  proceedings  in  many 
cases  to  allow  a  debtor  to  exact  in  advance  a  bill  of  par- 
ticulars of  the  specific  acts  of  fraud  relied  upon  to  support 
the  action.  Fraud  is  generally  established  by  developing 
a  series  of  minute  circumstances,  earmarks,  and  indicia. 
These  sometimes  appear  at  the  trial  for  the  first  time 
when  the  creditor  has  obtained  an  opportunity  to  explore 
the  enemy's  country  by  cross-examination  it  may  be.  As 
the  presumption  of  good  faith  in  all  transactions  rests 
with  the  defendant,  and  the  general  character  of  the 
plaintiff's  cause  of  action  must  be  outlined  in  the  plead- 
ing, it  would  seem  to  be  most  unjust  to  require,  in  addi- 
tion, a  statement  of  the  items  of  the  creditors'  evidence 
in  advance  of  the  trial.      Creditors  are  considered  to  be 


1  Claflin  v.  Smith,  13  Abb.  N.  C. 
(N.  Y.)  205.  See  Byrnes  v.  Lewis,  83 
Hun  (N.  Y.),  310,  31  N.  Y.  Supp. 
1028 ;  Gilhooly  v.  American  Surety 
Co..  87  Hun  (N.  Y.)  395,  34  N.  Y. 
Supp.  347. 

2  Passavant  v.  Cantor,  21  Abb  N. 
C  (N.  Y.)  259,  1  N.  Y.  Supp.  574, 
48  Hun  (N.  Y.)  546;  Faxon  v.  Ball,  50 
N.  Y.  St.  Reporter,  495,  21  N.  Y.  Supp. 
737.  Compare  Isaac  v.  Wilisch,  69 
Hun  (N.  Y.)  341,  23  N.  Y.  Supp.  589 ; 
Constable  v.  Hardenbergh,  76  Hun 
(N.  Y.),  436,  27  N.  Y.  Supp.  1023; 
Passavant  v.  Sickle,  14  Civ.  Pro.  (N. 
Y.)  57  ;  Riggs  v.  Buckley,  2  App.  Div. 
(N.  Y.)  618,  37  N.  Y.  Supp.  1095.  In 
Gilhooly  v.  American  Surety  Co.,  87 
Hun  (N.  Y.),  397,  an  assignee  sued  for 
personal  property.  The  answer  de- 
nied that  the  assignor  had  assigned 
all  his  property,  and  alleged  that  the 


assignment  was  fraudulent.  The 
court  said  :  "  We  think  the  defendant 
should  state  whether  it  claims  the 
assignment  to  be  void  on  accounl  oi 
fraudulent  preferences,  in  which  case 

it    Should    State  What     preferences   are 

claimed  to  be  fraudulenl  ;  or,  if  the 
alleged  fraud  consists  in  the  failure 
of  the  assignor  to  transfer  all  his  as- 
sets to  the  plaintiff,  in  that  event  the 
defend  an!  should  particularize  what 
property,  if  any,  il  expects  or  intends 
to  prove  on  the  trial  was  withheld  i'.\ 

the  assignor  from  the  assigi and, 

if  on  both  -rounds,  then  all  the  par- 
ticulars above  specified  should  be 
given."  In  Harding  v.  Bunnell,  11 
Pa.  Co.  Ct.  Rep.  419,  the  courl  says  : 
■  We  think  the  plaintiff  Bhould  state 
what  property  was  fraudulently  in- 
cumbered  and  in  whal  waj ." 


308    DENYING  FRAUD  —  ADMISSION  AND  AVOIDANCE.    §§163,164 

a  favored  class,  and  are  entitled,  with  proper  restrictions, 
to  "  fish  "  through  the  debtor's  transactions  in  pursuit  of 
hidden  assets,  and  should  not  be  fettered  by  any  restrict- 
ing orders.  An  application  for  a  bill  of  particulars  is 
addressed  to  the  sound  discretion  of  the  court,  and,  of 
course,  will  be  denied  where  the  moving  party  may  fairly 
be  presumed  to  possess  the  information.1 

§  163.  Denying  fraud  or  notice. —  In  order  to  entitle  a 
party  to  protection  as  a  purchaser  without  notice  he  must 
deny  notice  of  the  fraud  fully  and  particularly,  whether  the 
defense  be  set  up  by  plea  or  answer,2  and  even  though 
notice  is  not  charged  in  the  bill.3  A  plea  of  bona  fide  pur- 
chaser for  value  and  without  notice  must  be  as  full  under 
the  Code  as  under  the  former  system  of  equity  pleading.4 
We  may  here  observe  that  constructive  fraud  is  not 
regarded  as  a  fact,  but  is  treated  rather  as  a  conclusion  of 
law  drawn  from  ascertained  facts.  Hence,  as  has  been 
shown,5  where  an  answer  denies  the  fraud,  but  neverthe- 
less admits  facts  from  which  the  existence  of  fraud  follows, 
as  a  natural  and  legal  if  not  a  necessary  and  unavoidable 
conclusion,  the  denial  will  not  avail  to  disprove  it.6 

£  164.  Admission  and  avoidance.  —  It  is  an  established 
rule  of  evidence  in  equity  that,  where  an  answer  filed  in 
a  cause  admits  a  fact,  and  insists  upon  a  distinct  fact  by 
way  of  avoidance,  the  fact  admitted  is  established,  but  the 
fact  insisted  upon  must  be  proved;  otherwise  the  admis- 
sion stands  as  if  the  fact  in  avoidance  had  not  been 
averred.7 

:  Kink  v.  Jetter.38  Bun(N.  Y.iir,:;.  1  Weber   v.  Rothchild,   15  Ore.  388. 

itanton   v.  Green,    34    Miss.   592;  B  See  §  162. 

Gallatin  v.  Cunningham,  8  <  low.  (N.  Sayre  v.  Fredericks,  16  N.  J.  Eq. 

J  Lea.  Cas   in  Eq.  pp.  85, 86  ;  209;    Cunningham    v.    Freeborn,    11 

Miller  v.  Fraley.21  Ark.  22.  Compare  Wend.  (N.  V.)  253. 

Friedenwald    v.    Mullan,     in   Beisk.         *  Clements  v.   M -e,   6  Wall.  315  : 

Tenn  |  .  Presley's    Evidence,    |>.    K5  ;    Han    v. 

'Manhattan     Co.    v.    Evertson,    (i  Ten  Eyck,  2  Johns.  Ch.  (N.  Y.)  62 ; 

Paige  (N.  Y.)  466.  Clarke   v.    While,    12    Pet.    190.    See 


§§  165,  l66     AVOIDING  l)lM'n\  ERV  —  AFFIRMATIV]    RELIEF. 

§165.  Avoiding  discovery.  —  An  important  question  is 
frequently  presented  as  to  whether  or  not  a  defendant  can 
defeat  a  discovery  by  pleading  that  the  disclosure  may 
subject  him  to  a  criminal  prosecution.  Such  a  plea  lias 
been  held  not  sufficient  to  excuse  a  discovery,1  while  in 
many  cases  it  is  regarded  as  sufficient  to  excuse  the  party 
from  answering."  This  same  question  comes  up  in  vari- 
ous forms  in  civil  procedure,  and  at  least  in  the  United 
States,  the  general  rule  and  practice  is  that  a  party  may 
omit  to  verify  a  pleading,  or  decline  to  make  a  disclosure 
which  will  tend  to  degrade  or  criminate  him. 

§  166.  Affirmative  relief.  —  No  affirmative  relief  can  ordi- 
narily be  accorded  to  the  defendant  unless  it  is  claimed 
by  cross  petition,  or  as  an  affirmative  defense  ;  yet  where 
such  relief  has  been  granted  without  objection  in  the 
court  below,  the  decree  will  not  always,  for  that  reason, 
be  reversed  on  appeal.3  It  may  be  here  observed  that 
jnder  the  practice  in  Alabama  the  fact  that  the  debtor  has 
other  property  which  might  be  subjected  to  the  payment 
of  the  judgment,  is  not  available  to  a  voluntary  alienee 
unless  presented  by  cross  bill.4  The  homestead  may  1"' 
protected  by  cross  bill.5  As  elsewhere  shown,  the  vendee, 
when  deprived  of  the  property,  may  obtain  reimburse- 
ment for  the  amount  actually  advanced  if  no  intentional 
wron£  is  shown.  It  is  intimated  in  McLean  v.  Letch- 
ford/''  that    the    court   would    not   consider  his  claim   to 


Ringgold   v.    Ringgold,    1    H.    &  G.  »  Kellogg  v.  Aherin,  4S  Iowa.   299. 

(Md.)  11,  18  Amer.  Dec.  250.  4  Leonard  v.    Forcheimer,    49    Ala. 

1  Devoll  v.  Brownell,  5  Pick.  (Mass.)  145. 

448;  Bunn  v.  Bunn,  3  New  Rep.  679.  5  Thomason  v.  Neeley,  50  Miss.  313. 

See    Wich   v.  Parker,   22    Beav.    59.  Where    a    homestead    exemption    ia 

Compare  Reg.  v.  Smith,  6  Cox  C.  C.  relied    on,    it    must    be    specifically 

31.     See  g  161.  pleaded.     Graham  v.  Culver,  3  Wyo. 

2  Michael  v.  Gay,  1  Fost.  &  Fin.  409;  639,  29  Par.  Rep.  270  ;  30  W 
Bay  State  Iron  Co.  v.  Goodall,  39  N.  6  60  Miss.  182. 

H.  237 ;    Horstman   v.    Kaufman,  97 
Pa.  St.  147. 


3IO  WAIVER  OF  VERIFICATION.  §  l67 

reimbursement  in  the  absence  of  a  cross  bill,  though  it  is 
conceded  that  reimbursement  has  been  made,  in  a  proper 
case,  where  no  cross  bill  had  been  filed.1 

§  167.  Waiver  of  verification.  —  The  pleadings  in  the  class 
of  litigation  under  discussion  are  usually  verified.  Where 
code  practice  prevails,  if  a  verified  bill  of  complaint  is 
filed,  all  subsequent  pleadings  must  be  under  oath  except 
demurrers,  which,  of  course,  only  raise  questions  of  law. 
Though  the  complainant  waive  an  answer  under  oath 
from  the  defendant,  yet  the  latter  may  nevertheless  verify 
the  pleading.  So  held  in  Clements  v.  Moore.2  Swayne, 
J.,  said  :  "  It  was  her  right  so  to  answer,  and  the  complain- 
ants could  not  deprive  her  of  it.  Such  is  the  settled  rule 
of  equity  practice,  where  there  is  no  regulation  to  the 
contrary."  It  is  said  that  the  practice  of  waiving  an 
answer  under  oath  originated  in  the  State  of  New  York, 
by  virtue  of  a  provision  incorporated  in  the  statute,3  at 
the  suesfestion  of  Chancellor  Walworth,  and  was  intended 
to  introduce  a  new  principle  into  the  system  of  equity 
pleading.  It  was  designed  to  leave  it  optional  with  the 
complainant  to  compel  a  discovery  in  aid  of  the  suit,  or 
to  waive  the  oath  of  the  defendant  if  the  complainant  was 
unwilling  to  rely  upon  his  honesty,  and  chose  to  estab- 
lish his  claim  by  other  evidence.4 


■Compare    Dunn   v.   Chambers,  4  ant,  though  under  oath,  except  such 

Hark  (X.  Y.)381 ;  Grant  v.  Lloyd,  20  part  thereof  as  shall  be  directly  respon- 

Miss.    L92  ;    Alley  v.  Connell,  3  Head  sive  to  such  interrogatories,  shall  not 

(Tenn.)  578.     See?;  51.  be  evidence  in  his  favor,  unless  the 

■  1;    Wall.    314.      The  41st  Rule    in  cause  be  set  down  for  hearing  on  bill 

Equitj    of    the   Supreme    Court    now  and  answer  only,"  etc. 

provides  :     "  [f  the  complainant  in  ■'  N.  Y.  R.  S.,  p.  175,  §  44. 

his  bill   shall  waive  an  answer  under  4  See   Armstrong  v.  Scott,  3  Greene 

oath,  or  shall  only  require  an  answer  (la.)  433;  Burras  v.  Looker,  4  Paige 

with  regard  to  certain  specified  inter-  (N.  Y.  ~22~. 
rogatories,  the  answer  of  the  defend- 


CHAPTER  XI. 


OF  THE  JUDGMENT  OR  DECREE. 


§  168.  The  judgment  conclusive. 
1G9.  Judgment  res  adjudicat a  though 
the    form    of    procedure    be 
changed. 

170.  Judgment  appointing  receiver. 
170a.  Enforcing  judgment  at  law. 

171.  Judgment  avoids  sale  only  as  to 

creditor  —  not  absolutely. 

172.  Judgment  transferring  title. 

173.  No  judgment  in  favor  of  unrep- 

resented parties. 
173a.  Creditor  suing  in  place  of  as- 
signee. 

174.  Confession  of  judgment. 


^  175.  Impounding  proceeds  of  a  fraud- 
ulent sale. 
170.  Accounting  by  fraudulenl  ven- 
dee to  debtor  or  creditor. 

177.  )  Personal     judgment     againsl 

178.  j      fraudulenl  vendee. 

IT'.i.  Monej    judgment,  when   <li^al 

lowed. 
ISO.  Personal  judgment  against  wife. 

181.  Judgment  must  conform  to  re- 

lief demanded. 

182.  Must  accord  with  complaint. 

183.  Contradictory  verdicts.. 
183a.   New  trial. 


§  168.  The  judgment  conclusive.— The  form  of  the  judg- 
ment or  decree  in  suits  to  annul  fraudulent  transfers,  or  to 
reach  equitable  assets,  and  the  rights  secured  by  the  adju- 
dication, constitute  important  branches  of  our  subject 
from  a  practical  standpoint.  The  usual  attributes  attach 
to  the  judgment  in  this  class  of  cases.  The  recovery  of 
a  judgment  is  regarded  as  an  estoppel  upon  the  parties 
as  to  the  subject-matter  investigated.1  But  the  estoppel 
has  no  wider  effect.  Raymond  v.  Richmond-  is  an  illus- 
tration of  our  meaning.  There  the  action  was  instituted 
by  an  assignee  against  a  sheriff  and  an  execution  cred- 
itor, for  levying  upon  property  which  had  theretofore 
been  adjudged  to  belong  to  the  assignee,  in  an  action  to 

■See  In  re  Hussman,    2   N.  B.  R.  *  78  N.    V.    351  ;  second   appeal,  88 

441;  Downer  v.   Rowell,  25  Vt.  336;  N.  Y.  671  ;  Brooks  v.  Wilson,    125  N. 

Raymond  v.  Richmond,  78  N.  Y.  351  :  V.  256,  26  X.    E.  Rep.  258  ,  Eumes  v. 

Bell  v.   Merrifield,   109  N.  Y.  211,  10  Scruggs,  94  U.  S.  22. 
N.   E.  Rep.  55  ;  Hymes  v.  Estey,  116 
N.  Y.  509,  22  N.  E.  Rep.  1087. 


312  JUDGMENT    RES  ADJUDICATA.  §  ^9 

which  the  assignee,  the  assignor  and  the  execution 
defendant  were  parties.  The  court  very  properly  held 
that,  as  the  creditor  under  whose  judgment  and  execution 
the  seizure  had  been  effected,  was  not  a  party  to  the  prior 
litigation,  the  adjudication  did  not  conclude  him.  Hence 
such  creditor  was  entitled  to  show  that  the  transfer  made 
by  the  execution  defendant,  although  the  title  had  been 
adjudged  to  be  in  the  assignee,  was  fraudulent  in  fact, 
and  the  seizure  of  the  property  by  the  creditor  therefore 
justifiable.  Manifestly  a  purchaser  of  a  chattel  mort- 
gage is  not  concluded  by  a  subsequent  adjudication  in  an 
action  against  the  mortgagor  and  mortgagee  to  which  he 
was  not  a  party,  declaring  the  mortgage  to  be  fraudu- 
lent.1 And  a  decree  between  husband  and  wife,  estab- 
lishing in  the  wife's  favor  a  resulting  trust  in  the 
husband's  lands,  is  not  conclusive  upon  the  husband's 
existing  creditors.2  Nor  is  a  judgment  obtained  on  an 
attachment  even  prima  facie  evidence  against  a  person 
who  claims  to  be  a  bona  fide  purchaser  for  value  of  the 
property  attached.3 

Where  fraud  is  essential  to  a  cause  of  action  it  must  be 
found  as  stated.4 

If  a  court  of  equity  has  jurisdiction  and  entertains  the 
case  it  will  ordinarily  retain  the  case  till  the  whole  subject 
is  disposed  of.5 

§  169.  Judgment  res  adjudicata  though  the  form  of  pro- 
cedure be  changed.  —Where  creditors  seek  by  bill  in  equity 
to  subject  a  vested  estate  in    remainder  to  their  claims, 

'Zoeller  v.    Riley,   100  N.  Y.  102,  2  4  Brunei-  v.  Brown,  139  Intl.  610,38 

N .  E.  Rep-  388.  N.   E.   Rep.   318  ;  Fletcher  v.  Martin, 

-Old  Folks'   Society   v.  Millard,  86  126  Ind.  55,  25  N.  E.  Rep.  886. 
Tenn.  657  ;  Humes  v.  Scruggs,  94  U.  5  Ostranderv.  Weber,  114  N.  Y.  102, 
S.  22;  Branch   Bank  of  Montgomery  21  N.  E.  Rep.  112;  Taylor  v.  Taylor, 
v.Hodges,   12  Ala.  118.  43    N.    Y.  578,   584;    Ludlow  v.  Si- 
nn \.  Smith,  68  .Miss,  773,   10  So.  mond,  2  Cai.  Cas.  (N.  ST.)  55. 
Rep.  70.    See  also  Goodwin  v.  Snyder, 
75  Wis.  450,  II  X.  W.  Rep.  746. 


§  I/O  JUDGMENT   APPOINTING    REi  l  [VER. 

and  the  courts  decide  against  them,  the  question  will  be 
res  adjudicata  if  the  creditors  afterward  try  to  levy  by 
execution  on  the  same  interest,  when  it  has  become  an 
estate  in  possession  by  the  death  of  the  life  tenant.1 

§  170.  Judgment  appointing  receiver.  —  The  particular 
form  of  a  decree  in  a  creditor's  action  to  cancel  a  fraudu- 
lent conveyance  is,  in  some  instances,  of  vital  importance 
to  the  complainant.  A  court  of  equity  undoubtedly  pos- 
sesses the  power  to  pronounce  a  judgment  annulling  and 
clearing  away  the  fraudulent  obstruction,  and  then,  1>\ 
acting  upon  the  person  of  the  debtor,  to  compel  him  to 
convey  the  title  to  a  receiver.5-'  It  is  considered  irregular 
to  appoint  a  referee  in  the  judgment ;  there  should  be  a 
receiver  and  a  direction  that  the  defendant  convey  to 
him.3  The  practitioner  should  be  cautious  about  enter- 
ing up  judgment,  as  the  title  which  the  receiver  or  a 
purchaser  from  him  acquires  rests  upon  the  debtor's  own 
conveyance,  and  has  no  relation  to  the  original  judg- 
ment which  is  the  foundation  of  the  bill  in  equity.  It  has 
been  intimated  that  when  the  creditor  pursues  this  course 
he  abandons  the  lien  of  his  judgment  and  seeks  satisfac- 
tion of  his  debt  out  of  the  debtor's  property  generally. 
In    Chautauque   County    Bank  v.    Risley,1    the  creditor's 


1  Nichols  v.  Levy,  5  Wall.  438.  1030,  the  court  said  :  "On  a  hill  filed 

■  Chautauque  County  Bank  v.   Ris-  to  reach   real   property   fraudulently 

ley,  19  N.  Y.  374  ;  Cole  v.  Tyler,  65N.  transferred  by  the  debtor,  the  claims 

Y.  77.     Compare  McLean  v.  Cary,  8S  of  several  creditors  are  satisfied  in  the 

N.  Y.  391  ;  White's  Bank  of  Buffalo  order  of   the   priority   of   the    judg- 

v.  Farthing,   9  Civ.  Pro.  (N.  Y.)  66,  ment."    In  Wilkinson  v.  Paddoci 

101    N.    Y.    344,   4  N.    E.    Rep.    734;  Hun  (X.  Y.)  197,  affi'd,  125  N.  V.  748, 

New  York  Life  Ins.  Co.  v.  Mayer,  19  the  court  says  :   "  The  doctrine  of   the 

Abb.   N.  C.  (N.  Y.)  92;  Union  Nat.  authorities  seems  to  be  t"  tl"-  effect 

Bk.    v.    Warner,    12    Hun     (N.   Y.)  that,    as    to    real   estate,   judgment- 

306.  creditors  acquire  liens  thereon  in  the 

3  Union    Nat.   Bk.    v.    Warner,    12  order  in  which  their  judgments 
Hun  (N.  Y.)  306.  docketed,   and   that    their   priori! 

4  19    N.     Y.    374.      In    Brown    v.  not   affected  by  -^uits  brought   to  sel 
Chubb,  135  N.  Y.  180,  31   N.  E.  Rep.  aside  a    fraudulent  transfer  of  such 


514  ENFORCING   JUDGMENT   AT    LAW.  §  I/Oa 

action  was  founded  upon  the  first  judgment  recovered 
against  the  debtor,  and  the  property  was,  under  the  order 
of  the  court,  conveyed  by  the  debtor  to  a  receiver.  It 
was  decided  that  another  creditor,  whose  judgment  was 
subsequent  to  that  which  was  the  foundation  of  the 
creditor's  bill,  but  which  was  entered  prior  to  the  time  the 
bill  was  filed,  might  sell  the  real  estate  on  execution,  and 
the  purchaser  at  such  sale  would  acquire  a  better  title 
than  the  grantee  from  the  receiver.  The  creditor  should 
therefore  be  careful  not  to  sacrifice  the  advantage  which 
the  prior  judgment  gives  him,  and,  having  cleared  the 
fraudulent  conveyance  out  of  the  way,  should,  especially 
if  subsequent  judgments  have  been  entered,  proceed  by 
execution  and  sale  on  his  first  judgment.1  In  Cole  v. 
Tyler,2  the  judgment  set  aside  the  conveyance  and  merely 
directed  that  the  receiver  should  sell,  execute  deeds,  etc. 
It  is  not  easy  to  discover  the  theory  upon  which  the 
receiver  could  be  said  to  have  acquired  the  title.  The 
improper  form  of  the  judgment  was  assigned  as  a  ground 
for  its  reversal,  but  the  court  said  that  if  the  direction  to 
sell,  etc.,  was  erroneous,  the  error  would  not  be  rectified 
by  an  appeal,  but  the  correct  procedure  was  by  motion  to 
correct  the  judgment,  the  matter  being  one  merely  of 
detail,  and  not  affecting  the  decision  upon  its  merits. 

§  170a.  Enforcing  judgment  at  law.  —  The  position  was 
urged  by  counsel  in  Smith  v.  Reid,3  that,  though  the 
creditor's  judgment  and  execution  were  regular,  yet  the 
real   estate   in   controversy  could   not   be  sold  until   the 


real  estate.    (White's  Hank  v.  Farth-  Rep.  734;  Sband  v.  Eanley,  71  N.  Y. 

Lng,  101  N.  Y.  346,347  ;  Underwood  v.  319;  Union  Nat.  Bank  v.  Warner,  12 

Sutcliffe,  77  N.  Y.  62  ;  N.  Y.  Life  Ins.  Hun  (N.  Y.)  309;  Cole  v.  Tyler,  Go  N. 

Co  x.  Mayer,  19  AM..  N.C.(N.  5T.)92  ;  Y.  73. 

s.  c.  L2  N.  Y.  Stat.-  Rep.  119  ;  O'Brien  *  G5  N.  Y.  77. 

v   Browning, 49 How.  Pr.(N.Y.)113)."  3 134  N.  Y.  568,  577,   31  N.  E.  Rep. 

1  Compare  White's  Bank  of  Buffalo  1082. 
v.  Farthing,    10]    N.   Y.  344,  4  N.  E. 


§  i7i 


JUDGMENT    AVOIDS   SALE. 


15 


alleged  conveyance  of  it  had  been  set  aside  1»\  a  valid 
judgment  decreeing  such  conveyance  to  be  fraudulent. 
Brown,  J.,  said:  "A  judgment-creditor  cannot  be 
deprived  of  his  legal  right  to  enforce  collection  of  his 
judgment  against  the  lands  of  his  debtor  by  a  fraudulent 
conveyance  thereof  prior  to  the  entry  of  the  judgment, 
nor  can  he  by  such  a  conveyance  be  forced  to  pursue  an 
equitable  remedy  for  the  collection  of  his  debt,  instead  of 
a  legal  one,  and  the  whole  current  of  authority  in  this 
State  is  to  the  effect  that  notwithstanding  the  fraudulent 
conveyance,  the  judgment-creditor  may  sell  the  land 
under  execution  upon  his  judgment,  and  the  purchaser 
may  impeach  the  conveyance  of  the  land  in  a  suit  at  law 
to  recover  possession,  or  if  he  can  gain  possession  defend 
the  title  thus  acquired  against  the  fraudulent  grantee  or 
those  claiming  under  him."  ] 

The  jurisdiction  over  equitable  interests  at  law  is  being 
extended.3 


§  171.  Judgment  avoids  sale  only  as  to  creditor  — not  abso- 
lutely.—The  principle  must  always  be  kept  in  view  that 


1  See  Chautauque  County  Bank  v. 
Risley,  19  N.  Y.  369  ;  Bergen  v.  Car- 
man, 79  N.  Y.  153;  Smith  v.  Reid,  11 
N.  Y.  Supp.  739,  19  Civ.  Pro.  (N.  Y.) 
363.  Compare,  however,  Lamont  v. 
Cheshire,  65  N.  Y.  30;  Porter  v. 
Pico,  55  Cal.  165,  175;  Bergen  v. 
Snedeker,  8  Ahb.  N.  C.  (N.  Y.)  50-58  ; 
Bockes  v.  Lansing,  74  N.  Y.  437 ; 
Erickson  v.  Quinn,  15  Abb.  Pr.  N. 
S.  (N.  Y.)  168.  Tbe  rule  as  to  lis 
pendens  must  be  observed  in  this  con- 
nection. In  Hovey  v.  Elliott,  118 
N.  Y.  138,  23  N  E.  Rep.  475,  the  court 
says:  "  The  theory  of  the  doctrine  of 
lis  pendens  is  to  preserve  the  situation, 
as  it  is  when  the  original  litigation 
is  commenced,  until  its  termination, 
that  the  successful  party  may  then 
take  the  fruits  of  it  without  interrup- 


tion from  another,  who  may  have, 
during  its  pendency,  sought  to  obtain 
some  right  to  the  property  in  contro- 
versy. Tilton  v.  Cofield,  93  0.  S. 
163;  Lamont  v.  Cheshire,  <'>•"»  X.  Y. 
36,  and  cases  there  cited."  An  active 
creditor  must  inform  himself  con- 
cerning the  exact  status  of  pending 
controversies  affecting  the  propertj 
which  he  has  pursued,  lest  subse- 
quent adjudications  may  relate  hack 
and  undermine  the  apparenl  title  or 
right  which  he  has  gained. 

■  Anderson  v.  Briscoe,  12  Bush. 
(Ky.)  oil  :  Kennedy  v.  Nunan,  52<  !al. 
326'  ;  LeRoy  v.  Dunkerly,  51  <  al.  152  ; 
Johnson  v.  Conn.  Bank,  21  <  !onn,  1  Is  : 
Eutchins  v.  Heywood,  50  N.  II.  591  ; 
Carleton  v.  Banks,  7  Ala.  82. 


l6  JUDGMENT   avoids   SALE.  §171 


a  fraudulent  sale  is  good  between  the  parties.  Giving 
effect  to  this  doctrine  generally  controls  the  form  of  the 
judgment  in  a  creditor's  action.  Thus  in  Orr  v.  Gil- 
more,1  the  conveyance  was  found  to  be  voidable  as 
against  the  creditor,  but  the  court  decided  that  the  only 
judgment  to  which  the  complainant  was  entitled  was  a 
decree  for  the  sale  of  the  lot  in  suit  and  the  payment  of 
the  amount  of  the  claim  with  interest  and  costs.  The 
sale  being  valid  between  the  debtor  and  the  fraudulent 
vendee,  there  was  nothing  to  warrant  a  judgment  declar- 
ing it  null  and  void  as  to  every  one.  In  the  case  cited 
the  judgment  which  was  held  by  the  higher  court  to  be 
erroneous  declared  that  the  property  belonged  to  the 
debtor.  This  was  manifestly  wrong,  for,  where  it  does 
not  appear  that  there  are  other  creditors,  the  judgment, 
whether  it  directs  a  sale  on  execution  by  the  sheriff,-  or 
by  a  receiver,3  should  only  declare  the  conveyance  void 
as  to  the  plaintiff's  judgment,  and  direct  a  sale  for  the 
payment  of  that  alone.  The  grantee  is  entitled  to  all 
that  might  remain  of  the  proceeds  in  the  shape  of  sur- 
plus,4 and,  when  the  creditor  is  paid,  the  decree  can- 
celling the  conveyance  is  satisfied.5  "  The  action  of 
chancery,"  said  Nelson,  J.,  "upon  the  fraudulent  grantor 
or  assignee,  is  only  to  the  extent  of  supplying  a  remedy 
to  the  suitor  creditor ;  as  to  all  other  parties,  the  assign- 
ment remains  as  if  no  proceedings  had  been  taken." 
Under  the  Civil  Code  in  Louisiana  if  the  action  is  suc- 
cessful the  judgment  is  that  the  conveyance  be  avoided 


1  T   Lans.   (N.   Y.)  345;    Duncan  v.  '  Van  Wyck  v.  Baker,  10  Hun  (N. 

Custard,  '.'1  W.  Va.  731  ;  Kennedy  v.  Y.)  40;  Colhnson  v.  Jackson,  B  Saw- 

Barandon,  67  Barb.  (N.  Y.)  209.  yer,  365  ;  In  re  Estes,  <>  Sawyer.  460. 

Orr  v.  Gilmore,   T   Lans.  (N.    S\)  Rawson    v.   Fox,  65  111.  202.     See 

345;  Kennedy  v.  Barandon,  6?  Barb.  Bostwick    v.    Menck,   40   N.    Y.  383; 

X.  Y)  309;  Belgard  v.  McLaughlin,  Kerr  v.  Hutchins,  46  Tex.  384. 

t4Hun(N.Y.)557,  9N.Y.  St.  Rep.  38.  '  McCalmont    v.     Lawrence,    1 

Chautauque  Co.   Hank  v.  Bisley,  Blatchf.  235. 
19  X.  Y  869. 


§  1/2  H   DGME1S  I    Tl;  VNSFERRING     I  II  I  I  .  317 

as  to  its  effect  on  the  complaining  creditors.1  Nor  is 
the  judgment-creditor  entitled  to  get  satisfaction  out  of 
anything  but  the  actual  interest  of  his  debtor  in  the  prop- 
erty conveyed;  if  he  is  a  junior  judgment-debtor,  the 
fact  that  his  judgment  is  used  as  a  means  of  attack  gives 
him  no  priority  over  senior  judgments." 

§  172.  Judgment  transferring  title. — The  court  has  no 
power  to  effect  a  transfer  of  title  to  land  by  ordering  a  sale 
of  it,  except  in  special  cases  authorized  by  statute,  such 
as  mortgage  and  partition  sales,  sales  of  infants'  lands, 
ordinary  execution  sales,  and  the  like.  In  suits  brought 
to  reach  lands  conveyed  with  intent  to  defraud  creditors, 
the  proper  decree,  in  New  York  at  least,  is  to  set  aside 
the  fraudulent  conveyance,  and  permit  the  creditor  to 
issue  an  execution  and  sell  under  it,  or  compel  the  debtor 
to  convey  to  a  receiver  and  direct  the  latter  to  sell.  It 
was  said  by  Gilbert,  J.,  in  Van  Wyck  v.  Baker,3  that  "  the 
fraudulent  deed  being  annulled,  the  title  remains  in  the 
debtor,  and  can  be  passed  only  by  her  deed."  4  If  how- 
ever, the  receiver  is  directed  to  sell  without  obtaining  a 
prior  conveyance  from  the  debtor,  the  erroneous  judgment 
is  not,  as  we  have  seen,5  to  be  rectified  by  an  appeal  from 
the  judgment,  but  a  motion  should  be  made  to  correct 
it.'3  Where  an  execution  purchaser  seeks  to  cancel  a  cloud 
on  his  title,  of  course  no  conveyance  is  requisite,  as  the 
plaintiff  will  be  left  in  the  full  enjoyment  of  the  title 
acquired  by  the  sheriff's  deed.7 


1  Claflin  v.  Lisso,  27  Fed.  Rep.  420.  Paige  (N.   Y.)  404  ;    I  lhautauque   (  •> 

-'Henderson     v.     Henderson,      133  Bk.    v.  Whit.',    6    N.    Y.    236 ;  Chau- 

Penn.    St.     399.    19    Atl.    Rep.   424;  tauque  Co.    Bk.  v.  Risley,    19    V    V. 

White's  Bank  v.  Faithing,  101  N.  Y.  369.     See  Dawley  v.  Brown,  65  Barb. 

346,  4  N.  E.  Rep.  734;  Wilkinson  v.  (N.  Y.)  107. 

Paddock,  57  Hun  (N.  Y.)  191,   11   N.  See  :  L70. 

Y.  Supp.  442,  affi'd  125  X.  Y.  748,  27  "Cole  v.  Tyler,  65  N    5 

N.  E.  Rep.  407.  :  Hager  \.  Schindler,  29  <  !al.  69.     li 

3  10  Hun  (N.  Y.)  40.  is  sai'l    in   Auks   v.   Gilmore,  59   Mo. 

4  Citing    Jackson    v.    Edwards,    7  541,  that  courts  of  chancery    may,  in 


5  I  S      UNREPRESENTED  PARTIES— CREDITOR  SUING.     §§  1/3,  173a 

£  173.  No  judgment  in  favor  of  unrepresented  parties.  —  In 
a  case  before  the  Supreme  Court  of  California1  it  was 
said  to  be  an  anomaly  in  practice  to  render  judgment  in 
favor  of  a  party  who  was  not  before  the  court,  and  was 
not  represented  in  any  manner  in  the  action.  This  obser- 
vation was  made  in  an  action  brought  by  a  creditor  against 
a  fraudulent  grantee  to  set  aside  a  conveyance  made  by  a 
deceased  debtor,  the  ground  of  relief  assigned  being  that 
the  conveyance  was  made  to  hinder  and  delay  creditors. 
The  representative  of  the  deceased  debtor  was  not  a  party. 
The  court  very  properly  decided  that  it  was  error  to  ren- 
der a  judgment  declaring  a  trust  against  the  fraudulent 
grantee  and  in  favor  of  the  unrepresented  estate  of  the 
grantor 

§  173a.  Creditor  suing  in  place  of  assignee. —  If  an  as- 
signee refuses  in  a  proper  case  to  institute  proceedings 
to  get  possession  of  the  assigned  property,  the  creditors 
collectively,  or  one  suing  in  the  right  of  all  who  may  join 
in  the  action,  may  compel  the  execution  of  the  trust  in 
equity,2  or  cause  the  removal  of  the  assignee  and  the 
appointment  of  another.  It  seems,  however,  that  in 
either  case  a  decree  for  a  single  debt  would  be  erroneous  ; 
the  decree  must  follow  the  assignment,  and  the  fruits  of 
a  recovery  must  be  distributed  according  to  its  terms.3 


suits  to  annul  a  fraudulent  deed,  not  '  Bach  man    v.   Sepulveda,    39  Cal. 

only  divest   the  title  of  a   fraudulent  688. 

grantee,  but  the  decree  may  proceed  -'  Lee  v.  Cole,   44   N.  J.  Eq.   322,  15 

to  vest  thetitle  in  the  plaintiff.    See  All.  Rep.  531 ;  White  v.  Davis,  48  N. 

Kinealy  v.  Macklin,  2  Mo.  A.pp.    -Ml  ;  .1    Eq.  22,21  Atl.  Rep.  1ST:  Kalnius  v. 

Epperson    v.    Burgett,    33    A.rk.  328.  Ballin,  52  N.  J.  Eq.  294,  28  Atl.  Rep. 

Tin'   Logical   theory  upon  which   (his  791. 

procedure  is  founded  is  not  easily  dis-  8Crouse  v.  Frothingham,  97  N.  Y. 

covered,     [n  the  absence  of  statutory  105.     Compare  Bate  v.  Graham,  11  N. 

authority   how   can   :i   court    become  Y.  '.':'>T :   Everingham   v.  Vanderbilt, 

1 1   of  anj   title  which    ii    can  12  Hun  (N.  Y.)  ','> ;  Manning  v.  Beck, 

confer  or  bestow  upon   the  creditor?  129  X.  Y.  1.  '.".)  N.   E.    Rep.  90;  Lee  v. 

h^  province  is  to  clear  incumbrances  Cole,    II   N.  .1.    Eq.  318,   15  All.   Rep. 

ierce  1  ransfers.  581 , 


§§  174-   T75  CONFESSION    l  II    JUDGMEN  I  . 

§  174.  Confession  of  judgment.  —  A  transfer  of  property 
by  a  person  heavily  indebted,  made  by  means  of  a  con- 
fession of  judgment  and  sale  on  execution,  was  adjudged 
void  in  Metropolitan  Bank  v.  Durant,1  upon  proof  that 
it  was  intended  to  defraud  creditors,  and  that  the  pur- 
chaser  had  knowledge  of  the  facts  Collusive  judgments, 
as  we  have  seen,3  are  always  open  to  the  attack  of  cred- 
itors. A  judgment  entered  by  confession  upon  an  insuf- 
ficient statement  of  facts  is  effectual  and  binding:  between 
the  parties,  and  a  sale  of  property  under  it  is  legal  and 
valid  against  all  the  world  except  existing  creditors  having 
a  lien  upon  the  property.3  And  while  in  the  absence  of 
knowledge  on  the  part  of  the  creditor  the  fraudulent  in- 
tent of  the  debtor  alone  will  not  invalidate  the  judgment, 
yet  where  the  judgment  is  entered  and  execution  levied 
originally  without  his  knowledge,  his  rights  will  be  subor- 
dinate to  the  ricrhts  of  creditors  who  took  an  attachment 
before  the  said  acts  were  ratified.4 

§  175.  Impounding  proceeds  of  a  fraudulent  sale.  —  W  hile 
it  may  be  true  that  the  money  received  by  a  fraudulent 
vendee  from  the  sale  of  the  property  is  not  legally  a  debt 
due  by  the  vendee  to  the  fraudulent  vendor,  because  the 
court  will  not  assist  to  enforce  or  render  effectual  the 
fraud,  yet  in  the  intention  of  the  parties  it  is  a  debt,  and 
creditors  may  treat  it  as  such  and  attach  or  reach  it  by 
judicial  process.5  The  beneficent  and  remedial  provi- 
sions of  the  statute  13  Eliz.  would  be  of  little  avail  if  a 
fraudulent  grantee  could  pass  the  property  over  to  a  mere 
volunteer  without    notice    of    the   fraud,    and  upon   that 


1  22  N.  J.  Eq.  35;    White  v.  Beiij;i-  17  N.   Y.   9;  Mitchell   v.  Van   Buren, 

min,    3   Misc.   (N.   Y.)  490,  23   N.   Y.  27  N.  Y.  300. 
Supp.  981.  'Galle  v.  Tode,  148  N.  Y.  270,  12  N. 

'-'  See  §  74,  and  note.  E.  Rep.  673. 

-Miller    v.    Earl.',    24    N.    V.    112.  'Heath    v.    Page,    63   Pa.  Si     124; 

Compare  Marrin  v.  Man-in,  27   llmi  French  v.    Breidelman,  2  Granl  (Pa.) 

(N.  Y.)  G02;  Dunham  v.  Waterman,  319;  Mitchell  v.  Stiles,  13  Pa.  SI 


320 


OUNTING    BY    FRAUDULENT    VENDEE. 


176 


ground  claim  that  the  property  or  its  proceeds  were  safe 
from  the  pursuit  of  creditors.1 

§  176.  Accounting  by  fraudulent  vendee  to  debtor  or 
creditor.  —  Though  a  party  may  have  intended  to  defraud 
the  creditors  of  a  debtor  by  taking-  and  converting  his 
property  into  cash,  such  intent  is  rendered  harmless  by 
his  delivering  the  proceeds  of  the  sale  to  the  debtor  or  his 
authorized  agent.  If  the  party  has  accounted  to  the 
debtor  for  the  proceeds  of  the  property  before  proceedings 
are  taken  against  him  by  the  creditor,  he  cannot  be  forced 
to  account  for  it  over  again."  The  creditor  must  show 
that  something  remains  which  ought  to  be  applied  on  the 
judgment.  Where  a  third  person  has  in  good  faith 
received  a  conveyance  of  the  property  in  trust  for  an 
alleged   fraudulent  grantee,   and    has    subsequently   con- 


"  Where  a  transfer  of  property  is 
made,  which  is  held  void  under  the 
provisions  of  the  bankruptcy  act,  as 
againsl  tin-  assignee  in  bankruptcy, 
the  transferee  is  properly  to  be  re- 
garded  as  a  trustee  for  tin-  plaintiff, 
and  to  I"'  held  to  account  as  such,  es- 
pecially where,  as  in  this  case,  il 
appears  that  sonic,  it'  not  all,  of  the 
property,  has  passed  away  from  the 
transferee."  Schrenkeisen  v.  Miller, 
'.)  Ben.  65.  It  dors  not  affed  the 
right  of  th^  creditor  to  an  accounting 
that  the  property  was  no  longer 
actually  in  tie-  hands  of  the  fraudu- 
lent grantee  at  t he  time  the  creditor 
obtained  judgment,  if  tin-  fraudulent 
grantee  still  retains  a  benefit  from 
the  illegal  transaction.  McConihe  v. 
Derby,  62  Hun    (N.   V. .  90,  16  N.   Y. 

Supp.   IT  1. 

Cramer  v.  Bl I.  57  Barb.   X.  Y.) 

If,:;,  affi'd    48   N.    Y.    684  ;   Murphy   v. 
Briggs,  89  N.  Y.  1 16     See  <  Iramer  v. 

Bl I.  57  Barb.  (N.  i    .'171  ;  Clements 

\.     M -e,    6    Wall.    299;    Davis    \. 

.".'    Barb.    (N.    Y  |    180.      In 


Greenwood  v.  Marvin,  111  N.  Y.  434, 
19  N.  E.  Rep.  228,  the  New  York 
Court  of  Appeals  said:  "The  equi- 
table rights  of  the  parties  were  to  re- 
main the  same  ;  the  legal  owner  was 
to  account  to  the  other  party  for  the 
net  profits  of  the  business,  and  no 
other  mode  of  division  is  suggested 
than  that  of  equality".  If,  therefore, 
that  agreement  effected  any  change 
in  the  relations  of  the  parties,  it 
operated  as  a  temporary  expedient  to 
bridge  over  the  period  of  Le  Grand 
Marvin's  pecuniary  embarrassment, 
presumably  with  a  view  of  restoring 
the  original  relations  of  the  parties  at 
some  future  time  when  it  would   be 

safe  to  <h>  so.      If  that  agreement  was 

executed.     ;|s      seelUS      Very      probahle, 

with  a  view  of  hindering  and  delay- 
ing the  creditors  of  Le  Grand,  it  was 
-till  competent  for  the  parties,  in  the 
absence  of  interference  h\  creditors, 
to  rescind  it  at  any  time,  and  restore 
t<  >  each  ol  her  an  equal  legal  interest 
in  the  property  acquired  under  such 
agreement." 


§  i77 


PERS<  >NAL    1 1   I  >i .  \1  |  \ 


veyed  it  to  such  grantee,  pursuant  to  the  trust,  it  has  been 
held  that  such  third  person  is  not  a  proper  defendant  in  a 
creditor's  action,  simply  because  no  cause  of  action  exists 
against  him.1  The  trustee,  under  an  assignment  of  lands 
which  is  declared  fraudulent  at  the  suit  of  a  creditor, 
cannot  be  compelled  to  account  for  the  rents  received  and 
applied  according  to  the  provisions  of  the  trust,  before 
the  commencement  of  the  action."  And  a  fraudulent 
grantee  who  is  forced  to  account  to  a  creditor  for  rents 
and  profits,  is  entitled  to  an  allowance  for  payments  made 
by  him  for  taxes,  interest  on  mortgages  and  repairs 
necessary  for  the  preservation  of  the  propertv.  The 
accounting  must  proceed  on  equitable  principles  ; 

§  177.  Personal  judgment  against  fraudulent  vendee.    -The; 
right  of  a  judgment-creditor  to  a  personal  or  money  judg- 


1  Spicer  v.  Hunter,  14  Abb.  Pr.  (N. 
Y.)4. 

Relief  at  law  and  in  equity. —  In 
Clements  v.  Moore,  6  Wall.  312,  the 
court  said  :  "  When  the  fact  of  fraud 
is  established  in  a  suit  at  law,  the 
buyer  loses  the  property  without 
reference  to  the  amount  or  applica- 
tion of  what  he  has  paid,  and  he  can 
have  no  relief  either  at  law  or  in 
equity.  When  the  proceeding  is  in 
chancery,  the  jurisdiction  exercised 
is  more  flexible  and  tolerant.  The 
equity  appealed  to  —  while  it  scans 
the  transaction  with  the  severest 
scrutiny  —  looks  at  all  the  facts,  and 
giving  to  each  one  its  due  weight, 
deals  with  the  subject  before  it  ac- 
cording to  its  own  ideas  of  right  and 
justice.  In  some  instances  it  visits 
the  buyer  with  the  same  consequences 
which  would  have  followed  in  an 
action  at  law.  In  others  it  allows  a 
security  to  stand  for  the  amount  ad- 
vanced upon  it.  In  others  it  compels 
tlir  buyer  to  accounl  only  tor  the 
difference  between  the  under  price 
21 


which  he  paid  and  the  value  of  the 
property.  In  others,  although  he 
may  have  paid  the  full  value,  ami  the 
property  may  have  passed  beyond  the 
reach  of  the  process  of  the  court,  it 
regards  him  as  a  trustee,  and  charges 
him  accordingly.  Where  lie  has 
honestly  applied  the  property  to  the 
liabilities  of  the  seller,  it  may  hold 
him  excused  from  further  respon 
sibility." 

2Coilumh  v.   Read,    -J I   X.    5 
See  ?'  36.       As    to    when    a    judgment 
against  an  assignee  cancelling  an  as- 
signment as  fraudulent  is  a  final  judg 
inent.    and    how    the    same  should    he 

entered  and  enforced,  see  Myers  v. 
Becker,  95  N.  V.  486. 

3  Loos  v.  Wilkinson,  113  X.  Y.  [H5, 
21  N.  E.  Rep.  ".'•i-'.  See  Smith  v. 
Wis...  132  X.  Y.  179,  30  N.  E  Rep. 
329  ;  Hamilton  Xat.  Bk.  \.  Balsted, 
134    X.   Y.  530,   31    N.    E     Rep    900 

i  lompare  I  >a\  is   v.    I pold,  s?  N    Y 

020  ;  Cutcheon  y .  I  orbitt,  '■»'.»  Mich 
578,  58  X.  W.  Rep  IT'.i :  Swift  v. 
Hart,  35  Bun  (N    Y. 


322  PERSONAL  JUDGMENT.  §177 

ment  against  a  fraudulent  vendee  of  his  debtor  l  comes 
up  frequently  for  adjudication,  and  is  discussed  in  many 
of  the  authorities.  In  the  case  of  Ferguson  v.  Hillman,'~ 
in  the  Supreme  Court  of  Wisconsin,  the  conveyances  and 
mortgages  had  been  adjudged  fraudulent  as  to  creditors, 
and  knowledge  of  the  fraud  had  been  fastened  upon  the 
grantee.  The  familiar  principle,  elsewhere  discussed,  to 
the  effect  that  a  fraudulent  grantee  in  possession  of  the 
property  of  the  debtor  cannot  be  protected,  as  against 
the  creditors  of  the  debtor,  even  to  the  extent  of  the 
money  or  other  consideration  given  for  the  transfer,  was 
invoked  and  applied.3  The  court  observed  that  it 
seemed  to  follow  as  a  necessary  consequence  that  a 
fraudulent  grantee  could  not  be  protected  in  the  posses- 
sion of  the  proceeds  of  such  property  received  by  him 
upon  effecting  a  sale  of  it.  The  property  in  the  hands 
of  a  fraudulent  purchaser  is  held  by  him  in  trust  for  the 
creditors  of  the  fraudulent  vendor,  and  when  the  property 
is  converted  into  money  the  fund  thus  created  is  impressed 
with  the  same  trust.  Were  the  rule  otherwise,  the  grantee 
might  defeat  the  creditor's  claim  by  fraudulently  changing 
the  character  of  the  property.  In  equity  such  money  in 
the  hands  of  the  fraudulent  grantee  is  a  fund  held  for  the 
benefit  of  the  creditors  of  the  grantor;  and  while  such 
creditors  may  not  be  able  to  maintain  an  action  at  law 
for  money  had  and  received  for  their  use,  because  they 
were  never  the  owners  of,  or  had  title  to  the  property 
which  had  been  converted  into  money,  yet  a  court  of 
equity,  having  all  the  interested  parties  before  it.  pos- 
sessed the  power  to  direct  such  application  of  it  as  would 

Sei  .'  62.  v.  Johann,  37  Wis.  246;   Union  Nat. 

i5  Wis.   lid).   10   X.  W.    Rep.  389.  Bank  v.  Warner,  12  Bun  (X.  Y.)306; 

Mason  v.  Pierron,  69  Wis.  585.  34  Briggs  v.    Merrill.   58   Barb.   (N.    Y.) 

\.  W.  Rep.  921;    Ringold   \.   Suiter.  389;   Fullerton  v.  Viall,  42   Bow.  Pr. 

35  W.  V.-i.  186,13  8.  E    Rep.  46.  (N.  Y. )  294 ;  Salt  Springs  Nat.  Bank  v. 

Gardinier    \.    Otis,    13   Wis.    160;  Fancher,  92  Bun(N.  Y.),  327,  36  N.  Y. 

Stein  \.  Hermann,  ',':;  Wis.  132;  Avery  Supp.  742. 


S  177  PERSONAL   JUDGMEN  I  . 

be  just.  The  court  further  held  that  if,  in  a  proper  1 
equity  had  the  power  to  order  the  fraudulent  grantee  to 
pay  or  apply  the  money  received  by  him  in  satisfaction  of 
the  debt  of  a  creditor,  then  the  fact  that  it  directed  a  per- 
sonal judgment  to  be  rendered  against  him  for  the  money 
so  received,  and  that  the  amount  be  collected  on  execu- 
tion, was  merely  a  matter  of  form,  which  did  not  prejudice 
his  rights,  and  of  which  he  could  not  complain.  Fuller- 
ton  v.  Viall 1  is  an  authority  in  point  in  this  discussion. 
This  important  case,  which  certainly  embodies  features 
of  vital  interest  to  creditors  and  vendees  whose  good 
faith  is  questioned,  seems  to  have  been  affirmed  both  at 
the  general  term  of  the  Supreme  Court  and  in  the  Court 
of  Appeals  of  New  York,  without  any  written  opinion 
having  been  given.  The  published  report  of  the  case  was 
prepared  by  one  of  the  counsel.  The  facts  were  briefly 
as  follows  :  The  defendant  had  taken  from  a  debtor  a  con- 
veyance of  real  estate,  subject  to  a  mortgage  of  $800, 
agreeing  to  pay  $1,000  in  addition.  The  sum  of  $500 
was  paid  to  the  debtor  in  cash,  and  $500  by  cancelling  a 
debt  due  from  the  debtor  to  the  grantee.  Before  the 
creditor's  suit  was  instituted  the  grantee  had  sold  the  real 
estate  to  a  bona  fide  purchaser,  and  realized  from  such 
sale  the  sum  of  $2,270.  The  court  found  that  the  con- 
veyance was  made  in  fraud  of  the  grantor's  creditors,  and 
that  the  creditors  were  entitled  to  judgment  against  the 
fraudulent  grantee  for  the  value  of  the  premises  over  and 
above  the  prior  valid  incumbrances.  The  recovery  was 
not  limited  to  the  amount  received  by  the  fraudulent 
grantee  on  the  sale,  but  his  liability  was  held  to  extend 
to  the  value  of  the  property  fraudulently  received  by  him. 

1  42  How.   Pr.    (N.  Y.)  294;  Swin-  Chamberlin  v.  Jones,  ill  1  n< i.  mi.  16 

ford  v.  Rogers,  23   Cal.  233;  .tones  v.  N.  E.  Rep    17s  :   Mason  \.  Pierron,  60 

Reeder,    22     Ind.     111;     Hubbell     v.  Wis.  583, 34  N.  W.  Rep.921  ;  Christian 

Currier,   92   Mass.    3:j:!  :    Dilworth   v.  v.  Greenwood,  23  Ark.  258.     See  Rob 

Curts,  139  111.  508,  29  N.  E.  Hep.  S(il  ;  inson  v.  Holt.  :'.'.)  N.  II.  557. 


324  Pi  RS<  >N  \l     JUDGMENT.  §  1 78 

and  which  he  had  put  beyond  the  reach  of  the  creditors 
of  his  fraudulent  grantor,  subject,  as  already  stated,  to 
the  prior  valid  incumbrances  The  grantee  must  have 
found  in  this  case  that  the  way  of  the  transgressor  was 
hard,  for  he  was  neither  allowed  credit  for  his  own  debt, 
which  constituted  part  of  the  consideration,  nor  for  the 
$500  paid  to  his  grantor  in  cash.1 

£  178.  —  Murtha  v.  Curl.ey2  apparently  puts  this  ques- 
tion of  the  creditors'  right  to  a  personal  judgment  against 
the  fraudulent  vendee  at  rest  in  New  York.  The  vendee 
had  foreclosed  a  fictitious  chattel  mortgage  upon  the 
property  of  the  debtor,  and  had  converted  the  proceeds, 
which  exceeded  the  creditors'  claim,  to  his  own  use. 
A  money  judgment  was  directed  against  the  vendee  for  the 
amount  of  the  plaintiffs'  claim.  The  court  held  that  this 
did  not  stamp  the  action  as  being  legal  rather  than  equi- 
table, and  that  the  judgment  was  proper  in  form.  Earl,  J., 
said  :  "  A  court  of  equity  adapts  its  relief  to  the 
exigencies  of  the  case  in  hand.  It  may  restrain  or 
compel  the  defendant  ;  it  may  appoint  a  receiver,  or 
order  an  accounting  ;  it  may  compel  specific  performance, 
or  order  the  delivery  to  the  plaintiff  of  specific  real  or 
personal  property  ;  or  it  may  order  a  sum  of  money  to  be 
paid  to  the  plaintiff,  and  give  him  a  personal  judgment 
therefor."  Where  the  property  has  been  converted  there 
is  nothing  to  be  sold,  and   no  occasion  for  a  receiver  and 


See    Union  Nat.  Bani  v.  Warner,  Farlin  v.  Sook,  30  Kan.  401,  I  Pac. 

1.'  Hun.  306-308;  Ferguson  v.   Hill-  Rep.    123.      In    Solinsky   v.    Lincoln 

man.  55  Wis   192,  12  X.  W.  Rep.  389.  Savings  Bank,  85  Tenn.  372,  the  court 

mi   X.    Y.   :;:•.':    12   AM..   N.   C.  (N.  says:    "When  a    fraudulent    vendee 

Y      12,  and   notes;  s    p.,  Warner  v.  has  so  concealed  or  disposed  of  the 

Blakeman,  4  Abb.  Ct    A.pp.  Dec.  (N.  property  that  creditors  cannot  reach 

Y.iVin:  Smith  \.  Sands,  I?  Neb.   Ill*,  or  identify  it.    the   creditor   may.  in 

23   x.   \\'.    Rep.   356,  citing  the  text  :  equity  at   least,  recover  the  proceeds 

Valentine  \.  Richardt,  126  X.  Y.  J 7 7 .  or  value  thereof."    Compare  Bads  v. 

'.-;    X.  E.  Rep.  255;   Bell  v.  Merrifield,  .Mason,  L6  Brad w.  (111.)  545. 
Hi!)    X.    Y.    207,    Hi    X.    E.    Rep.    55  ; 


§  179  ^|(  »NEY    JUDGM1 


no  special  need  to  state  an  account.1  In  Williamson  v. 
Williams,' the  fraudulent  vendee  had  sold  the  land  to  a 
bona  fide  purchaser,  and  it  was  said  that  having  deprived 
the  creditor  of  the  property,  and  obtained  its  price,  he 
must  be  held  responsible  by  reason  of  this  fraudulent 
disposition  of  the  property  to  the  amount  of  the  consid- 
eration received  by  him.  The  money  stood  for  the  land 
in  his  hands." 

§  179.  Money  judgment,  when  disallowed.— McLean  v. 
Cary,4  in  the  New  York  Court  of  Appeals,  is  a  peculiar 
case  in  which  a  money  judgment  was  denied.  Plaintiff 
was  a  judgment-creditor.  It  was  proved  substantially  thai 
the  debtor  Greene  sold  to  the  other  defendants  certain 
machinery  with  an  agreement  that  $12, coo  of  the  consid- 
eration was  to  be  paid  in  steam  power.  At  a  time  when 
$9,000  remained  unpaid  a  settlement  was  effected  practi- 
cally on  the  basis  of  a  balance  of  $4,000.  The  court 
avoided  the  settlement  as  being  fraudulent  against  the 
creditor,  and  the  question  as  to  the  authority  to  render  a 
money  judgment  against  the  defendants  was  presented 
The  complaint,  it  may  be  observed,  prayed  that  the  settle- 
ment beset  aside  as  fraudulent, that  a  receiver  be  appointed, 
and  that  the  creditor  be  paid  out  of  the  moneys  realized 
by  the  receiver.  No  money  judgment  was  demanded, 
and  the  court  held    that  under    the  circumstances    none 


1  See  also  Gillett  v.  Rate,  86  N.  Y.  poses  of  this  case,    I"    considered  in 

87,   10  Abb.  N.  C.  (N.  Y.)   88;   Steere  equity  as  the  laud  Itself." 

v.  Hoaglaud,  50  111.  877;  Quinby  v.  ;  In   Wheeler  v.  Wallace,  53   Mich. 

Strauss,  90  N.  Y.  664.  355,   ill   N.  W.    Rep.  :!:'..  it   was   held 

•11  Lea  (Tenn. )  370.     In  Valentine  that  creditors  levying  upon  property 

v.  Richardt,  126  1ST.  Y.  277,  27  N.  E.  fraudulently      transferred     had      no 

Rep.  255,  the  court  says  :  "The  fraud-  right  to  take  from  the  transferee  the 

ulent  conveyance  which  the  defend-  increase    it   thej    had    allowed    ii    '■> 

ant  obtained  from  the  owner  of  the  accumulate  for  a  long  time  under  his 

land  enabled  him  to  sell  it  to  a  pur-  management     before    attacking    the 

chaser  in  good  faith  and  the  money  transaction, 

that  he  received   therefor,   with  the  4  88  X.  V.  391. 
interest  thereon,  can,  for  all  the  pur- 


326  PERSONAL   JUDGMENT   AGAINST    WIFE.  §  180 

was  authorized,  as  the  contract  was  payable  in  steam 
power  and  not  in  money.  Under  the  practice  in  Illinois 
it  seems  to  be  implied  that  a  personal  or  money  judgment 
is  improper  in  an  action  to  annul  a  fraudulent  transfer.  In 
Patterson  v.  McKinney  '  this  objection  was  taken,  but  the 
court  said  that  as  the  cause  was  to  be  remanded  it  could  be 
obviated  by  making  an  alternative  decree  providing  that, 
if  the  judgment  was  not  paid  within  a  time  to  be  limited, 
the  land  should  be  sold  on  execution.  In  Dunphy  v. 
Kleinsmith,2  which  was  a  creditors'  suit  against  a  fraudu- 
lent  vendee,  a  judgment  for  damages  was  held  to  be 
improper  ;  the  correct  relief  was  said  to  be  by  decree  for 
an  account.3 

>:  180.  Personal  judgment  against  wife.— Where  property 
is  conveyed  to  a  wife  in  fraud  of  her  husband's  creditors,  it 
seems  that  a  judgment  in  personam  for  its  value  cannot  be 
taken  against  the  wife,  nor  in  case  of  her  death,  against  her 
executors.4  Miller,  J.,  said  :  "  While  the  books  of  reports 
are  full  of  cases  in  which  real  or  personal  property  con- 
veyed to  the  wife  in  fraud  of  the  husband's  creditors  has 
been  pursued  and  subjected  to  the  payment  of  his  debts 
after  it  had  been  identified  in  her  hands,  or  in  the  hands  of 
voluntary  grantees  or  purchasers  with  notice,  we  are  not 
aware  of  any  well-considered  case  of  high  authority  where 
the  pursuit  of  the  property  has  been  abandoned,  and  a  judg- 
ment in  personam  for  its  value  taken  against  the  wife. 
Certainly  no  such  doctrine  is  sanctioned  by  the  common 
law  ;  and,  though  the  present  suit  is  a  bill  in  chancery,  the 
decree  in  this  case  is  nothing  more  than  a  judgment  at  law, 
and  could  as  well  have  been  maintained  in  a  separate  suit 


1  97  111.41.  52.  followed.  Trust  Co.  v.  Sedgwick,  97 

II    Wall.  615 ;    compare    Maun  v.  U.  S.  304;  Huntington  v.   Saunders, 

Appel,  31  Fed.  Rep.  383.  100  U.  S.  78,  7  8.  C.   Rep.  356.     The 

See  .'  "il  rases  are  approved  in<  'lark  v.  Beecher, 

*  Phippa  v.  Sedgwick,  95  U.  S.  9:  154  U.  S.  631. 


§  l80  PERSONAL   JUDGMENT    AGAINST    Will. 

at  law  for  the  money  as  in  this  suit.  And  the  liability  of 
the  executors  of  the  wife  to  this  personal  judgment  must 
depend  on  the  same  principle  as  if,  abandoning  the  pursuit 
of  the  res,  the  assignee  had  brought  an  action  at  law  for 
the  money."  The  modifications  in  the  law  peculiar  to  the 
relationship  of  husband  and  wife  with  reference  to  their 
property  are  so  many  and  important  that  it  would  In- 
impracticable  to  attempt  to  formulate  rules  intended  for 
general  application  to  the  subject.  These  Supreme  Court 
cases  certainly  accomplish  an  unfortunate  result,  and  prob- 
ably  will  not  be  universally  accepted,  if,  indeed,  the  princi- 
ples they  embody  are  not  superseded  in  some  States  by  the 
removal  of  the  disabilities  incident  to  coverture.  In  Post 
v.  Stiger  1  it  appeared  that  property  had  been  conveyed  to 
a  wife  in  fraud  of  the  husband's  creditors.  The  wife  set 
up  as  a  defense  the  fact  that  she  had  disposed  of  it.  The 
court  said  that  she  must  answer  for  its  value.  An  attempt 
was  made  to  show  that  she  had  subsequently  lost  by  bad 
bargains  all  the  property  that  she  had  acquired  by  the  con- 
veyance. The  proofs  did  not  seem  to  sustain  this  view. 
but  the  court  remarked  that  even  if  it  had  been  so  proved 
this  would  not  relieve  her  from  liability,  and  continuing 
said:  "She  held  the  property  as  trustee  of  her  husband's 
creditors,  and  dealt  with  it  at  her  peril.  A  fraudulent 
grantee  cannot  repel  the  claims  of  the  creditors  of  the 
grantor,  by  simply  saying  :  '  I  have  lost,  by  imprudent  bar- 
gains or  collusive  foreclosures,  the  property  I  attempted  to 
conceal,  and,  therefore,  I  am  answerable  for  nothing.'"  It 
may  be  urged  that  this  case  is  a  dictum  on  the  point  cited. 
This  is  probably  a  legitimate  criticism,  for  the  court  prac- 
tically found  that  the  wife  still  had  the  property;  yet  as  an 
expression  of  opinion  of  a  highly  intelligent  court  pointing, 
as  we  claim,  in  the  right  direction,  we  regard  the  dictum 
as  worthy  of  adoption  as  an  absolute  authority. 

1  29  N.  J.  Eq.  55S.     See  Lee  v.  Cole,  44  N.  J.  Eq.  318,   m  Ail.  Rep.  531. 


5  ;8  FORM    OF  JUDGMENT.  §  l8l 

§  181.  Judgment  must  conform  to  relief  demanded.  —  As  a 
aeneral    rule,    the    judgment  must    harmonize    with    the 

O  JO 

demand  for  relief,1  though,  as  we  have  seen  under  the 
modern  procedure,  a  mistake  in  the  prayer  is  not  fatal,  and 
equity  may,  in  its  discretion,  award  a  judgment  such  as  the 
facts  justify.  In  Curtis  v.  Fox,2  the  plaintiff  failed  to 
establish  that  the  conveyance  by  the  debtor  to  his  wife 
was  fraudulent,  and  the  complaint  was  consequently  dis- 
missed. It  appeared  that  the  wife  died  pending  the  action, 
and  the  creditor  contended  that  the  debtor  defendant 
thereupon  acquired  a  legal  interest  in  her  real  estate,  and 
that,  instead  of  dismissing  the  complaint,  a  judgment 
should  have  been  rendered  providing  for  the  sale  of  such 
interest,  and  an  application  of  the  proceeds  to  the  satis- 
faction of  the  creditor's  judgment.  Cases  like  the  Bank 
of  Utica  v.  The  City  of  Utica,;J  and  Cumming  v.  The 
Mayor  of  Brooklyn,4  were  cited,  in  which  it  was  held  that 
where  both  parties  agree  to  submit  the  case  to  the  juris- 
diction of  chancery,  or  the  defendant  omits  to  raise  the 
objection  by  plea  or  in  his  answer,  the  court  will  retain 
jurisdiction  and  determine  the  case,  although  the  plaintiff 
may  have  an  adequate  remedy  at  law.  But  the  court  held 
that  the  principle  of  these  cases  had  no  application  to  the 
case  of  Curtis  v.  Fox  above  cited,  because  in  that  case  Fox 
had  no  legal  interest  in  the  land,  and  did  not  acquire  any 
until  long  after  putting  in  his  answer.  The  complaint  did 
not  allege  any  such  interest,  but  sought  relief  solely  upon 
the  ground  that  the  title  of  the  wife  was  fraudulent 
as  against  the  plaintiff,  and  this  was  the  matter  litigated. 
As  the  husband  had  no  opportunity  to  raise  the  objection 
that  a  sale  on  execution  was  the  proper  remedy  of  the 
plaintiff,  so  far  as  the  interest  acquired  upon  the  death  of 
his  wife  was  concerned,  his  silence  did  not  waive  it. 


1  Dumpliy   v.  Kleinsmith,  11   Wall.         :i4  Paige  (N.  Y.)  399. 
615.  *  11  Paige  (N.  Y.)  596. 

i;  \.  Y.  299. 


§   [82  MUST   ACCORD    Willi    COMPLAINT. 

§  182.  Must  accord  with  complaint.—  It  lias  been  held  in 
New  York  to  be  no  ground  of  reversal  of  a  judgment  thai 
the  relief  it  extended  was  not  prayed  for  in  the  complaint, 
provided  it  was  such  a  decree  as  the  plaintiff  was  entitled 
to  upon  the  evidence.1  While  the  effect  of  an  erroneous 
prayer  in  a  complaint  can  ordinarily  be  overcome,  yet  the 
general  rule  is  that  the  allegations  of  the  complaint  must 
support  the  judgment.  Thus,  it  was  said  by  the  Supreme 
Court  of  California,  that  a  judgment  which  was  not  sup- 
ported by  the  pleadings  was  as  fatally  defective  as  one 
which  was  not  sustained  by  the  verdict  or  finding.  The 
judgment  must  accord  with  and  be  warranted  by  the  plead- 
ings of  the  party  in  whose  favor  it  was  rendered. ~  This 
may  be  true  under  the  liberal  interpretation  of  the  statutes 
regulating  the  reformed  procedure,  but  it  is  unwise  for  a 
complainant  to  place  strong  reliance  upon  such  a  rule  of 
practice.  On  the  contrary,  the  bill  should  shadow  forth  the 
case  which  the  evidence  is  calculated  to  disclose,  or  the 
variance  may  prove  fatal.  Thus,  where  the  bill  impeached 
a  deed,  and  prayed  its  avoidance  upon  allegations  of  actual 
fraud,  there  is  authority  that,  where  the  defendant  is 
brought  into  court  to  answer  such  a  charge,  and  so  effect- 
ually  repels  it  that  the  court  would  not  be  justified  in 
holding  that  the  averment  was  proved,  the  complainant  is 
not  at  liberty  to  change  his  ground,  and  obtain  other 
relief,  based  upon  proof  of  constructive  fraud,  or  other 
equities  supposed  to  be  established  by  the  evidence.3 
And,  where  a  bill  charges  actual   and   intentional  fraud. 


1  Buswell  v.  Lincks,  8  Daly  (N.  574.  "If  a  bill  charges  fraud  as  a 
Y.)  518.  ground  of  relief,  fraud  must  be  proved. 

2  Bachman  v.  Sepulveda,  39  Cal.  The  proof  of  other  facts,  though  such 
689;  Bailey  v.  Eider,  10  N.  Y.  363.  as  would  be  sufficient,  under  some 
The  plaintiff  cannot  support  a  re-  circumstances,  t<>  constitute  a  claim 
covery  on  a  ground  that  be  expressly  for  relief  under  another  bead  of 
repudiates.  McCarthy  v.  Scanlon,  equity,  will  nol  prevent  the  bill  from 
176  Pa.  St.  262,  35  Atl.Rep.  189.  being  dismissed."      See  also  Fisher  v. 

3  Clark  v.  Krause,  2  Mac-key  (D.  C.)      B ly,  1  <  nil.  C.  C.  206. 


330  CONTRADICTORY    VERDICTS — NEW    TRIAL.      §§  I  S3,    [83a 

and  the  prayer  for  relief  proceeds  upon  that  theory,  the 
complainant  cannot,  under  the  prayer  for  general  relief, 
rely  upon  circumstances  which  make  out  a  case  for  relief 
under  a  distinct  head  of  equity,  although  such  circum- 
stances substantially  appear  in  the  bill,  but  are  charged 
only  in  aid  of  the  actual  fraud  alleged.1 

Manifestly  a  court  of  equity  may  adapt  its  relief  to  the 
exigencies  of  the  case.3 

§  183.  Contradictory  verdicts.  —  In  Love  v.  Geyer,3  which 
was  an  action  brought  by  a  judgment-creditor  of  the 
grantor,  against  the  grantor  and  grantee,  to  avoid  a  fraudu- 
lent conveyance,  a  general  verdict  was  returned  against 
both  defendants.  A  new  trial  was  awarded  to  the  grantor 
and  denied  to  the  grantee,  and  the  case  was  continued 
without  judgment.  At  a  subsequent  term  the  cause  was 
tried  by  the  court  as  to  the  grantor,  and  a  finding  and 
judgment  rendered  in  his  favor.  The  court,  over  the 
objection  of  the  grantee,  rendered  judgment  against  him, 
upon  the  former  verdict  of  the  jury  setting  aside  the  con- 
veyance as  fraudulent.  On  review,  the  judgment  was 
very  correctly  held  to  be  erroneous.4  Clearly,  if  no  fraud 
had  been  practiced  by  the  grantor,  it  was  an  absurdity  to 
find  that,  as  to  the  grantee,  the  conveyance  was  fraudu- 
lent. Both  parties  must  necessarily  be  implicated  in  the 
fraud. 

§  183a.  New  trial.  —  The  statutes  granting  statutory  new 
trials  as  matter  of  right  are  not  applicable  to  suits  brought 
to  annul  fraudulent  conveyances.5 


1  Eyre  v.  Potter,  15  How.  42.     See  346  ;  also  Hollingsworth  v.  Crawford, 

§  155.  60  lnd.  70. 

Valentine  v.  Richardt,  126  N.  Y.  5  See    Somerville  v.  Donaldson,  26 

272  ;  Murtha  v.  Curley,  90  N.  Y.  372  ;  Minn.  75,  1  N.  W.  Rep.  808  ;  Shumway 

Van    Rensselaer   v.    Van    Rensselaer,  v.  Shumway,   1  Lans.   (N.  Y.)  474, 

I!:;  N.  V.  208,  214,  21  N.  E.  Rep.  75.  affi'd  42  N.  Y.  143;  Perry  v.  Ensley, 

3 1  1 11.I.  12.  10  lnd.  378  ;  Sedg.  &  Wail  on  Trial  of 

'See   Romine  \.   Romine,    59   lnd.  Title  to  Land,  (2d  ed.)  §  595. 


CHAPTER  XII. 

PROVISIONAL    RELIEF  — INJUNCTION  —  RE- 
CEIVER  — ARREST. 


£  184.  Provisional  relief. 
185.  Injunction,  when  allowed. 
lS(i.  When  injunction  refused. 
187.  Receiver  in  contests  over  real 
property. 


188.  Receivers  of  various    interests. 

189.  Title  on  death  of  receiver. 

190.  Removal  and   dismissal   of    re- 

ceiver. 

191.  Arrest  of  defendant. 


§  184.  Provisional  relief.  —  In  view  of  the  class  of  debtors 
and  alleged  purchasers  against  whom  creditors  are  com- 
pelled to  litigate,  it  is  perhaps  needless  to  recall  the  great 
importance  of  prompt  and  efficient  provisional  remedies 
easily  accessible  to  complainants.  The  defendants  may 
be  contemplating  flight,  or  may  be  engaged  in  wasting  or 
converting  the  property  with  a  view  of  thwarting  the 
creditors'  proceedings.  The  relief  afforded  by  final  decree 
will  perhaps  come  too  late  to  be  practically  effectual. 
In  some  instances  an  order  of  arrest  may  be  procured 
against  the  person  of  the  debtor,  or  of  his  co-conspira- 
tors ;  in  others  an  injunction  may  issue  restraining  any 
misuse,  incumbrance,  or  disposition  of  the  property  claimed 
to  have  been  covinously  alienated;  while  in  others  a 
receiver  may  be  appointed  to  take  possession  and  care  of 
the  property  pending  the  litigation.1  Indeed,  the  appoint, 
ment  of  a  receiver  in  a  creditors'  suit  is  said  to  be  almost 
a  matter  of  course,3  though  this  broad  proposition  has 
been  denied.3     A  receiver  may  even  be  appointed  before 


1  Ellett  v.  Newman,  92  N.  C.  523.  appoint    a    receiver,    Shainwald    v. 

2Bloodgood  v.   Clark,  4  Paige  (N.  Lewis,  7  Sawy.  148. 
Y.)  577 ;  Fitzburgh  v.  Everingham,  6  Rodman   r.    Harvey,    L02   N 

Paige  (N.  Y.)29;  Runals  v.  Hardin-,  8  S.  E.  hep-  888;    Dollard   v.  Taylor, 

83  111.  75  ;  Shainwald  v.  Lewis,  6  Fed.  33  N.  Y.  Super.  Ct.   196. 
Rep.   770.     See   as  to  jurisdiction  to 


332  [NJUNCTK  >\.  §   185 

answer  filed  in  an  urgent  case,1  or  before  judgment,2  but 
only  when  it  is  manifest  that  the  fund  is  in  danger  of 
being  lost.3  Misconduct  and  insolvency  of  the  defendant 
enter  into  the  merits  of  the  application.4  The  receiver- 
ship will  be  denied  when  it  does  not  distinctly  appear  that 
there  is  any  property  to  be  preserved.0 

£  185.  Injunction,  when  allowed.  —As  has  been  elsewhere 
shown,  the  courts  will  not,  ordinarily,  interfere  by  injunc- 
tion, or  otherwise,  at  the  instance  of  a  contract-creditor, 
to  restrain  the  debtor's  control  over  his  business,  or 
any  disposition  of  his  property.6  Hyde  v.  Ellery7  is  an 
exception  to  the  usual  rule,  additional  to  those  heretofore 
noticed.8  It  appeared  in  that  case  that  the  debtor 
had,  by  fraudulent  means,  purchased  a  large  quantity  of 
goods  from  various  merchants,  upon  credit,  and  had  sold 
the  goods  at  auction  so  that  it  was  practically  impossible 
to  trace  them.  An  injunction  was  allowed  in  favor  of 
simple  contract  creditors,  upon  the  theory  that  its  issuance 
would  prevent  a  multiplicity  of  suits,  and  furthermore, 
because,  as  the  relief  sought  was  to  set  aside  a  transaction 
entered  into  with  the  intention  to  defraud  creditors,  an 
injunction  was  necessary  as  ancillary  to  that  relief.  In 
another  case  which  arose  in  Pennsylvania  it  was  decided 
that  a  fraudulent  severance  of  fixtures,  made  with  a  design 


1  Weis  v.  Goetter,  72  Ala.  259  ;  Micou  5  First  National   Bank  v.  Gage,  79 

\.  Moses,  72  Ala  439.  111.  207. 

2Co1hh   v.   Meyers,  42  Ga.  46.     See  6  Uhl   v.    Dillon,    10  Md.   500 ;  Mc- 

Heyneman    v.    Dannenberg,    6    Cal.  Goldrick    v.     Slevin,    43     Ind.     5:2:2  : 

376;  Field  v.  Holzmati,  93  Ind.   205;  Dodge  v.  Pyrolueifce  Manganese  Co., 

Wblfev.Claflin,81Ga.64,6S.E.  Rep.  69  Ga.  665;  Johnson  v.  Farnum,    56 

599;    ortoi,    v.    Madden,  75   Ga.   83;  Ga.    144;   Adee  v.   Bigler,   81    X.    Y. 

Cogburn  v.  Pollock,  54  Miss.  639.  349;  May  v.  Greenbill,  80  Ind.   124; 

Rheinstein  v.  Bixby,  92  X.  C.  307.  Whitney  v.  Davis,  148  X.   V.  250,  42 

See  W. Thorn  v.  Kalm.  93  Ala.  207,9  N.    E.   Rep.   661;  Spelman  v.    Freed- 

So.  Rep.  729.  man,  130  X.  Y.  425,  29  N.  E.  Rep.  765. 

*Werborn    v.    Kalm,   93  Ala.  207,  9  See  §  52. 

So.  Rep.  729.  718  Md.  501. 

»See  ?  5:?. 


§  I  85  [NJUNCTII  IN.  5  5  j 

to  defeat  the  lien  of  a  judgment,  could  be  restrained  in 
equity.1  And  an  injunction  has  been  issued  in  aid  of  an 
attachment.3 

In  suits  to  annul  fraudulent  transfers  relief  by  injunc- 
tion is  often  indispensable.  Thus,  where  the  petition 
alleged  that  an  action  was  pending  by  plaintiff  against  one 
of  the  defendants,  in  which  certain  real  estate,  which  had 
previously  been  fraudulently  conveyed  to  another  defend- 
ant, was  attached,  and  the  defendants  were  about  to  dis- 
pose of  such  real  estate  for  the  purpose  of  defeating 
plaintiff's  claim,  it  was  decided  that  a  temporary  injunc- 
tion restraining  such  sale  was  properly  continued  to  the 
final  hearing,  notwithstanding  the  filing  of  an  answer  deny- 
ing all  fraudulent  intent.3  In  a  case  in  which  the  bill 
charged  that  the  defendant,  who  was  a  trustee  under  an 
assignment  for  creditors,  was  a  notoriously  bad  character, 
and  had  refused  to  allow  an  inventory  of  the  assigned 
property  to  be  made,  and  hence,  if  loss  resulted,  the  cred- 
itors would  be  unable  to  show  the  extent  of  it,  the  court 
held  that  it  was  justified  in  granting  an  injunction  and 
appointing  a  receiver  without  notice.'1  Doubts  as  to  the 
good  faith  of  an  assignment  and  the  solvency  of  the 
assignee  will  justify  an  injunction  against  a  sale."'  And 
where  a  suit  was  brought  by  creditors  of  a  deceased 
debtor  to  reach  property  fraudulently  alienated  by  him 
in  his  lifetime,  it  was  decided  that  pending  the  suit  the 
court  properly  enjoined  the  defendant  from  incumbering 
or  conveying  the  land.'5  So  an  injunction  may  issue  to 
stay  waste.7     So  a  defendant  may  be  restrained  pending 


1  Winner's  Appeal,  45  Pa.   St.  455.  'Rosenberg  v.    Moore,    11    Md    ::;>'• 

Compare  Gill  v.  Weston.  110  Pa.  St.  See  Blondheim  v.  Moore,  11   Md 

317,  1  Atl.  Rep.  921.  Preiss  \    Cohen,  112  N.  C   278,   17 

-People,  ex  rel.  CaufTman,  v.  Van  S.  E.    Rep   520. 

Buren,  136  N.  Y.  252,  ::\!  X.  E.   Rep.  '    Appeal  of  Fowler,  81    Pa    St.  M9 

775,  i  Tessier    v.    Wyse,   3    Bland'e   I  !h. 

3  Joseph  v.  McGill,  52  Iowa,  127.  (Md.  i  29. 


334  WHEN    INJUNCTION    REFUSED.  §§186,187 

the  hill  from  incumbering  shares  of  stock  sought  to  be 
reached  by  a  creditor.1  A  chattel  mortgagee  may  be 
restrained  from  exercising  his  power  of  sale  on  a  bill  filed 
to  annul  the  mortgage.2  It  may  be  observed  that  a 
denial  in  the  defendant's  answer  that  he  has  any  property 
does  not  constitute  a  cause  for  dissolving  an  injunction 
restraining  him  from  assigning  or  disposing  of  his  prop- 
erty.3 And  if  creditors  choose  to  permit  the  officers  and 
directors  of  an  insolvent  corporation  to  remain  in  posses- 
sion and  control  of  its  assets,  the  mere  fact  of  insolvency 
will  not  operate  as  an  injunction  against  any  creditor 
from  obtaining  a  preference  through  legal  process  or  by 
agreement  with  the  corporation.4 

§186.  When  injunction  refused. — An  injunction  will  not 
be  issued  unless  facts  are  shown  from  which  an  issuance 
appears  to  be  a  necessity  in  order  to  save  the  creditor's 
rights,  and  to  prevent  the  wasting  of  the  subject-matter 
of  which  he  is  in  pursuit.  Thus,  in  Portland  Building 
Association  v.  Creamer,5  it  appeared  that  a  creditor's 
bill  was  was  filed  to  set  aside  as  fraudulent  a  conveyance 
of  lands  about  one-half  of  which  was  woodland.  The 
court  held  that  an  injunction  which  restrained  the  grantee 
from  cutting  and  removing  the  timber  from  the  premises 
would  not  be  continued,  it  being  shown  that  the  value  of 
the  land,  without  the  timber,  was  ample  to  satisfy  the 
creditor's  claim  in  case  the  conveyance  should  ultimately 
be  annulled. 

.^187.  Receiver  in  contests  over  real  property.  —  Where 
real  property  is  fraudulently  transferred,  the  court,  as  we 
have    seen,    may    adjudge    and    direct     a    transfer    to    a 


1  MacKaye  v.  Soule,  25  N.  Y.  Supp.  3New  v.  Bame,  10  Paige  (N.Y.)  502. 

798.  1  Rickerson  Rolling  .Mill  <'<>.  v.  Far- 

■  Bennetl    v.    Wright,    ;;    linn   (N.  fell  F.  &  M.  Co.,  13  U.  S.  App.  172. 

V.i  331,  28  N.  Y.  Supp.   I.-,:;.  ;;|   N.  .).  Eq.  107. 


§  1 87 


REl   EIVER. 


335 


receiver.1  Vause  v.  Woods2  is  an  illustration  of  the  dis- 
inclination of  the  court  to  interfere  by  the  appointment 
of  a  receiver  of  real  property,  where  the  party  in  posses- 
sion has  what  purports  to  be  the  legal  title.  The  < 
came  up  on  appeal  from  an  order  appointing  a  receiver 
upon  a  creditor's  bill  to  take  possession  of  the  property 
alleged  to  have  been  conveyed  in  fraud  of  the  plaintiff. 
Simrall,  J.,  said  (p.  128)  :  "  As  against  the  legal  title,  the 
interposition  is  with  reluctance  ;  it  will  only  be  done  in 
case  of  fraud  clearly  proved,  and  danger  to  the  property."'' 
Provisional  relief  is  not  encouraged  in  land  cases,  because 
the  subject-matter  of  contention  is  immovable,  practically 
indestructible,  and,  unlike  personalty,  cannot  be  spirited 
away. l  In  New  York  a  receiver  will  not  be  appointed 
in  ejectment  before  judgment.5  This  practice  has  been 
a  subject  of  criticism.0  The  rule  is  otherwise  in  an 
equitable  action  to  annul  a  conveyance  of  real  prop- 
erty, even  though  it  is  conceded  that  ejectment  could 
have  been  brought  in  the  place  of  the  equitable  action  ; ' 


1  Cole  v.  Tyler,  65  N.  Y.  77 ;  Mc- 
Caffrey v.  Hickey,  66  Barb.  (N.  Y.) 
489,  492  ;  Chautauque  County  Bank 
v.  Risley,  19  N.  Y.  369  ;  White's  Bank 
of  Buffalo  v.  Farthing,  9  Civ  Pro.  (N. 
Y.)  66,  101  N.  Y.  344,  4  N.  E.  Rep. 
734.     See  §  170. 

2  46  Miss.  120. 

3  Compare  Lloyd  v.  Passingham,  16 
Ves.  Jr.  68 ;  Mays  v.  Rose,  Freem. 
Ch.  (Miss.)  718;  Jones  v.  Pugh,  8 
Ves.  71  ;  Walker  v.  Denne,  2  Ves.  Jr. 
170  ;  Mapes  v.  Scott,  4  111.  App.  268  ; 
Sedg.  &  Wait  on  Trial  of  Title  to  Land, 
Chapter  XXIII ;  Rheinstein  v.  Bixhy, 
92  N.  C.  307 :  Beach  on  Receivers, 
§  67. 

4  Sedg.  &  Wait  on  Trial  of  Title. 
§  631. 

5  Guernsey  v.  Powers,  d  Bun  (N. 
Y.)  78;  Burdell  v.  Burdell,  54   Mow. 


Pr.  (N.  Y.)  91 ; Thompson  v.Sherrard, 
85  Barb.  (N.  Y.)  593;  Sedg.  &  Wad 
on  Trial  of  Title  (2d  ed.),  ?'  615.  In 
La  Ban  v.  Huetwohl,  60  Hun  (N.  Y.) 
408,  15  N.  Y.  Supp.  491,  the  court 
says:  "  The  law  will  not  take  the  prop- 
erty of  a  defendant  from  him  pending 
an  action  for  its  recovery  :  and  that 
wise  and  salutary  rule  would  be  vio- 
lated if  a  receiver  could  be  appointed 
to  take  the  rents." 

6  Sedg.  &  Wait  on  Trial  of  Title  (2d 
ed.),  >?632. 

i  Mitchell  v.  Barnes,  22  Bun  (N.  Y. 
194.  See  the  dissenting  opinion  of 
Learned,  P.  J.,  in  this  case.  The  suit 
was  instituted  to  annul  a  deed  upon 
the  -round  that  the  grantor  was  in 
sane,  and  the  conveyance  was  pro 
cured  by  improper  influences.  The 
same  relief  could  have  been  procured 


RECEIVERS    OF   VARIOUS    INTERESTS. 


§   188 


but    even     in     such     cases    the    relief    is    not    easily    se- 
cured.1 

£  188.  Receivers  of  various  interests.  —  Receiverships  are 
ordinarily  allowed  only  in  clear  cases.2  The  receiver  is 
appointed  for  the  benefit  of  all  parties  who  may  establish 
rights  in  the  case.3  The  pendency  of  the  proceeding 
supersedes  the  right  of  the  debtor  to  transfer  his  prop- 
erty.4 On  supplementary  proceedings  under  the  Wis- 
consin Code  to  enforce  a  decree  for  alimony,  the  court 
may  appoint  a  receiver  to  take  possession  of  the  effects 
of  the  defendant  in  the  divorce  proceedings  ;  the  sheriff's 
return  of  the  execution  is  sufficient  ground  therefor,  and 
the  receiver  thus  appointed  may  attack  a  fraudulent  con- 
veyance of  the  debtor's  real  estate  made  with  intent  to 
defeat  the  decree  for  alimony.0  A  receiver  has  been 
appointed  of  crops  growing  on  a  plantation  ;6  and  in  a 
case  where  an  annuity,  which  was  charged  upon  real 
property,  was  in  arrear,7  and  also  of   a   living.8     That  the 


in  ejectment.  Van  Deusen  v.  Sweet. 
51  N.  Y.  378.  Hence,  as  a  receiver 
could  not  be  had  in  ejectment,  it  was 
argued,  in  this  dissenting  opinion, 
that,  by  analogy,  none  should  he 
appointed  in  the  suit  in  equity.  The 
majority  of  the  court  declined  to 
adopl  this  view.  A  i-eceiver  is  fre- 
quently appointed  in  suits  to  foreclose 
mortgages,  when  it  appears  that  the 
seen  riiy  is  insufficient  and  the  mort- 
gagor is  insolvent.  See  Haas  v.  Chi- 
cago Building  Society,  1  Am.  Insolv. 
Rep.  301  :  Myers  v.  Estell,  48  Miss. 
372;  llyinan  v.  Kelly,  1  Nev.  179. 
See  [ns.  Co.  v.  Stebbins,  8  Paige  (N. 
Y  i  565  :  Cheever  v.  Rutland  &  B.  R. 
R.  Co.,  39  Yi.  654  ;  Brown  v.  Chase. 
Walker's  Ch.  (Mich.)  43;  Finch  v. 
Houghton,  1!)  Wis.  150  :  <  'allanan  v. 
Shaw.  19  Iowa.  183.  Ami  a  receiver 
may  be  had  in  an  action  to  foreclose 


a  contract  for  the  sale  of  land.     Smith 
v.  Kelley,  31  Hun  (N.  Y.)  387. 

1  McCool  v.  McNamara,  19  Abb  N. 
C.  iX.  V.)344. 

2  Fox  v.  Curtis.  176  Pa.  St.  52.  34 
Atl.  Rep.  952;  Chicago  &  A.  Oil  & 
Mining  Co.  v.  U.  S.  Petroleum  Co., 
57  Pa.  St.  83. 

3  First  Nat.  Bk.  v.  Barnum  Wire  & 
Iron  Works,  60  Mich.  199.27N.W.  Rep. 
567;  Delany  v.  Mansfield,  1  Hogan 
'Irish  Rolls  Ct.)  234;  Hooper  v.  Win- 
ston. 21  III.  353. 

4  Journeay  v.  Brown,  26  N.  J.  Law, 
111. 

Marker  v.  Dayton.  2S  Wis.  307. 

"  Micou  v.  Moses,  72  Ala.  1:59.     See 

llemlriv  v.  American  F.  L.  Mortgage 

Co.,  95  Ala.  313,  II  So.  Rep.  213. 

Sankey    v.   O'Maley,  2  Moll.  491. 

N  Hawkins  v.  Gathercole,  31  Kng.  L. 

&  Eq.  305  :  Beach  on  Receivers,  §  619. 


§  189,    I90  TITLE    OX    DEATH    OF    I' I  I   I  ! ',  ER. 

debtor  is  insolvent,  the  grantee  a  non-resident,  and  the 
goods  are  being  taken  from  the  jurisdiction  will  warrant 
a  receiver.1  The  allegation  of  insolvency  is  vital  under 
the  reformed  procedure,  allowing  a  bill  by  a  simple  con- 
tract creditor.'3  Where  a  decision  is  rendered  setting 
aside  a  sale  of  land,  a  receiver  may  be  appointed  to  sell 
and  convey  the  property.5  A  receiver  was  appointed 
after  judgment  in  New  Jersey  to  receive  rings  and 
jewelry,  which  were  decreed  not  to  be  wearing  apparel.1 
So  a  receiver  may  be  had  of  a  stock  exchange  seat.6 

§  189.  Title  on  death  of  receiver.  —  Where  a  receiver  of 
a  debtor's  property  has  been  appointed,  and  the  debtor 
has  executed  the  usual  assignment  of  the  property  to  him. 
upon  the  death  of  the  receiver  the  title  to  the  property 
vests  in  the  court.  The  receiver's  possession  is  the 
court's  possession,  and  he  is  merely  its  agent  or  repre- 
sentative. The  functions  of  the  receiver  continue  after 
the  death  of  the  appointee,  and  it  is  competent  for  the 
court  to  appoint  a  successor  to  conduct  and  complete  the 
litigation,  and  in  other  respects  fulfil  the  duties  which 
the  first  receiver  left  incomplete.0  Nor  is  it  necessary 
that  the  defendants  in  the  suits  should  be  given  notice  of 
proceedings  for  the  appointment  of  a  successor  to  the 
first  receiver." 

§  190.  Removal  and  dismissal  of  receiver. —  I  he  removal 
of  a  receiver  is  a  matter  resting  in   the  sound  discretion 

•Heard  v.   Murray,   93  Ala.    127.  9  *  Frazier  v.    Barnum,   19  X.  J.  Eq. 

So.  Rep.  514.  316. 

8  Moritz  v.  Miller,  87  Ala.  331,  6  So.  Habenich*    v.   Lissak,  Ts  '  !al.  351, 

Rep.  269.  20  Par.  Rep.  874. 

3Shand  v.   Hanley,    71   X.  Y.  319.  6  NicoU     v.    Boyd,    90    V    Y.    519. 

In  Massachusetts  a  receiver  will  not  A    change    in    receivers    either    l»\ 

be  appointed  to  collect  choses  in  ac-  resignation  or  removal  does  nol  abate 

tion  due  the  debtor  from  persons  re-  the  action.     Begewisch  v.  Silver,  140 

siding  in  another  jurisdiction.     Amy  X.  Y.   111.  35  N\  E.  Rep.  658 

v.  Manning,  149   Mass.  487,  21    X.  E.  :  NicoU   v.  Boyd,  90  X.  Y.  519 

Rep.  49:}.    ~  also  Ativ.-(M.nl.  v.  Day,  2  Madd 


338  REMOVAL   AND    DISMISSAL   OF    RECEIVER.  §  I90 

of  the  court.1  "The  jurisdiction  of  a  court  of  equity," 
says  Mr.  High,2  "  which  is  exercised  in  the  removal 
of  receivers,  bears  a  striking  resemblance  to  that  which 
is  called  into  action  upon  the  dissolution  of  an  interlocu- 
tory injunction,  and  in  both  cases  the  power  to  terminate 
seems  to  Mow  naturally  and  as  a  necessary  sequence 
from  the  power  to  create.  And  as  an  interlocutory 
injunction  is  usually  dissolved  upon  the  coming  in  of 
defendant's  answer,  denying  under  oath  the  allegations 
of  the  bill,3  so  in  the  case  of  a  receivership,  if  the  answer 
under  oath  fully  and  satisfactorily  denies  the  equities  of 
the  bill,  or  the  material  allegations  upon  which  the  appoint- 
ment was  made,  and  these  allegations  are  not  sustained 
by  any  testimony  in  the  case,  the  order  of  appointment 
will  be  reversed  and  the  receiver  removed."  4  It  is  said  that 
the  high  prerogative  act  of  taking  property  out  of  the  hands 
of  a  party  and  putting  it  in  pound  ought  not  to  be  exercised 
except  to  prevent  manifest  wrong  imminently  impending. 
And  when  the  court,  upon  the  coming  in  of  the  answer, 
discovers  that  the  danger  is  not  imminent,  and  that  there 
is  no  pressing  necessity  for  the  order,  it  may  be  revoked 
or  modified  on  such  terms  as  the  court  thinks  wise/'  We 
may  here  state  that  it  is  not  a  sufficient  cause  for  remov- 
ing a  receiver  of  a  judgment-debtor  that  he  has  employed 
the  debtor  as  an  agent  to  assist  in  collecting  the  assets, 
the  receiver  being  solvent  and  the  trust  otherwise  prop- 


1  First  Nat.  B'k  v.  E.  T.  Bamum  fern  v.  Butler,  18  N.  J.  Eq.  220  ;  Park- 
Wire  &  Iron  Works,  60  Mich.  499,  27  inson  v.  Trousdale,  4  111.  367 ;  Roberts 
N.  \V.  Rep.  657.  v.  Anderson,  2  Johns.  Ch.  (N.  Y.)202  ; 

-  High  on  Receivers,  £  826.  Harris  v.  Sangston.  4   Md.  Ch.  Dec. 

I  Lting  Hollister  v.   Barkley,  9  N.  394;   Kaighn  v.  Fuller,  14  N.  J.  Eq. 

II.    230;    Armstrong    v.    Sanford,    7  419;    Schoettier     v.    Schwarting,    17 

.Minn.  19;  Anderson  \.  Reed,  11  Iowa,  Wis.  30. 

177;  Stevens  v.  Myers,  11  Iowa,  183;  4  Citing  Voshell  v.  Hynson,  26  Md. 

Taylor    v.   Dickinson,    15    Iowa,   483;  83 ;  Drury  v.  Roberts,  2  Md.  Ch.  Dec. 

Hatch   v.    Daniels,   5  N.   J.   Eq.    14;  157. 

Washer  v.  Brown,  5  N.  .1.  Eq.  81  ;  Suf-  BCrawford  v.  Ross,  39  Ga.  49. 


§   191  ARREST   OF    DEFENDAN  1  . 

erly  executed.1  In  many  cases  the  debtor's  knowle 
of  the  business  peculiarly  qualifies  him  to  render  valu- 
able services  to  the  receiver.  And  the  receiver  should  be 
served  with  notice  and  a  specification  of  the  grounds  upon 
which  the  removal  is  sought.'  It  may  also  be  observed 
that  where  the  order  appointing-  a  receiver  was  fraudu- 
lently procured,  and  was  subsequently  annulled,  the 
receiver  will  be  required  to  account  for  the  fund  intact, 
and  will  not  be  allowed  any  deductions.3 

§  191.  Arrest  of  defendant.—  In  New  York,  to  authorize 
the  arrest  of  a  defendant  in  an  action  for  alleged  fraudu- 
lent disposition  of  his  property,  actual  intent  to  defraud 
must  be  clearly  established.4  Proof  must  be  adduced  of 
an  actual  and  guilty  intent  to  defraud  creditors.  A  mere 
constructive  fraud  such  as  the  law  implies  because  an  act 
is  done  in  violation  of  the  statute  or  of  the  rights  of  the 
creditors  at  common  law,  is  not  sufficient.5  Hence  an 
order  of  arrest  against  a  partner  who,  with  knowledge  of 
the  insolvency  of  the  firm,  paid  individual  debts  with  firm 
assets,  was  vacated.'5  Where  there  is  no  evidence  of 
guilty  knowledge,  the  debtor  should  not  be  subjected  to 
arrest  for  acts  of  constructive  fraud."  The  lex  fori,  as 
we  have  seen,8  governs  in  cases  involving  the  question  of 
the  right  of  arrest. 


1  Ross  v.  Bridge,  24  How.  Pr.(N.Y.)  S.  311,  11   S.    C.    Rep.   811;    Wolf  v. 

163.  Stix,  99  U.  S.  I  ;  Eennequin  v.  <  Hews, 

*  Bruns    v.    Stewart    Mfg.    Co.,    31  111   U.    S.    670,    4    S.    C.     Rep.    576; 

Hun  (N.  Y.)197  Upshur  v.  Briscoe,   138  O.  S    865,  11 

3  O'Mahoney  v.  Belmont,  37  N.  Y.  S.  C.  Rep.  313. 

Super.  Ct.  224.  s  Compare  Wilson  v.  Robertson,  21 

4Hoyt  v.  Godfrey,  88  N.  Y.  669.  N.   Y.  587  ;    Menagb  v.  Whitwell,  52 

5  Sherill  Roper  Air  Engine  Co.  v.  N.  Y.  146. 

Harwood,  30  Hun  (N.  Y.)  11.     Com-  '  Sherill   Roper  Air  Engine   Co.   v. 

pare  Neal    v.    Clark,   95  U.   S.    704.  Harwood     30    Bun   (N.   Y.  ■    11 

Noble  v.  Hammond,   129  U.  S.  65,  9  People  v.  Kelly,  35  Barb.  (N    5    1 444. 

S.  C.  Rep.  235  ;  Ames  v.  Moir,  138  LI.  8See  ?  64. 


CHAPTER  XIII. 


REIMBURSEMENT  AND    SUBROGATION. 


1 92.  Actual  and  constructive  fraud — 

Security  or    reimbursement 
of  purchaser. 

193.  No  reimbursement  at  law. 


§  194.  Void  in  part  void  in  toto. 
195  Subrogation    of     purchaser    to 
creditors'  lien. 


"  The  law  cares  very  little  what  a  fraudulent  party's  loss  may  be,  and  exacts  nothing  forhis 
sake."  —  Andrews,  J.,  in  Guckenheimer  v.  Angevine,  81  N.  Y.  397. 

§  192.  Actual  and  constructive  fraud  —  Security  or  reim- 
bursement of  purchaser. —There  is  a  plain  and  highly 
important  distinction  to  be  found  in  the  authorities 
between  actual  and  constructive  fraud  as  affecting-  the 
question  of  repayment  of  the  money  actually  advanced  by 
a  purchaser.  If  the  transaction  is  fraudulent  in  fact,  or 
tainted  with  moral  fraud,  it  cannot  stand  even  for  the 
purpose  of  reimbursement,1  or  indemnity  ;2  while  if  it  is 
only  constructively  fraudulent,3  it  may  be  upheld  in  favor 
of  the  vendee  or  purchaser  to  the  extent  of  securing  resti- 
tution of  the  amount  of  the  actual  consideration  given  or 
paid  by  him,  and  only  the  excess  of  the  property  after 
such  payment  was  made  will  be  subjected  to  the  creditor's 
debt.4     When  the  grantee  purchases  without  actual  notice 


Baldwin  v.  Short,  125  X.  V.  559, 
26  X    E.  Rep.  «.»28. 

Millington  v.  Hill,  47  Ark.  311  ; 
Davia  v.  Leopold,  87N.  V.  620;  Shep- 
herd v.  Woodfolk,  10B.  J.  Lea(Tenn.) 
598  :  Alley  v.  Connell,  ■)  Bead  (Tenn.) 
582  ;  Con. I,,  v.  Hall.  9'.'  Hun  (X.  V.) 
335,  :'.T  X.  Y.  Supp.  Ill  ;  Thompson  v. 
Bickford,  l9Minn  23  ;  Ulen  v.  Berry, 
50  Mo  90;  Borland  v.  Walker,  i  Ala. 
269 ;  Loos  v.  Wilkinson,  118  N.  V. 
L90,  21  X.  E.  Rep.  392  ;  W I  v.  Hunt. 


38  Barb.  (N.  Y.)  302  ;  Smith  v.  Wise, 
132  N.  Y.  172,  30  N.  E.  Rep.  229. 

3  Lobstein  v.  Lehn,  20  111.  App.  261. 
See  S.  c.  120  111.  549,  12  N.  E.  Rep. 
68  ;  Loos  v.  Wilkinson,  113  N.  Y.  491, 
21  X.  E.  Rep.  392. 

4  Wood  v.  Goffs  Curator,  7  Bush 
(Ky.)  63;  Short  v.  Tinsley,  1  Met. 
(Ky.)  398;  Crawford  v.  Beard,  12 
Ore.  458,  8  Pac.  Rep.  .737  ;  Lobstein 
v.  Lehn,  120  111.  777  12  N.E.  Rep.  68  ; 
Cone   v.    Cross,   72  Md.  102,   19  Atl. 


§192 


A.CTUAL    WD   CONSTRUC  l'I\ T.    FRAUD. 


341 


of  the  fraud,  but  for  a  consideration  which  is  so  inadequate 
that  it  would  be  inequitable  to  allow  the  deed  to  stand  as 
a  conveyance,  a  court  of  equity  may,  upon  appropriate 
allegations  and  proof,  give  it  effect  as  a  security  for  the 
consideration  actually  paid.1  And  in  cases  of  mere  sus- 
picious circumstances  as  to  the  adequacy  of  the  consid- 
eration and  fairness  of  the  transaction,  the  court  will  not 
entirely  annul  the  conveyance,  but,  on  the  contrary,  will  so 
frame  its  judgment  as  to  protect  the  purchaser  to  the 
amount  of  the  money  advanced.2  Again,  where  strangers 
to  the  fraud  paid  off  valid  incumbrances  upon  the  property, 
they  are  held  entitled  to  be  reimbursed,  and  to  be  pro- 
vided for  in  the  decree,  before  the  complainant's  claim  is 
satisfied.3  Where  the  bill  in  equity  contains  no  offer  to 
restore  the  purchase-money,  the  court  may  extend  the 
relief  conditional  upon  such  repayment.4 

The  rule  is  laid  down  by  Chancellor  Kent  in  the  great 
and  leading  case  of  Boyd  v.  Dunlap,5  that  a  deed,  fraudu- 


Rep.  391.  It  is  not  necessary  to  offer 
in  the  bill  to  repay  the  consideration  ; 
the  court  niay  make  such  repayment 
a  condition  for  granting  the  relief. 
Thomas  v.  Beals,  154  Mass.  51,  27  N. 
E.  Rep.  1004. 

1  Van  Wyck  v.  Baker,  16  Hun  (N. 
Y.)  171.  See  Clements  v.  Moore,  6 
Wall.  312  ;  McArthur  v.  Hoystradt,  11 
Paige  (N.  Y.)  495;  Hull  v.  Deering,  80 
Md,  424,  31  Atl.  Rep.  416.  In  Colgan 
v.  Jones,'  44  N.  J.  Eq.  274,  18  Atl. 
Rep.  55,  it  appeared  that  a  debtor 
who  had  sustained  personal  injuries 
assigned  his  claim  for  $330  to  his 
attorney,  who  recovered  thereon  a 
judgment  of  $4,000.  It  was  decided 
that  the  assignment  as  to  the  excess 
beyond  a  reasonable  compensation  to 
the  attorney  for  his  services  was  void- 
able as  to  the  debtor's  antecedent 
creditors. 

2  United  States  v.  Griswold,  8  Fed. 


Rep.  504,  citing  Boyd    v.   Dunlap.    1 
Johns.  Ch.  (N.  Y.)  478;  Crockett  v. 
Pliinney,  33  Minn.  L57,  32  X.  W.  Rep. 
292.     See  Taylor  v.  Atwood,  47  Conn. 
508  ;  Oliver  v.  Moore,  26  Ohi<  1  St .  398  . 
First  Nat.  Bank  v.  Bertschy,  52  Wis. 
443,  9  N.  W.  Rep.  534  ;  May  on  Fraud- 
ulent Conveyances,  p.  235.    In  Borden 
v.  Doughty,   42  N.  J.  Eq.  314,  3    Ml 
Rep.    352,     a    wife    was    allowed    to 
recover  for    improvements  made    in 
good  faith  where  a  deed  to  her  was 
set  aside  as  being  in  effect  voluntary 
See  Rucker  v.  Abell,  8  B.  Mon.  (Ky. 
566;  King  v.  Wilcox,  II  Paige    X   Y. 
589. 

b Swan  v.  Smith,  57  Miss.  548 
Young  v.  Ward.  115  III.  264,  3  X.  E 
Rep.  512. 

4  Thomas  v.  Beals,  151   Mass,  51    31 
N.  E.  Rep.  1004. 

1  Johns.  Ch.   (N.  Y)  41 


342  ACTUAL   AND   CONSTRUCTIVE   FRAUD.  §  192 

lent  in  fact,  will  be  declared  absolutely  void,  and  not  permit- 
ted to  stand  as  a  security  for  any  reimbursement  or  indem- 
nity, and  this  principle  is  upheld  and  followed  in  many 
cases.1  Thus  in  Shand  v.  Hanley,3  the  vendee  was  not 
allowed  to  absorb  the  value  of  the  premises  in  a  claim  for 
improvements  made  after  constructive  notice  to  her  of  the 
insecurity  of  her  title,  and  of  the  equitable  lien  of  the  cred- 
itor. In  Briggs  v.  Merrill,8  Johnson,  J.,  said:  A  party 
bargaining  with  a  debtor  with  fraudulent  intent,  "  does  it 
at  the  peril  of  having  that  which  he  receives  taken  from 
him  by  the  creditors  of  the  debtor  whom  he  is  attempting 
to  defraud,  without  having  any  remedy  to  recover  what 
he  parts  with  in  carrying  out  the  bargain.4  The  learned 
judge  adds  :  "  The  law  will  leave  him  in  the  snare  his 
own  devices  have  laid."  The  court,  in  Stovall  v. 
Farmers'  and  Merchants'  Bank,5  said  that  there  was  no 
rule  which  gave  a  lien  under  a  fraudulent  contract. 
Every  person  who  enters  into  a  fraudulent  scheme  for- 
feits all  right  to  protection  at  law  or  in  equity.  The  law 
does  not  so  far  countenance  fraudulent  contracts  as  to 
protect  the  perpetrator  to  the  extent  of  his  investment. 
This  would  be  holding  out  inducements  to  engage  in 
schemes  of  fraud,  as  nothing  could  be  lost  by  a  failure 
to  effectuate  the  entire  plan.  Judge  Spencer  said  he 
presumed  there  was  "  no  instance  to  be  met  with  of  any 
reimbursement  or  indemnity  afforded  by  a  court  of  chan- 


1  See  Davis  v.    Leopold,    87  N.  Y.  Rep.  392;  Baldwin  v.  Short,  54  Hun 

620;  Union  Nat.  Bank  v.  Warner,  12  (N.  Y.)  473,  7  N.  Y.  Supp  717,affi'd  125 

linn  (N.  Y.)  306;  Wood  v.  Hunt,  38  N.  Y.  553,  26  N.  E.  Rep.  928;  Mande- 

Barb.  (N.   Y.)  302  ;  Briggs  v.  Merrill,  ville  v.  Avery,  124  N.  Y.  387,  26  N.  E. 

58   Barb.   (N.  Y.)  389;  Alley  v.  Con-  Rep.  951. 

nell.  3  Head  (Tenn.)  582  ;  Shepherd  v.  71  N.  Y.  323. 

Woodfolk,  10  B.  J.  Lea  (Tenn.)  598;  3  58  Barb.  (N.  Y.)  389. 

Millington   v.  Hill,  47  Ark.  311,  1  S.  4  Union    Nat.    Bk.    v.   Warner,    12 

W.    Rep.  547;  Beidler   v.  Crane,  135  Hun  (N.  Y.)  306. 

111.    92,    25  N.   E.  Rep.    655;    Loos  v.  16  Miss.  316. 
Wilkinson,   113    N.  Y.    490,  21    N.  E. 


§  192  ACTUAL   AND    CONSTRUCTIVE    FRAUD. 

eery  to  a  particeps  criminis  in  a  case  of  positive  fraud."1 
And  Judge  Story  remarked,  in  Bean  v.  Smith  :8  "  I  agree 
to  the  doctrine  laid  down  by  Chancellor  Kent  in  Boyd  v. 
Dunlap3  and  Sands  v.  Codwise,4  that  a  deed  fraudulent 
in  fact  is  absolutely  void,  and  is  not  permitted  to  stand 
as  a  security  for  any  purpose  of  reimbursement  or 
indemnity;  but  it  is  otherwise  with  a  deed  obtained  under 
suspicious  or  inequitable  circumstances,  or  which  is  only 
constructively  fraudulent."5  "The  loss  of  the  amount 
paid  by  a  fraudulent  grantee  is  the  penalty  that  the  law 
inflicts  for  the  fraudulent  transaction.  To  refund  to 
such  a  grantee  the  amount  he  has  paid  would  be  to 
destroy  the  penalty."  6  But  while  the  court  will  not  pro- 
tect the  participant  in  a  fraud,  it  will  not  hold  him  liable 
beyond  the  actual  interest  which  the  debtor  had  in  the 
property.  So,  it  was  held,  that  where  stock  was  fraudu- 
lently transferred,  which  was  hypothecated  for  a  valid 
debt,  the  grantee  was  to  be  held  liable  only  for  the  sur- 
plus remaining,  not  for  the  nominal  amount  of  the  stock.7 
So  disbursements  for  the  benefit  of  the  creditors  will  be 
allowed.8  In  Baldwin  v.  June,9  it  was  held  that  the 
grantee  was  entitled  to  be  credited  with  the  value  of  the 
property  given  in  exchange  for  the  property  fraudulently 
conveyed  to  him.     The  court  cannot  punish  the  fraudu- 

1  Sands  v.  Codwise,  4  Johns.  (N.  court  says:  "The  mortgage  being 
Y.)  598.  Compare  note  to  Lore  v.  void,  all  proceedings  under  it  were 
Dierkes,  16  Abb.  N.  C.  (N.  Y.)  47.  void,  and  although  he  may  posses-  an 

2  2  Mason,  296.  honest  claim,  he  cannot  retain  prop- 

3  1  Johns.  Ch.  (N.  Y.)  478  ;  but  see  erty  obtained  by  him  under  a  fraudu- 
Meigs  v.  Weller,  90  Mich.  629,  51  N.  lent  mortgage  against  a  pursuing 
W.  Rep.  681.  creditor."      See   Wcll>    \.    Langbein, 

4  4  Johns.  (N.  Y.)  549.  20  Fed.  Rep.  183. 

5  See  Henderson  v.  Hunton,  26  '  Hamilton  Nat.  Bank  v.  Balsted, 
Gratt.  (Va.)  935  ;  Coiron  v.  Millaudon,  134  N.  Y.  520,  31  N.  E.  Rep.  '.mid. 

19  How.   115;  Brown  v.  Chubb,  135         8  Loos   v.  Wilkinson,  118  N.  Y.  185, 

N.  Y.  174,  31  N.  E.  Rep.  1030.  21  N.  E.  Rep.  392. 

6  See  Seivers  v.  Dickover,  101  Ind.  fl  68  Hun  (N.  Y  |  284,  32  N.  Y. 
495,   498.      In    Mandeville   v.    Avery  Supp.  852. 

(124  N.  Y.  387,  26  N.  E.  Rep.  951),  the 


344  ACTUAL   AND   CONSTRUCTIVE   FRAUD.  §  1 92 

lent  vendee  by  ordering  judgment  in  excess  of  the  value 
of  the  interest  transferred.1 

It  may  be  here  observed  that  there  seems  to  be  author- 
ity for  the  proposition  that  loss  resulting  from  depreciation 
may  be  apportioned  between  the  debtor  and  the  grantee, 
according  to  the  sums  respectively  invested,2  when  the 
conveyance  is  attacked  by  creditors.  Thus  in  Shaeffer  v. 
Fithian,3  an  insolvent  purchased  real  estate  for  his  wife 
taking  the  title  in  her  name,  and  advancing  $2,460  of  the 
consideration,  the  wife  paying  the  balance  of  $4,000. 
The  court  ordered  a  sale  of  the  property,  and  directed 
that  twenty-four-hundred-and-sixty  sixty-four-hundred-and- 
sixtieths  of  the  proceeds  of  sale  be  applied  in  payment 
of  the  complainant's  debt.  The  court,  after  observing 
that  they  could  see  no  error  in  this  decree  to  the  preju- 
dice of  the  wife,  said :  "  She  might  well  have  been 
regarded  as  the  sole  owner  of  the  property,  and  the 
quasi  debtor  of  her  husband.  As  such,  she  would  be 
bound  to  bear  the  whole  loss  arising  from  depreciation 
of  the  property.  The  court  below  seems,  however,  to 
have  considered  the  husband's  interest  as  a  kind  of  result- 
ing trust  in  the  property,  making  him  in  equity  a  tenant 
in  common.  This  was  certainly  the  most  favorable  view 
in  behalf  of  the  wife  that  could  have  been  taken  of  the 
case.  It  results  in  saddling  the  loss  arising  from  depre- 
ciation pro  rata  upon  both  parties."  In  Karstorp's 
Estate,4  the  debtor  and  his  wife  had  both  contributed 
toward  the  purchase  of  the  property  about  to  be  sold, 
and  the  relief  extended  to  the  husband's  creditor  was 
limited  to  the  amount  contributed  by  the  debtor  toward 
the  purchase  with  interest.  The  Supreme  Court  of  Mis- 
souri say,  in   Alien  v.  Berry,5   that  there  is  no  principle 


1  Hiiiiiiltoii    Nat.    Bk.    v.    Halsted,         3  26  Ohio  St.  282. 
i:,l  N.  Y.  520,  31  N.  E.  Hep.  900.  «  158  Pa.  St.  30,  27  Atl.  Rep.  739. 

Shaeffer  v.  Fithian,  26  Ohio  St.  282.  6  50  Mo.  91. 


§  193  N0    REIMBURSEMENT   AT    LAW.  345 

of  equity  which  allows  a  fraudulent  grantee  to  offset 
against  the  value  of  the  property  the  amount  he  may 
have  paid  for  it.  "The  fraud,"  observes  Adams,  [., 
"  renders  the  deeds  absolutely  void  as  to  creditors,  and 
the  plaintiff,  who  was  a  creditor,  and  as  such  became  the 
purchaser,  is  entitled  to  recover  the  property  and  its 
rents,  etc.,  as  though  no  such  fraudulent  deeds  ever  had 
been  made."  Allowing  the  vendee  to  recover  back  the 
money  would  be  in  effect  repaying  him  the  amount  which 
he  expended  in  accomplishing  the  very  thing  which  the 
law  prohibits  and  condemns.  As  it  was  a  wrong  in  him 
to  obtain  the  title  and  the  possession  for  a  fraudulent 
purpose,  it  must  be  equally  wrong  to  refund  to  him  the 
price  paid  for  it.1  But  where  a  mortgagor  conveyed  to 
the  mortgagee  in  payment  of  the  mortgage,  and  the  con- 
veyance was  set  aside,  it  was  considered  that  the  mort- 
gage was  in  force  as  to  the  creditors.3  In  part,  the 
theory  of  not  allowing  the  fraudulent  grantee  any  relief 
for  partial  consideration  or  necessary  outlay,  as  regards 
the  avoided  transaction,  is  that  the  rights  of  creditors 
would  be  impaired  by  such  allowance.  Creditors  might 
have  seized  the  property  intact  but  for  the  wrongful 
alienation.  But  equity  sometimes  hesitates,  and,  in  its 
desire  to  do  equity,  evinces  an  inclination  to  allow  the 
alienee  for  any  consideration  or  outlays  which  the  cred- 
itors could  not  have  escaped  paying.3 

§  193.  No  reimbursement  at  law.  —  While  a  court  of 
equity,  in  setting  aside  a  deed  of  a  purchaser  upon 
grounds   other  than   those   of   positive   fraud,   annuls    it 

'McLean    v.    Letchford,    60    Miss.  520,    31   N.    E.    Rep.    900.      Compare 

183.  Loos  v.  Wilkinson,  113  X.  Y.    485,  31 

2  Irish  v.  Clayes,  10  Vt.  81.  N.  E.  Rep.  392  ;  Stevens  v.   Brennan, 

3  See  Baldwin  v.  June,  68  Hun  (N.  79  N.  Y.  254;  Clift  v.  Moses,  75  Bun 
Y.)  286,22  N.  Y.  Supp.  852;  Hamil-  (N.  Y.)    520,    27    N.    Y.    Supp. 

ton  Nat.  Bk.  v.   Halsted,  134  N.  Y.      Clements  v.  Moore,  6  Wall.  312. 


346 


NO    REIMBURSEMENT   AT   LAW. 


T93 


upon  terms,  and  requires  a  return  of  the  purchase-money, 
or  directs  that  the  conveyance  stand  as  a  security  for  its 
repayment,  this  principle  has  no  place  as  applied  to  an 
action  at  law.  This  constitutes  one  of  the  essential  dif- 
ferences already  discussed1  between  relief  in  equity  and 
the  judgment  extended  by  a  court  of  law.  The  latter 
court,  as  we  have  said,  can  hold  no  middle  course.  The 
entire  claim  of  each  party  must  rest  and  be  determined 
at  law  upon  the  single  point  as  to  the  validity  of  the 
deed  ;  but  it  is  the  ordinary  case  in  the  former  court  to 
decree  that  a  deed  not  absolutely  void,  yet,  under  the 
circumstances,  inequitable  as  between  the  parties,  may  be 
set  aside  upon  terms.2 


1  See  Chapter  III.  S£  51,  60  ;  Foster 
v.  Foster,  56  Vt.  540. 

-  Coiron  v.  Millaudon,  19  How.  115. 
See  Clark  v.  Krause,  2  Mackey  (D.  C.) 
574 ;  Drury  v.  Cross,  7  Wall.  299 ; 
Worthington  v.  Bullitt,  6  Md.  172. 

Flexible  jurisdiction  of  equity.  —  In 
Clements  v.  Moore,  6  Wall.  312,  a  case 
which  we  have  frequently  quoted  and 
cited,  the  court  said  :  "  A  sale  may  be 
void  for  bad  faith,  though  the  buyer 
pays  the  full  value  of  the  property 
bought.  This  is  the  consequence, 
where  his  purpose  is  to  aid  the  seller 
in  perpetrating  a  fraud  upon  his  cred- 
itors, and  where  he  buys  recklessly, 
with  guilty  knowledge.  When  the 
fact  of  fraud  is  established  in  a  suit 
;it  law,  the  buyer  loses  the  property 
without  reference  to  the  amount  or 
application  of  what  he  has  paid,  and 
he  can  have  no  relief  either  at  law  or 
in  equity.  When  the  proceeding  is 
in  chancery,  the  jurisdiction  exercised 
L8  more  flexible  and  tolerant.  The 
equity  appealed  to,  while  it  scans  the 
transaction  with  the  severest  scrutiny, 
looks  at  all  the  facts,  and  giving  to 
each  one  its  due  weight,  deals  with 
the  subject  before  it  according  to  its 


own  ideas  of  right  and  justice.  In 
some  instances,  it  visits  the  buyer 
with  the  same  consequences  which 
would  have  followed  in  an  action  at 
law.  In  others,  it  allows  a  security 
to  stand  for  the  amount  advanced 
upon  it.  In  others,  it  compels  the 
buyer  to  account  only  for  the  differ- 
ence between  the  under  price  which 
he  paid  and  the  value  of  the  property. 
In  others,  although  he  may  have  paid 
the  full  value,  and  the  property  may 
have  passed  beyond  the  reach  of  the 
process  of  the  court,  it  regards  him  as 
a  trustee,  and  charges  him  accord- 
ingly. Where  he  has  honestly  ap- 
plied the  property  to  the  liabilities  of 
the  seller,  it  may  hold  him  excused 
from  further  responsibility.  TJie  car- 
dinal principle  in  all  such  cases  is, 
thai  Hi*  property  of  the  debtor  shall 
not  be  diverted  from  the  payment  of 
his  debts  to  the  injury  of  his  creditors. 
by  means  of  I  In'  fraud."  See  Tomp- 
kins v.  Sprout,  55  Cal.  36;  Clif t  v. 
Moses,  75  Hun  (  X.  Y.  |  520.  A  grantee 
may  be  allowed  for  improvements. 
King  v.  Wilcox,  11  Paige  (N.  Y.)  589  ; 
see  Sliand  v.  Hanley,  71  N.  Y.  319, 
and    the    amount    of    incumbrances 


§  194  VOID    IN    PART   VOID    IN    TOTO. 

§  194.  Void  in  part  void  in  toto.  — As  a  general  rule,  a 
transaction  void  in  part  for  any  cause  is  entirely  void.1 
Russell  v.  Winne'~  is  an  illustration  of  our  meaning.  In 
that  case  the  question  presented  was  whether  a  mortgage 
which  was  fraudulent  against  creditors  as  to  a  part  of 
the  property  mortgaged,  could  be  upheld  as  to  the 
residue.  The  court  decided  that  as  the  mortgage  was  a 
single  instrument,  given  to  secure  one  debt,  to  render  it 
valid  it  must  have  been  given  in  good  faith,  for  the 
honest  purpose  of  securing  the  debt,  and  without  any 
intent  to  hinder  or  defraud  creditors.  Grover,  J.,  con- 
tinuing, said:  "This  cannot  be  true  when  the  object,  in 
part,  or  as  to  part  of  the  property,  is  to  defraud  creditors. 
This  unlawful  design  vitiates  the  entire  instrument.  The 
unlawful  design  of  the  parties  cannot  be  confined  to  one 
particular  parcel  of  the  property.  Entire  honesty  and 
good  faith  is  necessary  to  render  it  valid  ;  and  whenever 
it  indisputably  appears  that  one  object  was  to  defraud 
creditors  to  any  extent,  the  entire  instrument  is,  in  judg- 
ment of  law,  void."3  It  is  different  where  the  instru- 
ment is  given  to  secure  separate  debts,  some  of  which 
are  valid,  and  others  fraudulent.  In  that  case  it  will  be 
sustained  as  to  the  former.4     The  rule,  as  we  have  seen, 


satisfied   by   the   vendee  may   be  al-  win  v.  Short.  125  X.  Y.  553,  26   N.  E. 

lowed.     Potter  v.  Gracie,  58  Ala.  303.  Rep.  928. 

So,  when  a  conveyance  is  annulled,  a         -  37  N.  Y.  591,  596.     See  Showman 

mortgage  in  favor  of  a  trust  may  be  v.  Lee,  86  Mich.  560,  49  N.  W.    Rep, 

validated.     First  Nat.   Bank  v.  Cum-  578. 

mins,   39   N.   J.    Eq.   577.      Compare         $  Baldwin  v.  Short,   125   N.  J 

Murphy  v.  Briggs,  89  N   Y.  446.  26  N.  E.  Rep.  928. 

'National    Bank    v.  Barkalow,  53         4  Rider  v.  Hunt,  6  Tex.  Civ.    *.pp 

Kan.   68,35  Pac.   Rep.  796;  Bank  v.  238,25  S.    W.    Hep-  314.     See  Morris 

Brier,  95  Tenn.  331,  32  S.   W.   Rep.  v.  Lindauer,  4  C.  C.  A    163,   VI    Fed. 

205;  State  v.  Hope.  102  Mo.  410,  14  S.  Rep.   23;  Ruffner   v.  Welton  Coal  .V 

W.  Rep.  985 ;  Brasher  v.  Jamison,  75  S.    Co.,    36    W.    Va.    244,     I  ■">    S     E. 

Tex.  140,  12  S.  W.  Rep.  809;  Roberts  Rep.  48;  Gordon  v.  Cannon,  18  Gratl 

v.  Vietor,  130  N.  Y.  600,  29  N.  E.  Rep.  (Va.)   423  ;  Riggan  v.  Wolf,   58    \rk 

1025  ;  Hangen  v.   Hachemeister,  114  538,  14  S.  W.  Rep.  922    Teffl  v.  Stern, 

N.  Y.  570,  21  N.  E.  Rep.  1046 ;  Bald-  73  Fed.  Rep.  591. 


348  SUBROGATION   OF   PURCHASER.  §  IQ5 

applies  only  where  there  is  actual  fraud.  In  cases  where 
the  fraud  is  constructive  only,  the  court  will  uphold  the 
valid  provisions  of  the  instrument,  if  it  can  be  done  with- 
out defeating  the  general  intent.1 

§  195.  Subrogation  of  purchaser  to  creditors'  lien. —  The 
doctrine  of  subrogation  is  founded  upon  principles  of 
equity  and  benevolence,  and  it  may  be  decreed  where  no 
contract  or  privity  of  any  kind  exists  between  the  parties.2 
The  rieht  of  subrogation  is  not  founded  on  contract.  It 
is  a  creature  of  equity  ;  is  enforced  solely  for  the  purpose 
of  accomplishing  the  ends  of  substantial  justice  ;  and  is 
independent  of  any  contractual  relations  between  the  par- 
ties.3 In  Lidderdale  v.  Robinson,4  Chief-Justice  Mar- 
shall said  :  "  Where  a  person  has  paid  money  for  which 
others  were  responsible,  the  equitable  claim  which  such 
payment  gives  him  on  those  who  were  so  responsible,  shall 
be  clothed  with  the  legal  garb  with  which  the  contract  he 
has  discharged  was  invested,  and  he  shall  be  substituted, 
to  every  equitable  intent  and  purpose,  in  the  place  of  the 
creditor  whose  claim  he  has  discharged."5  It  may  be 
noted  that  the  party  seeking  subrogation  must  come  into 


1  Peters  v.  Bain,  133  U.  S.  670,  10  the  principal  debtor  has  given  to  his 

S.  C.  Rep.  354  ;  Hayes  v.  Westcott,  91  surety,  endorser  or  guaran tor  any  por- 

Ala.   143.  8  So.  Rep.  337 ;  Cunning-  tion  of    his    estate    as    a    protection 

ham  v.  Norton,  125  U.  S.  77,  8  S.  C.  against  liability,  and  both  become  in- 

Rep.  804  ;  Muller  v.  Norton,  132  U.  S.  solvent,  the  creditor  is  entitled  to  be 

501,  10  S.  C.  Rep.  147.  subrogated    to    the    rights    of    such 

'  Cottrell's  Appeal,    23  Pa.  St.  294.  surety,   guarantor  or   endorser,   and 

Compare  Graff's  Estate,  139  Pa.  St.  to   claim  directly,    and   not   through 

70,    21   Atl.  Rep.  233  :   Pease  v.  Egan,  the    representative    of    such    surety, 

L31  N.  Y.  272,  30  N.  E.  Rep.  102.  guarantor  or  endorser,  tbe  application 

;  Memphis,    &    L.    R.    R.  v.    Dow,  to   the  discharge  of  his  claim  of  all 

120  U.  S.  301,  7  S.  C.  Rep.  482;  Pease  such  assets."     Whittaker  v.  Amwell 

v.  Egan,  131  N.  Y.  272,  30  N.  E.  Rep.  Nat.   Bank.  52  N.  J.  Eq.  418,  20  Atl. 

102.     See  Gans  v.   Thieme,  93  N.  Y.  Rep.  203 ;  New  Bedford  Inst,  for  Sav- 

225.  ings      v.    Fairhaven     Bk.,     9     Allen 

*  2  Brock.  168.     See  Pease  v.  Egan,  (Mass.)   175;    Aldrich  v.    Blake,    134 

131  N.  Y.  272,  30  N.  E.  Rep.  102.  Mass.  585. 
"It  is  also  safe  to  say  that  when 


§  195  SURROGATION   OF   PURCHASER.  ;.,,, 

court  with  clean  hands.1  The  court  will  not  protect  a 
fraudulent  party  from  loss.3  This  doctrine  of  subrogation 
is  frequently  invoked  in  cases  where  fraudulent  convey- 
ances are  annulled.  Thus,  in  Selleck  v.  Phelps,'3  it  was 
said  that  a  person  who  acquired  the  title  to  property  under 
circumstances  which  enabled  the  creditors  of  the  vendor 
to  avoid  the  sale,  whether  he  be  a  purchaser  or  a  volun- 
tary grantee,  would,  after  the  payment  of  the  claims  of 
attaching  creditors,  be  subrogated  to  their  rights  so  as  to 
enable  him  to  hold  the  property  against  subsequent 
attachments.4  Where  goods  were  fraudulently  conveyed, 
but  promptly  seized  by  the  creditors,  and  sold  by  them, 
it  was  held  that  the  fraudulent  vendee  should  not  be 
charged  a  greater  sum  than  was  realized  upon  the  sale, 
and  that  he  was  entitled  to  a  lien  upon  the  proceeds  of 
sale  for  the  amount  of  a  bona  fide  debt  paid  by  the  debtor 
out  of  the  price  given  by  the  vendee.5  The  right  of  sub- 
rogation was  recognized  in  Cole  v.  Malcolm.0  It  appeared 
that  one  Crawford  conveyed  real  estate  to  his  wife  with 
intent  to  defraud  creditors  Subsequently  his  wife  died 
intestate  and  her  heirs  assigned  the  property  to  the 
defendant.  One  of  Crawford's  creditors  then  entered  a 
judgment  against  him,  and  subsequently  secured  a  decree 
setting:  aside  the  convevance.  The  defendant  then 
tendered  the  judgment-creditor  the  amount  due  him   and 


1  Wilkinson  v.  Babbitt,  4  Dili.  207:  4  See  Sheldonon  Subrogation,  .     I". 

Railroad  Co.  v.  Soutter,  13  Wall.  517  ;  Compare  Acker  v.  White,  35  Wend. 

Griffith  v.  Townley,  69  Mo.  13.     The  (N.  Y.)  614  ;  Tompkins   v.  Sprout,  55 

doctrine  of  equitable  subrogation  will  Cal.   31;  Merrell  v.   Johnson.    96   111. 

not  be  applied  to  relieve  a  party  from  224. 

a  loss  occasioned  by  his  own  unlaw-  5  Flash  v.  Wilkerson,  20  Fed.  Rep. 

ful  act.     Guckenheimer  v.  Angevine,  257.    Compare  note  i>>  Lore  v.  Dierkes, 

81  N.  Y.  394;   Kley  v.   Healy,   127  N.  16  Abb.  N.  C.  (N.  Y.)  17. 

Y.  561,  28  N.  E.  Rep.  593.  6  66  N.  Y.  363  :  overruling  the  court 

"  Guckenheimer    v.    Angevine,    81  below,  7  Hun  (N.  Y.)  31.    See  Pease  ^ 

N.  Y.  394;  Masson  v.  Bovet,   1  Denio  Egan,  131    N.   Y.    262,    ::<»   N.  E.  Rep. 

(N.  Y.)  74.  102. 

3  11  Wis.  380. 


350  SUBROGATION    OF    PURCHASER.  §   I95 

demanded  an  assignment  of  the  judgment  against  Craw- 
ford. The  court  held  that,  under  such  circumstances, 
upon  payment  of  the  judgment,  which  he  was  obliged  to 
satisfy  in  order  to  save  his  land  from  sale,  the  principles 
of  justice  and  equity  required  that  he  should  be  subro- 
gated to  all  the  rights  and  securities  of  the  judgment- 
creditor,  especially  as  the  latter  had,  when  his  judgments 
were  paid,  secured  everything  to  which  he  was  entitled.1 
So  then,  again,  the  tendency  of  the  court  to  prevent  a 
merger  where  injustice  would  result,  has  been  applied  to 
cases  of  this  character.  Thus,  in  Crosby  v.  Taylor,2  it 
appeared  that  a  grantee  of  land  held  it  by  a  deed  which 
was  fraudulent  as  against  the  grantor's  creditors.  By  a 
subsequent  deed  the  grantee  secured  from  a  prior  mort- 
gagee a  deed  of  quitclaim  of  all  the  latter's  interest  in 
the  premises,  containing  this  clause,  "which  said  mort- 
gage is  hereby  canceled  and  discharged."  The  court  held 
that  the  deed  constituted  an  assignment  of  the  mortgage, 
and  did  not  operate  by  way  of  merger  of  it  as  against  the 
grantor's  creditors. 

A  fraudulent  vendee  may  create  a  valid  lien  upon  the 
property  in  favor  of  a  mortgagee  in  good  faith.3 


1  See  Snelling   v.  Mclntyre,  6  Abb.  N.  J.  Eq.  577;  Munoz    v.  Wilson,  111 

N.  C.  (N.  Y.)  471.     Compare  Robin  N.  Y.  305,  18  N.  E.  Rep.  855;  Royer 

son  v.  Stewart,  10  N.  Y.  190.  Wheel  Co.  v.  Frost,  13  Daly  (N.  Y.) 

8 15  Gray  (Mass.)  64.  233  ;  Martin  v.  Bowen,  51   N.  J.   Eq. 

Murphy    v.  Briggs,  89  N.  Y.  446;  464,  26  Atl.  Rep.  823. 
First    National  Bank  v.  Cummins,  39 


CHAPTER  XIV. 

INTENTION. 

§196.  What  is  intention?  S  201.  Of  intention   vsrhere  considera- 

197.  Actual  intent  not  decisive.  tion  is  adequate. 


198.  Fraud  of   agent   binding    upon 

principal. 

199.  Mutuality   of    participation    in 

fraudulent  intent. 


202.  Intention  to  defraud  subsequenl 

creditors. 

203.  When    question    of    intenl    res 

ad  judicata. 


200.  Intent  affecting  voluntary  alien- 1     204.  Intent  a  question  for  the  jury. 
ations.  2Q~).  Testifying  as  to  intent. 

206.  Proving  intent. 

"  The  intent  is  seldom  disclosed  on  the  face  of  the  transaction."  —  Andrews,  Ch.  J.,  in  Beuerlitn 
v.  O'Leary,  149  N.  Y.  38,  43  N.  E.  Rep.  417. 

"The  vital  question  is  always  the  good  faith  of  the  transaction."  Mr.  Justice  Swayne  in 
Lloyd  v.  Fulton,  91  U.  S.  485. 

"  The  mental  emotion  is  inferred  from  the  facts."  -   Finch,  J.,  in  Higgins  v.  Crouse,  147  X.  Y 
415,  42  N.  E.  Rep.  6. 

"  Where  there  is  an  actual  intent  to  defraud,  no  form  in  which  the  transaction  is  put  can  shield 
the  property  so  transferred  from  the  claims  of  creditors."  —  Chief  Judge  Ruger  in  Hillings  v. 
Russell,  101  N.  Y.  226,  234. 

§  196.  What  is  intention? — Further  time  cannot  be 
devoted  to  the  discussion  of  the  practical  details  of  pro- 
cedure in  creditors'  suits  and  proceedings.  Let  us  n< 
direct  attention  to  a  more  complete  consideration  of  the 
general  principles  and  theories  of  law  which  these  various 
remedies  are  devised  to  render  effectual  under  the  statute 
of  Elizabeth.  The  rules  of  evidence  commonly  invoked 
in  these  proceedings  which,  as  will  appear,  constitute  a 
most  important  branch  of  the  subject,  will  then  be  noticed 
in  a  very  general  way. 

First,  what  is  the  fraudulent  intent  under  the  statute 
of  Elizabeth  which  must  ordinarily  exist,  and  be  found 
as  a  fact,1  to  enable  a  creditor  to  defeat  the  debtor's 
alienation?2      Sutherland,  J.,  in    Babcock   v.    Eckler, 


1  Sickman  v.  Wilhelrn,  130  Ind.  481,     See  Knox   v.  Moses,  104  Cal.  502 
29  N.  E.  Rep.  908.  Pac.  Eep.  318. 

2  Harrnan  v.  Hoskins,  56  Miss.  142.  ::2I    N\  Y.   632.      S.    P.,    Snyder   v. 

Free,  114  Mo.  376,  21  8.  W.  Re] 


352  WHAT   IS   INTENTION.  §   196 

case  already  cited,  used  these  words:  "Intent  or  inten- 
tion is  an  emotion  or  operation  of  the  mind,  and  can 
usually  be  shown  only  by  acts  or  declarations  ;  and,  as 
acts  speak  louder  than  words,  if  a  party  does  an  act  which 
must  defraud  another,  his  declaring  that  he  did  not  by 
the  act  intend  to  defraud  is  weighed  down  by  the  evi- 
dence of  his  own  act."  1  Fraud,  it  must  be  noted,  does 
not  consist  in  mere  intention,  but  in  intention  acted  out, 
or  made  effectual  by  hurtful  acts,2  in  conduct  that  operates 
prejudicially  upon  the  rights  of  others,  and  which  was  so 
intended.3  A  fraudulent  purpose  is  an  important  ele- 
ment in  the  case,  but  it  is  not  the  only  essential  requisite ; 
there  must  be  superadded  to  it,  besides  the  sale  or  trans- 
fer, actual  fraud,  hindrance,  or  delay  resulting  therefrom 
to  the  creditors.4  While  it  may  possibly  be  true  that  the 
impressions,  emotions,  or  operations  of  the  mind  are 
never  effaced,  yet  they  can  be  reproduced  only  by  the 
person  whose  mind  gave  them  birth.  Their  true  nature 
can  only  be  determined  or  guessed  at  by  other  persons 
from  the  color  of  the  outward  acts  which  the  emotions 
inspired ;     from     their     nature,     connection     and     effect.5 


1  See  Newman  v.  Cordell,  43   Barb.  erty  so  transferred  from  the  claims  of 

(N.  Y.i  156;    Monteith  v.  Bax,  4  Neb.  creditors,  even  though  a  full  and  ade- 

171  ;  Snyder  v.  Free,  114  Mo.  361,  21  quate  consideration   be  received   for 

S.    W.   Rep.    847;    Booth   v.    Carstar-  the  same."      Billings  v.  Russell,    101 

phen,  107  X.  ('.  395,  12  S.  E.  Rep.  375.  N.  Y.  226,   234,  4  N.  E.  Rep.  531.     In 

2See§   i:s.     Learned,  P.  J.,  said  in  People  v.  Cook,  8  N.  Y.  67, 79,  Willard, 

Billings   v.    Billings,  31   Hun    (N.   Y.)  J. .said:    "Fraud  can  never,  in  judi- 

65,  69:   "There  must  be  not  only  the  cial  proceedings,   be  predicated  of  a 

intent,    but    the    intent     must     be    so  mere  emotion    of    the   mind,   discon- 

carried  out   thai  some  creditors  are  uected   from  an   acl    occasioning  an 

actually   hindered,    delayed,    or    de-  injury  to  some  one."    See  Masterton 

frauded \     conveyance     is  v.  Beers.  1  Sweeny  (N.  Y.)  419. 

made  with  fraudulent   intent  (inly  as  '  Bunn  v.  Ahl,  29  Pa.  St.  390.     Com- 

to  those  who  are   in   fact  defrauded."  pare   Smith  v.  Smith,  21    Pa.   St.  370  ; 

This  case  was  reversed,  and  the  court  Worthy  v.  Brady,  91  N.  * '.  269. 

says:    "Where   there   is  an  actual    in-  4  Rice  v.   Perry,  (51  Me.  150. 

tent  to  defraud,  no  form  in  which  the  Booth   v.  Carstarphen,   107  N.   0. 

transaction  is  put  can  shield  the  prop-  395,  12  S.   E.  Rep.  375. 


§  196  WHAT   IS   INTENTION.  J53 

Hence  the  court,  as  we  have  shown,  will  not  be  con- 
cluded by  the  statement  of  the  debtor's  mental  opera- 
tions, for  he  is  usually  an  interested  party  ;  nor  will  it 
accept  his  standard  of  morality  as  its  test.  In  Potter  v. 
McDowell,1  this  language  is  used  :  "When  a  voluntary 
deed  is  made  by  a  debtor  in  embarrassed  circumstances, 
and  a  question  arises  as  to  its  validity,  in  order  to  ren- 
der the  deed  fraudulent  in  law  as  to  existing  creditors,  it 
is  not  necessary  to  show  that  the  debtor  contemplated 
a  fraud  in  making  it,  or  that  it  was  an  immoral  or  corrupt 

act The    law    does    not    concern     itself    about 

the  private  or  secret  motives  which  may  influence  the 
debtor;"  he  may  believe  he  had  the  right  to  make  it,  and 
that  it  was  his  duty  to  do  it,  yet  if  the  deed  is  voluntary, 
and  hinders  and  delays  his  creditors,  it  is  fraudulent.  It 
may  be  observed  here  that  a  conveyance  is  fraudulent  if 
the  grantor  meant  to  hinder  or  defraud  any  of  his  cred- 
itors, and  a  charge  conveying  the  idea  that  he  must  have 
meant  to  defraud  all  his  creditors  is  misleading."  Also 
that  it  is  not  necessary  to  show  that  the  fraudulent  intent 
constituted  the  sole  purpose,  but  only  that  it  constituted 
a  part  of  the  purpose  and  design  with  which  the  scheme 
was  entered  into  ;  if  it  is  a  part  of  the  scheme  to  hinder 
or  delay  creditors,  the  whole  transaction  is  void.H  "The 
intent  is  the  essential  and  poisonous  element  in  the 
transaction."4  The  court  will  discriminate  and  frame 
its  decree  accordingly.  Hence  a  mortgage  made  to  two 
creditors   may  be  sustained  as  to  an  innocent   mortgagee 


■31   Mo.    G9.      See    White    v.    Mc-  2  Allen  v.  Kinyon,  41  Mich.  2 

Pheeters,  75  Mo.  294.     In  Wartman  v.  'Manning    v.    Reilly,    16    Weekly 

Wartman,   Taney's  Dec.  370,   Chief-  Dig.    (N.  Y.)   230;   Boll   v.  Creamer, 

Justice  Taney  said  :  ,;  As  regards  the  34   X.   J.  Eq.    181  ;    Russell  v.  Winne, 

question,  whether  a  contempt  has  or  37  X.  Y.  596,  and   cases  cited  ;  Mead 

has  not  been  committed,  it  does  not  v.  Combs,  19  X.  ■).  Eq.  112. 

depend  on  the  intention  of  the  party,  '  M 'e  v.   Hinnant,  89   N.  C.    155, 

but  upon  the  act  he  has  done."     See  459;  Worth}  v.   Brady,  91    X.  C.  269; 

Cartwright's  Case,  114  Mass.  239.  Hollister  v.  Loud,  2  Mich.  309. 

23 


354 


ACTUAL   INTENT   NOT   DECISIVE. 


I97 


and  avoided  as  to  a  fraudulent  mortgagee.1  It  must  be 
borne  in  mind  that  an  intent  to  hinder,  delay,  or  defraud, 
is  sufficient  to  avoid  the  sale  ;2  it  is  not  essential  to  show 
a  union  of  these  elements,  though  it  must  be  conceded 
that  it  is  not  always  an  easy  task  to  distinguish  between 
an  intent  to  hinder  and  an  intent  to  delay.3  It  is  con- 
sidered in  Massachusetts  that  knowledge  of  the  fraudu- 
lent intent  does  not  itself  constitute  participation  in  it.4 
The  statute  against  fraudulent  conveyances  is  aimed  at 
the  intent  of  the  debtor,  not  the  fraudulent  intent  of  the 
grantee  practiced  upon  a  debtor,  to  procure  a  convey- 
ance by  unfair  means.5 

§  197.  Actual  intent  not  decisive.  — The  question  of  the 
donor's  actual  intent  is  not  then  necessarily  decisive.6 
A  man  may  give  his  property  to  his  wife  or  children  in 
the  belief  that  he  has  the  right  to  do  so,  but  if  by  so 
doing  his  existing  creditors  are  hindered  or  delayed,  the 


1  Riggan  v.  Wolf,  5:3  Ark.  537,  14 
S.  W.  Rep.  922. 

2  See  §  11. 

3  Rupe  v.  Alkire,  77  Mo.  642.  See 
Burgert  v.  Borchert,  59  Mo.  83.  See 
Weber  v.  Mick,  131  111.  520,  23  N.  E. 
Rep.  646. 

4  Can-  v.  Briggs,  156  Mass.  80,  30 
N.  E.  Rep.  470;  Banfield  v.  Whipple 
II  Allen  (Mass.)  13. 

'Parker  v.  Roberts,  116  Mo.  657, 
22  S.  W.  Rep.  914.  In  Morton  v.  Mor- 
ris, 36  U.  S.  App.  55(),  560,  the  court 
says  :  "The  intent  which  actuates  a 
creditor  in  seeking  to  enforce  a  legal 
claim  or  demand  i-  ordinarily  of  no 
concern  to  the  debtor,  and  is  not  a 
matter  for  judicial  inquiry  ;  t  he  debtor 
1-  only  entitled  to  complain  when 
some  acl  is  done  <>r  threatened  by  the 
creditor  which  is  in  itself  unlawful, 
orisconl  rary  to  equity.  In  the  present 
case,  the  acts  charged  in  tit**  answer 
bhe  basis  foi    relief  consisted  in  a 


demand  made  by  the  plaintiff  for  an 
accounting  and  settlement  when  the 
defendant  was  in  embarrassed  cir- 
cumstances, and  in  a  threat  to  enforce 
such  demand  by  a  civil  action.  Neither 
of  these  acts  was  unlawful,  or  so  far 
harsh,  oppressive  or  unconscionable 
as  to  vitiate  the  settlement  subse- 
quently made.  Silliman  v.  United 
States,  101  U.  S.  465;  Hackley  v. 
Headley,  45  Mich.  569 ;  Snyder  v. 
Braden,  58Ind.  143  ;  Dunham  v.  Gris- 
wold,  100  N.  Y.  224  ;  Fuller  v.  Roberts, 
35Fla.  110;  McClairv.  Wilson,  18 Col. 
82;  Farmer  v.  Walter,  2  Edw.  Ch. 
(  X.  Y.)  601  ;  Skeate  v.  Beale,  11  Ad. 
&  El.  983;  Wilcox  v.  Howland,  23 
Pick.  (Mass.)  167." 

■;  Haas  v.  Sternbach,  156  111.  54, 
41  N.  E.  Rep.  51  ;  Lawson  v.  Funk, 
108  111.  502;  Brisco  v.  Norris,  112  N. 
C.  676,  16  S.  E.  Rep.  850;  Marks  v. 
Bradley.  69  Miss.  1,  10  So.  Rep.  922. 


§  197  ACTUAL  INTEN  r  NO!     DECISIVE. 

transaction  is  wrongful,  and  the  conveyance  will   be  set 
aside.1     In    McKeown  v.   Allen,2  the  court   says:   "  Hie 
defendants  deny  that  their  intention  was  to  defraud,  hin- 
der or  delay  creditors,  in   the  execution  of  the  convey- 
ance between  them.     Such  hindrance  and  delay  of  the 
complainant,  however,   has  clearly  been  the  result  of  the 
conveyance.      Where  such  has  been  the  effect  of  the  con- 
veyance,   the    real    motives    of    the    parties    thereto    are 
immaterial."3     In    Briggs   v.    Mitchell,  '  the    court    said: 
"The  property  conveyed   to   the  wife   so  far  exceeds  in 
value  the  amount  of  the  money  which  it  was  conveyed  to 
secure,  it  is  of  itself  sufficient  to  authorize  the  holding 
that  the  conveyance  was  fraudulent  as  against  antecedent 
creditors,    without    the   finding    of    actual   or    meditat<<l 
fraud."     The   inference   of    fraud   may  arise  despite    an 
honest  intent.5     In   Lukins  v.  Aird,'1  Davis,  J.,  said  :  "  It 
is  not  important  to  inquire  whether,  as  matter  of  fact,  the 
defendants  had   a   purpose   to   defraud   the  creditors  of 
Aird,  for  the  fraud  in  this  case  is  an  inference  of   law,  on 
which  the  court  is  as  much  bound  to  pronounce  the  con- 
veyance in  question  void  as  to  creditors,  as  if  the  fraudu- 
lent intent  were  directly  proved."     "  An  act  innocent  in 
the   intention    may  be  so   injurious  in  the  consequences, 
that  the  law  declares  it  to  be  a  fraud  and  forbids   it." 
An   assignment   which   delays   certain   creditors    is   void. 


'Winchester  v.   Charter,  97  Mass.  s6  Wall.  79;    Sukeforth  v.  Lord,  81 

140;  Potter  v.  McDowell,  31   Mo.  62 ;  Cal.  400,25  Pac.    Rep.  497;    Wolf  v. 

Patten  v.  Casey,  57  Mo.  118  ;  Marmot)  Arthur,   118  N.  < '  s'»s.  -'I  S.   E,   Rep. 

v.    Harwood,    124  111.    104,   16  N.   E.  671. 

Rep.236.    See  Chaps.  V.,  VI.  '  Kisterbock's     Appeal,   51    P 

2  37  Fla.  497,  20  So.  Rep.  556.  485.    Compare  Lawson   v.  Funk 

3  Citing  Marmon  v.  Harwood.    124  111.  507;  Personette  v.  Cronkbite,  it" 
111.  104,  16  N.  E.  Rep.  236.  Ind.  586,  l<>   X.   E.  Rep                 th  v. 

4  60  Barb.  (N.  Y.)  316.  Caxstarpben,    in?  N.  C.  895,  12  - 

5  Coleman    v.   Burr,  93    N.   Y.    17:  Rep.  375;  Sutherland  v.  Bradner.  116 
Roberts  v.   Vietor,  130  N.  Y.  600,  29  N.  Y.  410,  22  N.  E.  Rep.  554  ;  Cou 

N.  E.  Rep.  1025  ;  Sutherland  v.  Brad-  v.  Morton.   132    N.  V.    556,    8 

ner,  116  N.  Y.  410,  22  N.  E.  Rep.  554.  Rep.  231. 


356  FRAUD   OF   AGENT.  §  I98 

though  no  fraud  was  intended  by  the  assignor  or 
assignee.1  A  different  doctrine  seems  to  be  recognized 
in  Minnesota.  An  actual  corrupt  and  dishonest  design 
or  purpose  seems  to  be  required.  ~  That  the  debtor 
made  the  conveyance  to  avoid  the  plaintiff's  claim 
because  he  did  not  believe  it  to  be  just  will  not  sustain 
the  transfer.3     This  subject  has  already  been  discussed.4 

§  198.  Fraud  of  agent  binding  upon  principal.  —  Warner 
v.  Warren,5  establishes  the  principle  that  actual  fraudu- 
lent intent,  sufficient  to  avoid  a  transfer,  need  not  be 
personal  to  the  debtor.  In  this  case  a  husband  obtained 
a  power  of  attorney  from  his  wife  authorizing  him  to 
transact  business  as  her  agent.  By  means  of  false  state- 
ments he  established  a  fictitious  credit  for  her,  incurred 
liabilites  in  her  name,  and  then  induced  the  wife  to  make 
an  assignment.  The  wife  was  a  guileless,  artless  woman, 
who  took  no  part  in  the  business,  and  intended  to  com- 
mit no  wrong,  but  was  a  mere  passive  instrument  in  the 
hands  of  her  husband,  by  whom  the  frauds  were  perpe- 
trated. In  avoiding  the  assignment,  in  favor  of  an 
attaching-creditor,  Grover,  J.,  said  that  the  husband's 
"  objects  became  hers  ;  his  frauds  were  her  frauds  ;  and 
she  is  responsible  therefor,  however  destitute  of  any 
knowledge  thereof."  This  case  is  a  valuable  precedent, 
showing  that  intent  may  be  established  by  implication  or 
substitution,  and  that  mental  operation  or  emotion  is  not 
necessarily  the  test.0 

1  Sutherland  v.  Bradner,  116  X.  V.  N.   Y.  Superior,  95;  affi'd  62  N.  Y. 

no,  22    N.   1:.   Rep.  554.     See  Chap.  535. 

XXI  *  See  §  8.     In  Trumbull  v.  Hewitt, 

In    re  Shotwell,  43  Minn.  339,  15  <i~>  Conn.  60,  31  Atl.  Rep.  492,  the  doc- 

N.  W.  Rep.  843.  trine  of  Warner  v.  Warren,  46  N.  Y. 

Barrefl   v.  Nealon,  119  Pa.  St.  171,  228,  is  applied  to  a  case  where  a  con- 

1\!  Atl.  Rep.  861.  veyance  was  made  by  the  husband  to 

\  9,  !<).  his  wife  for  a  valuable  consideration, 

Hi  X.  Y.  228  ,    Wicks  v.  Eatch,  38  and  without  knowledge  or  fraudulent 


i99 


PARTICIPATION    l\    FRAUDULEN1     l\i 


$57 


Incidentally  it  may  be  noted  that  there  must  be  clear 
proof  that  the  knowledge  or  notice  was  present  in  the 
mind  of  the  agent  at  the  time  of  the  transaction  in  ques- 
tion in  order  to  charge  the  principal.1 

§  199.  Mutuality  of  participation  in  fraudulent  intent. 
Generally  speaking,  to  render  a  conveyance   fraudulent 
and  voidable  as  against  creditors,  there  must  have  been 
mutuality  of  participation  in  the  fraudulent  intent,  on  the 
part  of  both  the  vendor  and  the  purchaser." 


intent  on  her  part,  on  the  ground  that 
the  facts  showed  that,  in  the  transac- 
tion, the  husband  acted  not  merely  as 
gi-antor,  but  as  agent  for  his  wife, 
and  therefore  his  fraud  was  held  to 
be  imputable  to  her.  See  also  Smith 
v.  Water  Commrs.  of  Norwich,  38 
Conn.  208  ;  O'Connell  v.  Kilpatrick, 
64  Md.  130,  *21  Atl.  Rep.  98. 

1  See  Constant  v.  University  of 
Rochester,  111  N.  Y.  604,  19  N.  E. 
Rep.  631  ;  Hall  v.  Germain,  131  N.  Y. 
536,  30  N.  E.  Rep.  591  ;  Slattery  v. 
Schwannecke,  118  N.  Y.  543,  23  N.  E. 
Rep.  922 ;  Denton  v.  Ontario  County 
Nat.  Bank,  150  N.  Y.  137,  44  N.  E. 
Rep.  781. 

2  Curtis,  v.  Valiton,  3  Mont.  157; 
Mehlhop  v.  Pettibone,  54  Wis.  652, 
11  N.  W.  Rep.  553,  12  Id.  443  ;  Hall 
v.  Arnold,  15  Barb.  (N.  Y.)  600  ;  Wil- 
son v.  Prewett,  3  Woods  635  ;  Hop- 
kins v.  Langton,  30  Wis.  379  ;  Steele 
v.  Ward,  25  Iowa  535  ;  Schroeder  v. 
Walsh,  120  111.  403,  11  N.  E.  Rep.  70  ; 
Miller  v.  Bryan  3  Iowa  58  ;  Chase  v. 
Walters,  28  Iowa  460  ;  Kittredge  v. 
Sumner,  11  Pick.  (Mass.)  50;  McCor- 
mick  v.  Hyatt,  33  Ind.  546  ;  Cooke  v. 
Cooke,  43  Md.  522,  525;  Fifield 
v.  Gaston,  12  Iowa  218  ;  Preston  v. 
Turner,  36  Iowa  671  ;  Drummond 
v.  Couse,  39  Iowa,  442  ;  Kellogg  v. 
Aherin,  48 Iowa,  299  ;  Rea  v.  Missouri. 
17  Wall.  543  ;   Demarest  v.  House,  91 


Hun  (N.  Y.)29(),  36  X.  Y.  Supp.  291  : 
Wolf  v.  Arthur,  lis  \.  fj.  898,  24  S. 
E.  Rep.  671;  Jackson  v.  Glaze,  •".  Okl. 
143.41  Pac.  Rep.  79;  Schram  v.  Tay- 
lor. 51  Kan  552,33  Pac.  Rep.  315;  Wil- 
son v.  Spear,  OS  Vt.  1 15,  ::i  Atl.  Rep. 
429;  First  Nat.  Bk.  v.  Hamilton,  59 
N.  V.  St.  Rep.  331  ;  Salmi  v.  Colum- 
bia Fuel  Co.,  '25  Ore.  1."..  Ml  Pac.  Rep. 
692;  Tolman  v.  War. I,  86  Me. 
Atl.  Rep.  1081  ;  Stevens  Lumber  Co. 
v.  Kansas  City  Planing  Mill  Co., 
59  .Mo.  App.  :;?:!;  Uberger  v. 
Whit.'.  117  Mo.  347,  23  S.  W.  Rep. 
92;  The  State  v.  Mason,  112  Mo. 
374,  20  S.  W.  Rep,  629 :  Leach  v. 
Francis,  41  Vt.  670  ;  Partelo  v.  Harris, 
26  Conn.  480;  Ewingv.  Runkle,  20  III. 
448  ;  Violett  v.  Violett,  2  Dana  K\. 
323  ;  Foster  v.  Hall,  12  Pick.  (Mass.) 
89;  Byrne  v.  Becker,  42  Mo.  264; 
Bancroft  v.  Blizzard,  13  Ohio  30; 
Splawn  v.  Martin,  17  Ark.  146;  Gov- 
ernor v.  Campbell,  17  Ala.  566  ;  Run] 
v.  Phillips,  4.s  X.  V.  L25  ;  Jaeger  v. 
Kelley,  52  X  ,  Y.  274  ;  Clements  v. 
Moore,  (i  Wall.  312;  Astor  v.  Wells, 
1  Wheat,  l1'1'  i  Howe  Machine  <  !o.  v. 
Claybourn,  0  Fed.  Rep.  HI  ;  Pier- 
son  v.  Slifer,  .v.1  Mo.  A.pp 
Blumer   v.  Bennett,    11   N 

X.  W.  Rep.  14;  W Iruff   \.  Bowles, 

nil  \.  C.  L97,  L0  s.  E.  Rep.    182 

oinl   Xai.   Bank  of   Beloil    v.   Merrill, 

SI  Wis.  142,  50  X.  W.  Rep.  503  ; 


358 


PARTICIPATION   IN    FRAUDULENT    INTENT. 


I99 


In  discussing-  this  subject  Chief-Justice  Church  used 
these  words  :  "  Nor  is  the  vendor's  fraudulent  intent  suffi- 
cient. The  vendee  must  be  also  implicated."  1  So  in 
another  case  it  is  asserted  that  in  order  to  set  aside,  as 
fraudulent  against  creditors,  a  conveyance  to  one  cred- 
itor, he  must  have  participated  in  or  have  been  cognizant 
of  the  grantor's  unlawful   motives  when  he  accepted  the 


v.  Garrison,  85  Iowa  447.  52  N.  W. 
Rep.  359  ;  LePage  v.  Slade.  79  Tex. 
473,  15  S.  W.  Rep.  496 ;  Bannister  v. 
Phelps,  81  Wis.  256,  51  N.  W.  Rep. 
417 ;  Nadal  v.  Britton,  112  N.  C.  ISO, 
16  S.  E.  Rep.  914. 

No  participation  by  infant  in 
fraudulent  intent. — The  creditor  is 
sometimes  embarrassed  or  foiled  by  a 
conveyance  to  some  person  not  sni 
juris,  as  for  instance  an  infant.  In 
Hamilton  v.  Cone,  99  Mass.  478, 
Gray,  J.,  said  :  "  The  only  case  cited 
for  the  tenant  which  requires  special 
consideration  is  that  of  Goodwin  v. 
Eubbard,  15  Mass.  210.  But  in  that 
case  the  person  to  whom  the  convey- 
ance was  made,  as  well  as  his  subse- 
quent grantee,  the  demandant,  par- 
ticipated in  the  fraudulent  intent  of 
the  debtor,  who  paid  the  purchase- 
money  ;  and  the  decision  by  which 
this  court,  having  then  no  jurisdic- 
tion in  equity  to  redress  fraud,  held 
that  a  grantee  who  participated  in  the 
fraudulent  intent  could  not  maintain 
a  writ  of  entry  against  a  creditor  who 
had  taken  the  land  on  execution 
against  the  fraudulent  debtor,  cannot 
I"-  extended  to  this  case,  tn  which 
tin-  demandant  at  the  time  of  the 
conveyance  to  him  was  an  infant  of 
less  than  a  year  old,  and  could  not 
participate  in  the  fraud,  and  there 
was  do  offer  to  show  that  the  convey- 
ance was  without  adequate  considera- 
tion." ( Siting  Howe  v.  Bishop,  :'.  Met. 
Mass.)  30;  Clark  v.  Chamberlain,  13 


Allen  (Mass.)  257.  See  Mathes  v. 
Dobschuetz,  72  111.  438:  Tenney  v. 
Evans,  14  N.  H.  343;  40  Am.  Dec. 
194.  See,  also,  §  26.  In  Matthews  v. 
Rice,  31  N.  Y.  460,  it  is  asserted  that 
the  fact  that  the  plaintiff  was  an  in- 
fant and  purchased  partly  upon  credit 
from  a  firm  in  apparently  straitened 
pecuniary  circumstances,  did  not  ren- 
der the  sale  void  in  law  as  against 
creditors.  The  court  said  :  "The  in- 
fancy of  the  plaintiff  did  not  alter  or 
affect  the  transaction,  save  as  a  cir- 
cumstance bearing  upon  the  question 
of  fraud  in  fact.  There  is  no  legal 
bar  to  the  right  of  an  infant  to  pur- 
chase property  either  for  cash  or 
upon  credit  ;  and  the  vendor  cannot 
avoid  or  retract  the  sale,  or  question 
its  validity  on  the  ground  that  the 
vendee  is  an  infant,  much  less  can  a 
stranger  impeach  the  sale  on  that 
ground.  In  this,  as  in  other  cases  of 
a  sale  of  chattels,  its  invalidity  as  to 
creditors  depends  upon  whether  it 
was  made  with  intent  to  defraud 
them."  See  Washband  v,  Washband, 
27  Conn.  424  :  ( larter  v.  Grimshaw,  49 
N.  H.  100. 

■Jaeger  v.  Kelley,  52  ;N.  Y.  275. 
See  Starin  v.  Kelly,  88  N.  Y.  421  : 
Grunsky  v.  Parlin,  110  Cal.  179,  42 
Pac.  Rep.  575 ;  American  Brewing 
Co.  v.  McGruder  (Ky.)  32  S.  W.  Rep. 
603  ;  Galle  v.  Tode,  148  N.  Y.  270.  42 
X  E.  Rep.  673  ;  Flemington  Nat.  Bk. 
v.  Jones,  50  N.  J.  Eq.  249,  24  All 
Rep.  928. 


§199  PARTICIPATION    !\    FRAUDULEN1     INTENT. 

conveyance.1  In  Prewit  v.  Wilson,8  Field,  [.,  observed  : 
"When  a  deed  is  executed  for  a  valuable  and  adequate 
consideration,  without  knowledge  by  the  grantee  of  any 
fraudulent  intent  of  the  grantor,  it  will  be  upheld,  how- 
ever fraudulent  his  purpose.  To  vitiate  the  transfer  in 
such  case,  the  grantee  also  must  be  chargeable  with 
knowledge  of  the  intention  of  the  grantor. :!  It  is  held  in 
Dudley  v.  Danforth,4  by  the  New  York  Commission  of 
Appeals,  that  where  a  vendee  purchased  property  solely 
with  a  view  of  receiving  payment  of  an  honest  debt,  an 
intent  on  the  part  of  the  debtor  to  hinder  and  defraud 
creditors  would  not  affect  the  vendee's  title,  although  the 
vendee  had  notice  of  the  intent,  provided  he  did  not  par- 
ticipate in  it.5  In  such  case  the  purchase  is  in  reality  a 
preference  of  a  creditor;  an  act  allowed  by  law  unless 
actual  participation  in  the  fraud  is  shown.  A  distinction 
should  be  made  between  conveyances  made  for  a  con- 
sideration paid  to  the  grantor  at  the  time  of  the  convey- 
ance and  those  made  in  payment  of  a  debt.  In  the 
first  case  knowledge  of  the  fraudulent  intent  on  the  part 
of  the  grantor,  and  his  purpose  to  deprive  the  creditors 
of  the  consideration  received  should  be  enough  to  invali- 
date the  conveyance.  In  such  cases  the  payment  of  a 
consideration,  knowing  that  the  object  of  the  sale  is  to 

1  Roe  v.  Moore.  35  N.  J.  Eq.  526.  See  Curtis  v.  Leavitt,  L5  X.  Y.  '••      In 

2  103  U.  S.  24.  Graham  v.   Railroad  Co.,    102   ' 

3  Werner  v.   Zierfuss,    162  Pa.  St.  161,  Bradley,  J.,  said:  "We  Bee  no 
365,  29  Atl.  Rep.  737.  reason  whythe  disposal  by  a  corpora- 

4  61  N.  Y.  626.  tion  of  any  of  its  property  should  !»• 
6  Knower    v.    Central    Nat.    Bank,      questioned  by  subsequent  creditors  of 

124  N.  Y.   552,  27  N.   E.    Rep.    217;  the  corporation  any  more  than  a  like 

Harris  v.   Russell,   93  Ala.  59,   9  So.  disposal  by  an  individual  of  his  prop 

Rep.  541 ;  Werner  v.  Zierfuss.  162  Pa.  erty  should  be  so.     The  same  princi- 

St.  360,  29  Atl.  Rep.  737;  Treusch  v.  pies  of  law  applj  to  each."     Morrow 

Ottenburg    4  C.  G.  A.  629,    51    Fed.  Shoe   Mfg    Co.  v.  New  England  Shoe 

Rep.  867.  '  Co.,  60Fed.  Rep.  341;  rTollin 

Rules' as    to    Corporations.  -The  field  Coal,  etc.,  Co.,  150  tT.  S 

rules  governing  fraudulent  transfers  S.  C.  Rep.  L27    I  tole  v.  Millerton  I 

are  also  applicable  to   corporations.  Co.,  133  N.  V.  164,  30  N    E    Rep 


360  INTENT   AFFECTING   ALIENATIONS.  §  200 

facilitate  the  covering  up  of  assets,  is  an  actual  participa- 
tion. It  is  different  in  the  second  case.  A  creditor  has 
a  right  to  have  his  debt  paid,  and  by  accepting  such 
payment  he  does  not  enable  the  grantor  to  defraud  his 
creditors,  and  mere  knowledge  of  a  fraudulent  intent,  in 
which  he  does  not  participate,  should  not  invalidate  the 
conveyance  as  to  him. 

S200.  Intent  affecting  voluntary  alienations.  — The  rule  as 
to  intent  in  voluntary  alienation,  as  we  shall  presently  see, 
necessarily  differs  from  cases  where  a  valuable  consider- 
ation '  is  present.  In  the  latter  class  of  cases  mutual 
participation  in  the  fraudulent  design  must,  of  course, 
ordinarily  be  established.  Where  the  alienation  is  volun- 
tary the  invalidity  may,  as  already  shown,  be  predicated  of 
the  fraudulent  intent  of  the  vendor  without  regard  to  the 
knowledge  or  motives  of  the  vendee.  In  such  cases  the 
vendee  is,  of  course,  cognizant  of  the  fact  that  nothing 
was  paid  for  the  property.  The  cases  relating  to  this 
branch  of  the  inquiry  are  reviewed  by  the  Supreme  Court 
of  Maine  in  Laughton  v.  Harden,2  an  important  case 
from  which  we  have   already  quoted.3      Judge  Story  thus 


1  See  Chap.  XV.  ticipated  in  the  fraud  or  not.'    In  that 

-  68    Me.    213.     See  Tucker   v.  An-  case,   the   contending    party    was    a 

drews,   13  Me.   124  ;  Lee  v.  Figg,    37  creditor   subsequent   to   the    convey- 

Cal.  328  ;    Watson  v.    Riskamire,    45  ance.   In  Beecher  v.  Clark,  12  Blatchf. 

Iowa  233;  Stearns  v.  Gage,  79  N.  Y.  256.  ;i  voluntary   conveyance  was  set 

102  ;  Jackson  v.   Lewis,  34  S.  C.  1;  aside  for  the  benefit  of  both  prior  and 

Wilson   v.   Marion,   147  N.   Y.  597,  42  subsequent  creditors.    Hunt,  J.,  says  : 

X.   K.   Rep.  190  ;  Jacobs  v.  Morrison.  •  I   cannot  assent  to  the  proposition, 

136  N.  V.  105,  32  N.  E.  Rep.  552.  that  it  is   necessary  that   the  grantee 

See  g§  07,  98.  should  have  known  that  the  intent  of 

The  cases  as  to  intent  -  Voluntary  t lie  grantor  was  fraudulent,  and  that 

conveyances. — The  court,  in  Laughton  she  should  have  been  an  intentional 

v.  Earden,  68  Mo.  213,  summarize  the  party  to  the  fraud.     The  fact  that  a 

m-isiis  follows:     "In   Hitchcock  v.  wife  received  a  voluntary  conveyance 

Kiely,  11   Conn.    611,    it    was  decided  of  the  same,    in   ignorance  of  these 

that '  a  voluntary  conveyance,  fraudu-  facts    (showing    fraud   in   fact),    will 

hut  in  fact,  will  be  set  aside  in  favor  not  make  the  conveyance  a  valid  one.' 

of  creditors,  whether  the  grantee  par-  Savage  v.  Murphy,  8  Bosw.   (N.  Y.) 


201 


WHERE   CONSIDERATION    IS    ADEQUATE. 


states  the  rule  borrowed  from  the  civil  law  by  both  the 
common  law  and  the  courts  of  chancery  :  "  Hence,  all 
voluntary  dispositions,  made  by  debtors,  upon  the  score  of 
liberality,  were  revocable,  whether  the  donee  knew  of  the 
prejudice  intended  to  the  creditors  or  not."  ' 

§201.  Of  intention  where  consideration  is  adequate.  —  The 
rule  that  a  voluntary  conveyance  of  property  by  a  debtor 


75,  contains  a  learned  review  by  Hoff- 
man, J.,  of  the  earlier  decisions  by 
which  subsequent  purchasers  and 
creditors  were  permitted  to  quest  inn 
conveyances  as  being  fraudulent 
against  them,  and  this  proposition  is 
there  laid  down:  'Where  a  deed  is 
made  to  defraud  creditors,  by  one  at 
the  time  in  debt,  and  who  subse- 
quently continued  to  be  indebted,  it 
is  fraudulent  and  void,  as  to  all  such 
subsequent  as  well  as  existing  cred- 
itors.' See  also  Carpenter  v.  Roe,  10 
N.  Y.  227.  In  Mohawk  Bank  v.  At- 
water,  2  Paige  (N.  Y.)  54,  Chan- 
cellor Walworth  says  :  '  It  is  of  no 
consequence  in  this  suit  whether  the 
son  knew  of  the  extent  of  his  father's 
indebtedness  or  not.  The  grantee 
without  valuable  consideration  can- 
not be  protected,  although  he  was  not 
privy  to  the  fraud.'  In  Carter  v. 
Grimshaw,  49  N.  H.  100,  the  intent  of 
minor  children  upon  whom  a  settle- 
ment was  made  was  considered  of  no 
consequence  at  all.  Coolidge  v.  Mel- 
vin,  42  N.  H.  510,  534,  sustains  the 
same  view.  In  Savage  v.  Murphy,  34 
N.  Y.  508,  the  same  idea  is  strongly 
presented  by  the  court.  Among  other 
things  said  about  the  rights  of  subse- 
quent creditors  against  a  voluntary 
deed,  this  is  added:  'The  indebted- 
ness then  existing  was  merely  trans- 
ferred, not  paid,  and  the  fraud  is  as 
palpable  as  it  would  be  if  the  debts 
now  unpaid  were  owing  to  the  sa mi' 
creditors  who  held  them  at  the  time 
of  the  transfers.'     In  Clark  v.  Cham- 


berlain,  13  Allen  (Mass.)  251 
Hoai\  J.,  remarks  :  '  Winn  the  pur- 
pose of  the  grantor  is  shown  to  have 
been  actually  fraudulent  as  in  cred 
itors,  ii  is  sufficienl  to  prove  thai  the 
.-ran tee  takes  without  consideration, 
without  proving  otherwise  his  par- 
ticipation in  the  fraudulent  intent.1 
Lee  v.  Figg,  37  Cal.  328,  concludes  an 
opinion  thus  :  '  It  (the  allegation  I 
avers  thai  the  com  ej  ance  to  ( >gden 

was  without  consideration,  and  this  is 

sufficient  to  avoid  it  as  to  creditors  of 
Lee  (the  grantor),  whether  Ogden 
was  aware  of  the  fraudulent  purpose 
of  Lee  and  actively  aided  it  or  not.' 
Lassiter  v.  Davis,  64  N.  < '.  198,  decides 
thai  'a  voluntary  gift  is  void,  if  it 
was  the  maker's  intent  to  hinder,  de- 
lay or  defraud  creditors,  whether  the 
party  who  takes  the  gifl  participated 
in  the  fraudulent  intent  or  not.'  In 
Foley  v.  Bitter,  34  Md.  646,  it  was 
held  to  the  same  effect,  and  it  i>  then' 
said  :  '  The  innocence  of  the  trustee, 
or  of  the  creditors  named  in  the  deed, 
will  not  save  it  (an  assignment)  from 

condemnation  under  the  statu! t 

Elizabeth)  it'  fraudulent  in  fact  on  the 
part  of  the  grantor.'  " 
story's  Eq.  Jur.  . 
Spaulding  v.  Blythe,  73  [nd.  94 
liland  v.  dunes.  1  II  [nd.  662,    18  N    E 
Rep.   939  ;    Trumbull    v.     Hewitt,    65 
Conn.  73,31  Atl.  Rep.  192;  Bitchcock 
v.   Kiely,  41   Conn.  611  :  McKenna  \. 
Crowley,    10   R,    1.  364,    17    All.    R<  p. 
354,  citing  the  text. 


62  WHERE   CONSIDERATION    IS   ADEQUATE.  8  201 


may  be  annulled  at  the  suit  of  creditors,  where  such  con- 
veyance leaves  the  debtor  without  the  means  to  pay  the 
remaining  creditors,1  seems  to  commend  itself  as  being 
both  necessary  and  reasonable.  The  theory  of  the  law  is 
sometimes  said  to  be  that  the  debtor's  property  consti- 
tutes a  fund  upon  which  the  creditors  are  supposed  to 
have  relied  in  extending  the  credit,2  and  to  which  they 
are  entitled  to  resort  for  payment  of  their  claims,  but  this 
has  been  termed  an  inaccurate  use  of  language.  The 
technical  qualities  of  a  trust  fund  do  not  pertain  to  a 
debtor's  estate.  The  plainest  dictates  of  common  sense 
and  the  simplest  principles  of  justice  require  that  any 
depletion  of  a  debtor's  estate  should  not  be  permitted  to 
stand  in  favor  of  a  voluntary  alienee,  in  cases  where  cred- 
itors remain  unpaid.  Chief-Justice  Shaw  said  :  "In  a 
voluntary  absolute  conveyance,  the  fact  that  no  consider- 
ation is  paid  is,  of  course,  known  to  both  parties.  If  the 
grantor  was  in  debt  at  the  time,  as  such  conveyance  must 
necessarily  tend  to  defeat  the  rights  of  creditors,  and  as 
all  persons  are  presumed  to  contemplate  and  intend  the 
natural  and  probable  consequences  of  their  own  acts,  the 
conclusion  is  irresistible  that  such  conveyance  was 
intended  to  defeat  creditors,  and  is  therefore  fraudulent."  3 
A  different  question,  however,  is  presented  where  full 
pecuniary  consideration  has  been  paid  by  the  purchaser.4 
Can  the  transfer  be  nullified  in  .such  cases,  and  if  so,  in 
what  instances,  by  what  procedure  and  upon  what  theory? 
The  answer  is  that,  generally  speaking,  a  debtor's  convey- 
ance can  be  set  aside  where  it  is  made  with  a  mutual 
fraudulent  intent  to  hinder,  delay  .  and  defraud  creditors, 
and  that  adequacy  of  consideration  will  not  save  it. 
In   this  class  of  cases  "  the  question   of  intent   becomes 

1  McKeown   v.  Allen,  37Fla.  490,20  104.    See  First  Nat.  Bank  v.  Bertschy, 

So.  Rep.  556.  52  Wis.  443,  9  N.  \V.  Rep.  534. 

See  <  lhap.  II..  4  Marmon  v.  Harwood,  124  111.  104. 

Warden   v.  Babcock  2Met.  (Mass.)  I.G  N.  E.  Rep.  230.     See  Chap.  XV. 


§  201  WHERE   CONSIDERATION    IS    ADEQUA  l  I  . 

prominently  material."1  Lord  Mansfield  said,  in  dis- 
charging a  rule  for  a  new  trial  in  Cadogan  v.  Kennetl  :  - 
"  If  the  transaction  be  not  bona  fide,  the  circumstance  of 
its  being  done  for  a  valuable  consideration  will  not  alone 
take  it  out  of  the  statute.  I  have  known  several  cases 
where  persons  have  given  a  fair  and  full  price  for  goods, 
and  where  the  possession  was  actually  changed,  yet,  being 
done  for  the  purpose  of  defeating  creditors,  the  transaction 
has  been  held  fraudulent,  and  therefore  void."  The 
"  several  cases  "  of  which  this  learned  jurist  had  knowledge, 
where  conveyances  founded  upon  adequate  consideration 
had  been  overturned  by  reason  of  the  bad  faith  of  the 
participants,  have  grown  to  many  thousands,  and  the  prin- 
ciple has  become  one  of  vital  interest  and  paramount 
importance  to  the  parties  concerned.  That  a  conveyance, 
whether  it  be  of  real  or  personal  property,  founded  upon 
adequate  consideration,  may  be*  vacated  at  the  suit  of 
creditors  for  fraud,  is  established  in  an  endless  variety  of 
cases,  a  few  only  of  which  we  consider  it  necessary  to 
cite.3  A  mere  volunteer  from  a  fraudulent  grantee  is  in  no 
better    position.4     In   Wadsworth   v.  Williams,3  Hoar.  J., 


1  Bradley  v.  Ragsdale,  64  Ala.  559  ;  the  reach  of  his  creditors,  would  be  a 

Scott    v.    Davis,    117    Ind.    232,    20  mala  fide  purchaser  and  entitled  to  no 

N.  E.  Rep.  139  ;  Plunkett  v.  Plunkett,  protection  as  against  creditors." 

114  Ind.  484,  16  N.   E.   Rep.   612,    17  a  2  Cowp.  434. 

Id.  562;  Marmon  v.  Harwood,  124  'Brinks  v.  Heise,  84  Pa.  St.  351  , 
111.  104,  16  N.  E.  Rep.  236.  "A  sale  Ashmeadv.  Hean,  13  Pa.  St.  584  ;<  os 
of  property,  even  for  full  value,  in  v.  Miller.  54  Tex.  27  ;  Stinson  v.  Haw- 
order  to  hinder  or  delay  creditors,  kins,  13  Fed.  Rep.  833;  Eartshorn  \. 
both  vendor  and  vendee  knowing  the  Eames,  31  Me.  93  ;  Holbird  v.  Ander- 
fraudulent  purpose,  cannot  be  up-  son,  5  T.  R.  235  ;  Pickstock  v.  Lyster, 
held."  Treat,  J.,  in  Stinson  v.  Haw-  3  M.  &.  S.  371  ;  Covanhovan  v.  Bart, 
kins,  4  McCrary  504.    In  Greenleve  v.  21  Pa.  St.  500  ;  Grover  v.   Wakeman, 

Blum,  59  Tex.  127,  the  court  says  :  "A      11  Wend.  (N.  Y.)  192  ;  Si v.  Spen- 

purchaser  not  a  creditor  who  should  cer,  77  Mo.  359;  Collier  v.  Banna,  71 

buy   the   property  of  a  debtor,  how-  Md.  253,  17  Atl.  Rep.  L017. 

ever  adequate  might  be  the  consider-  4  Dexter  v.  Smith,  2  Mason 

ation  which  he  paid,  with  a  knowledge  Fed.  Cases,  621 . 

that^it  was'the  intention  of  the  debtor  5 100  Mass.  130. 
by  the  sale  to  put  the  property  beyond 


364  WHERE   CONSIDERATION   IS   ADEQUATE.  §  201 

in  delivering  the  opinion  of  the  Supreme  Court  of  Massa- 
chusetts, said  :  "  A  conveyance  made  with  an  actual  pur- 
pose and  intent  to  defraud  creditors,  present  or  future,  is 
not  valid  against  them  in  favor  of  a  grantee  who  partici- 
pates in  the  fraudulent  intention,  although  made  for  a  full 
consideration,  and  by  a  grantor  in  the  possession  of  any 
amount  of  property."  The  learned  Chief-Justice  Black 
observed  :  "  If  a  debtor,  with  the  purpose  to  cheat  his 
creditors,  converts  his  land  into  money,  because  money  is 
more  easily  shuffled  out  of  sight  than  land,  he,  of  course, 
commits  a  gross  fraud.  If  his  object  in  making  the  sale 
is  known  to  the  purchaser,  and  he  nevertheless  aids  and 
assists  in  executing  it,  his  title  is  worthless,  as  against 
creditors,  though  he  may  have  paid  a  full  price.  But  the 
rule  is  different  when  property  is  taken  for  a  debt  One 
creditor  of  a  failing  debtor  is  not  bound  to  take  care  of 
another.  It  cannot  be  said  that  one  is  defrauded  by  the 
payment  of  another.  In  such  cases,  if  the  assets  are  not 
large  enough  to  pay  all,  somebody  must  suffer.  It  is  a 
race  in  which  it  is  impossible  for  every  one  to  be  fore- 
most.'" J  It  matters  not  what  price  was  paid,  or  how  early 
after  the  sale  possession  was  changed,  or  how  notorious 
the  transaction  was,  if  the  vendor  made  the  sale  in  order 
to  defraud  his  creditors,  and  the  vendee  purchased  with 
the  design  to  aid  him  in  the  perpetration  of  the  fraud, 
the  sale  is  no  more  valid  or  effectual  against  such  creditors 
than  as  if  no  consideration  had  passed.2  The  right  of  a 
debtor,  even  in  failing  circumstances,  to  prefer  a  creditor,3 
or  to  sell  and  dispose  of  his  property  in  good  faith  and 
for  value,  to  whomsoever  he  wishes,  is  generally  unques- 


1  Covanhovan  v.   Hart.    21   Pa.  St.  '  Bostwick    v.    Burnett,     74   N.   Y. 

500;    Nichols   v.    Ellis,    98    Mo.    344,  319  ;  Hauselt  v.  Vilmar,  2  Abb.  N.  C. 

11  S.    W.  Eep.   T41  ;   Werner  v.   Zier-  (N.  Y.)  222 :  Gray  v.    MrCallister,  50 

fuss,  L62  Pa.  St.  866,  29  Atl.  Rep.  737.  Iowa  497. 
Stone  v.  Spencer,  77  Mo.  359. 


§  201  WHERE   CONSIDERATION    IS   ADEQ1    VII. 

tioned  in  the  courts.1  Thus  the  intention  to  defeat  an 
execution  creditor  will  not  render  the  sale  fraudulent  if  it 
was  made  for  a  valuable  consideration,  and  is  bona  fide 
and  absolute.3  So  a  confession  of  judgment  with  intent 
to  give  priority  is  valid.3  The  transfers  which  we  have 
instanced  as  objectionable  are  those  which  are  merely 
colorable,  or  in  which  some  secret  right,  benefit,  favor,  or 
interest  is  reserved  to  the  debtor,  or  some  unusual  incident 
attends  the  transaction,  stamping  it  as  being  out  of  the 
ordinary  course  of  business,  and  as  having  been  contrived 
to  hinder,  delay,  or  defraud  creditors.  Payment  of  the 
consideration  is  often  in  such  cases  a  part  of  the  scheme 
to  more  completely  cover  and  conceal  the  fraud.  Hence 
it  is  said  that  it  is  not  the  consideration,  but  the  intent 
with  which  a  conveyance  is  made,  that  makes  it  good  or 
bad  as  to  creditors.4  Where  such  fraudulent  intent  is 
proved,  the  fact  that  the  debtor  had  property  in  another 
State  sufficient  to  pay  his  debt  will  not  save  the  trans- 
action.5 

In  Jones  v.  Simpson,6  it  was  said  that  where  bad  faith 
in  the  vendor  appeared,  the  burden  was  cast  upon  the 
vendee  to  show  consideration,  and  this  being  established 
the  creditors  must  assume  the  burden  of  attacking  the 
vendee's  good  faith.  This  seems  to  state  the  rule  cor- 
rectly, but  general  expressions  to  the  effect  that  proof  of 


1  Hobbs  v.  Davis,  50  Ga.  214;  Hall  Beards  v.  Wheeler,  I!  Bun(N.  Y.) 
v.  Arnold,  15  Barb.  (N.  Y.)  599.  See  539  ;  affi'd  76  N.  V,  213.  See  Trier  \ . 
Chapter  XXV.  Herman.  115  X.  V.  Hi:!.  21  N.  E.  Rep. 

2  Wood  v.  Dixie,  7  Q.  B.  892;  1034:  Holbird  v.  Anderson,  5  '1'.  I:. 
Storey  v.  Agnew,  2  111.  App.  353  ;  Wil-  235.     See  i  1 1 . 

son  v.  Pearson,  20  111.  81  ;  Francis  v.  '  Hunters    v.  Waite,  3  Gratt.    \  a. 

Rankin,  84  111.  169;  Dudley  v.   Dan-  26;  Lockhard  v.    Beckley,  LOW.  Va. 

forth,  61  N.  Y.   626  ;  Dalglish  v.  Mc-  96. 

Carthy,  19  Grant  (Ont.)  578;  Ninimo  Barding  v.  Elliott,  91   Hun  (N    Y.) 

v.  Kuykendall,  85  111.  476  ;  Ricbes  v.  502,  36  N.  Y.  Supp.  648. 
Evans,  9    C.   &    P.    640;    Frazer   v.  ''116   U.   S.   610,  6  S.   C    Re] 

Thatcher,  49  Texas,  26;  Clark  v.  Mor-  See  Bamberger  v.  Schoolfield,  L60  Q. 

rell,  21  U.   C.  Q.   B.  600;  Darvill  v.  S.  150,  16  S.  C.  Rep.  225. 
Terry,  6  H.  &  N.  807. 


366  INTENTION   TO   DEFRAUD.  §  202 

bad  faith  in  the  vendor  throws  the  burden  of  establishing 
both  consideration  and  good  faith  upon  the  vendee  are 
frequently  encountered  in  the  authorities. 

§  202.  Intention  to  defraud  subsequent  creditors.  — We 
have  elsewhere  seen  that,  generally  speaking,  a  voluntary 
alienation  is,  as  to  existing  creditors,  according  to  some 
cases,  presumptively  fraudulent,  but,  as  to  subsequent 
creditors,  a  fraudulent  intent  must  be  proved  or  estab- 
lished.1 The  element  of  contemplated  future  indebted- 
ness or  future  schemes  of  fraud  must  be  introduced.2 
While  a  conveyance  made  to  defraud  a  subsequent  judg- 
ment-creditor is  within  the  statute,3  it  seems  to  be  laid 
down  in  some  of  the  cases  that  subsequent  creditors  can 
only  avail  themselves  of  the  fraud  which  is  practiced 
against  them.4  In  Simmons  v.  Ingram,5  the  court  said  : 
"  To  make  a  deed  void  as  to  subsequent  creditors,  there 
must  be  proof  of  an  intent  to  defraud  them  ;  it  is  not 
sufficient  that  there  is  an  intent  to  defraud  others  whose 
debts  were  in  existence  at  the  time."  °  In  Florence  Sew- 
ing Machine  Company  v.  Zeigler,7  it  was  held  that  in 
order  to  avoid  a  sale  founded  upon  an  adequate  new  con- 
sideration—  that  is,  not  in  payment  of  an  antecedent 
debt  —  on  the  alleged  ground  that  it  was  made  to  hinder, 
delay  and   defraud   creditors,  the   creditor   attacking   the 


'Rose    v.    Brown.    11    \V.  Va.   134;  3  Hoffman  v.  Junk,    51  Wis.  614,8 

Shand  v.  Hanley,  71   N.  Y.  319-322;  N.  W.  Rep.  493. 

Burdick  v.  GK11.2  McCrary  1SS  ;  Flor-  4  Harlan  v.  Maglauglin,  90  Pa.  St. 
ence  S.  M.  Co.  v.  Zeigler,  58  Ala.  221  ;  293  ;  Snyder  v.  Christ,  39  Pa.  St.  499  ; 
Earlan  v.  Maglaughlin,  90  Pa.  St.  293.  Monroe  v.  Smith,  79  Pa.  St.  459  ;  Kim- 
See  Mullen  v.  Wilson,  44  Pa.  St.  416;  ble  v.  Smith,  95  Pa.  St.  69;  Haak's 
Partridge  v.  Stokes,  66  Barb.  <  X.  Y.)  Appeal,  100  Pa.  St.  62. 
586;   Berring  v.  Richards,  1  McCrary  60  .Miss.  898. 

574  :  City  Nat.   Bank  v.  Hamilton,  34  6  Citing  Hilliard  v.  Cagle,  46  Miss. 

X.  .1.  Eq.  160.     See  Chapters  V,  VI.  309;  Prestidge  v.  Cooper,  54  Miss.  74. 

96,  Eorbach  v.  Hill,  112  U.  Compare  Teed  v.  Valentine,  65  N.  Y. 

S.  Ill,  1  19  5  S.  (  !.  Rep.  81  :    Hilton  v.  474,  and  cases  cited. 

Morse  75Me.  258;  Neubergerv.  Keim,  :  58  Ala.  224.     See  Kellar   v.  Tay- 

184  N.  Y.  85,  31  N.  E.  Rep.  268.  lor,  90  Ala.  290,  7  So.  Rep.  907. 


§  203  RES   ADJ1   DI(  ATA. 

sale  must  show  two  things  :  first,  that  the  vendor  made 
the  sale  with  such  intent,  and  second,  that  the  purchaser 
participated  in  such  intent,  or  knew  of  its  existence,  or 
had  knowledge  of  some  fact  calculated  to  put  him  on 
inquiry,  and  which,  if  followed  up,  would  have  led  to  the 
discovery  that  the  vendor's  intent  was  fraudulent.1 

§  203.  When  question  of  intent  res  adjudicata.  —  In  Stock- 
well  v.  Silloway,2  the  Supreme  Court  of  Massachusetts 
said  :  "  To  prove  the  intent  of  the  defendant  in  making 
the  conveyances  alleged  to  be  fraudulent  in  the  charges 
filed  by  the  plaintiff,  it  was  competent  to  show  other 
fraudulent  conveyances  made  about  the  same  time,  and  as 
a  part  of  the  same  scheme  of  fraud.  For  this  purpose 
the  plaintiff  introduced  the  record  of  a  judgment  of  the 
Superior  Court  rendered  in  proceedings  between  the  same 
parties,  under  the  provisions  of  the  general  statutes  in 
relation  to  poor  debtors,  adjudging  the  defendant  guilty 
of  the  charges  therein  alleged  against  him.  The  plaintiff 
asked  the  court  to  rule  that  this  judgment  was  conclusive 
evidence  that  the  conveyances  set  forth  in  the  former 
case  as  fraudulent,  and  upon  which  the  defendant  was 
then  convicted,  were  fraudulent  as  alleged.  We  are  of 
the  opinion  that  the  court  erred  in  refusing  this  ruling. 
When  a  fact  has  once  been  put  in  issue  and  determined 
by  a  final  judgment  in  the  course  of  a  judicial  proceeding, 
such  judgment  is  conclusive  evidence  of  the  existence  of 
the  fact  in  all  controversies  between  the  same  parties  in 
which  it  is  material.  It  is  to  be  regarded  as  a  fixed  fact 
between  the  parties  for  all  purposes."1 


1  Crawford  v.  Kirksey,  55  Ala.  282  ;         B  See  Burlen  v.  Shannon,  99  Mass. 

Montgomery  v.  Bayliss,  96  Ala.  344,  200,  and  cases  cited  ;   Commonwealth 

11  So.  Rep.  198  ;  Edwards  v.   Reid,  39  v.  Evans,  101  Mass.  25  ;    Dennis'  I 

Neb.  646,  58  N.  W.  Rep.  202.  110  Mass.  18. 

2 113  Mass.  385. 


[NTENT    \    QUESTION    FOR   THE  JURY. 


204 


<  204.  Intent  a  question  for  the  jury.— The  question  of 
fraudulent  intent  is  almost  uniformly*  one  of  fact,1  to  be 
submitted  in  certain  cases  to  a  jury,"  and  it  is  regarded  as 
error  for  the  court  to  interfere  with  the  province  of  the 
jury  in  this  particular,  unless,3  as  we  have  seen,4  the  fraud 
is  apparent  on  the  face  of  the  instrument  from  a  legal  con- 
struction of  it,r>  and  is  so  manifest  that  but  one  conclusion 
can  prevail.  In  determining  the  intent  great  latitude  is 
allowed."  The  rule  as  to  submission  to  the  jury  is  not 
departed  from  even  in  strong  and  apparently  conclusive 
cases.  If  the  jury  err  the  verdict  may  be  set  aside. 
Thus,  in  Vance  v.  Phillips,'  it  appeared  that  an  insolvent 
merchant  sold  his  entire  stock  of  goods  to  an  infant,  who 
was  also  his  clerk  and  brother-in-law,  taking  the  infant's 
note  in  payment,  and  then  absconded.  A  verdict  of  a 
jury,  affirming  the  validity  of  the  transaction,  was 
promptly  set  aside  as  contrary  to  evidence.8  Especially 
will  the  verdict  be  overturned  where  it  is  apparent  that 
the  jury  must  have  misapprehended  the  evidence.9  By 
statute  in  New  York  the  question  of   fraudulent  intent  in 


:  Morgan  v.  Becker,  Tl  Cal.  543,16 
Pac.  Rep.  307  ;  Mackellar  v.  Pills 
bury,  18  Minn.  396,  51  N.  W.  Rep. 
223;  Billings  v.  Russell,  101  N.  Y. 
233,  I  N  E.  Rep,  531  ;  Citizens'  Bank 
v.  Bolen,  121  End.  301,  23  X.  E.  Rep. 
1  16.  In  Indiana  this  is  provided  by 
statute.  See  Sickman  \.  Wilhelm, 
180  Lnd.  180,  '.".I  X.  E.  Rep.  908  i  Per- 
Bonette  v.  Cronkhite,  1 10  lnd.  586,  W 
X    E.  Rep.  59. 

Weaver  v.  Owen  .  L6  <  Oregon  304, 
Weeksv.  Hill.  88  Me. 
\M    &  p.  778  .  II-  '.mii  v.  Com- 
mercial Banking  I  !o.,  10  Neb.  820,  59 
X.  W,  Rep  698  ;  Kaufer  v.  Walsh.  88 
Wia. 63,59  X.W.  Rep.  160;  Grimes  Dry 
Co.  v  Shaffer,  II    Neb.   1 12,  59 
X  \v    Rep.   tii     1  i.i\  in  -  \     1 
Ml  N  E.  Rep.  ii<;. 


3  Peck  v.  Grouse,  46  Barb.  (N.  Y.) 
151;  Monteith  v.  Bax,  4  Neb.  171; 
Vance  v.  Phillips,  6  Hill  (N.  Y.)  433; 
Eobbs  v.  Davis,  50  Ga.  214;  Murray 
v.  Burtis,  15  Wend.  (X.  Y.)  214  :  Syra- 
cuse Chilled  Plow  Go.  v.  Wing,  85  N. 
Y.  126  ;  Van  Bibber  v.  Matins,  52  Tex. 
109  :  Winchester  v.  Charter,  102  Mass. 
272  :  Peiser  v.  Peticolas,  50  Tex.  638. 

1  See  §§  8,  9,  10. 
Van    Bibber  v.    Mathis,     52  Tex. 
409. 

'  Winchester  v.  Charter,  102  Mass. 
276. 

6  Hill  (N.  Y.)  433. 

8 See  also  Dotld  v.  McCraw,  s  .\rk. 
83:  Potter  v  Payne,  21  Conn.  362; 
Marston  v.  Vultee,  L2  .\hl».  Pr.  (N. 
Y.)  143. 

Edwards  v.  Currier,  43  Me.  474. 


§  204  INTENT   A    QUESTION   FOR   THE   JURY.  369 

these  cases  "  shall  be  deemed  a  question  of  fact,  and  not 
of  law,"  *  and  it  was  strenuously  claimed  in  behalf  of  the 
vendee,  in  the  widely  known  case  of  Coleman  v.  Burr," 
that  there  was  no  finding  by  the  referee  of  a  fraudulent 
intent ;  but  that,  on  the  contrary,  he  had  found  the  whole 
transaction  to  be  fair  and  honest,  and  that,  therefore,  the 
transaction  should  stand.  The  court  say,  however,  that 
the  referee  has  "  found  facts  from  which  the  inference 
of  fraud  is  inevitable,  and  although  he  has  characterized 
the  transactions  as  honest  and  fair,  that  does  not  make 
them  innocent,  nor  change  their  essential  character  in  the 
eye  of  the  law.  Mr.  Burr  [the  debtor]  must  be  deemed 
to  have  intended  the  natural  and  inevitable  consequences 
of  his  acts,  and  that  was  to  hinder,  delay  and  defraud  his 
creditors."  3  This  principle  has  already  been  discussed  in 
the  opening  chapter,4  but  in  view  of  the  peculiar  wording 
of  the  New  York  statute,  it  is  deemed  important  to  give 
the  construction  placed  upon  it  by  the  court  of  final 
resort.5  In  Bulger  v.  Rosa,6  the  court  says  :  "  The  stat- 
ute relating  to  fraudulent  transfers  and  conveyances, 
which  declares  that  the  question  of  fraudulent  intent  aris- 
ing thereunder  shall  be  deemed  a  question  of  fact,  and 
not  of  law,7  does  not,  as  now  interpreted,  interfere  with 
the  prerogative  of  the  court  to  direct  a  verdict,  provided 
the  fraudulent  intent  is  conclusively  established  on  the 
face  of  the  instrument  of  transfer,  or  by  the  uncontra- 
dicted verbal  evidence."  8 


1  2  N.  Y.R.  S.  137,  §  4.  Williams,  24  N.  Y.  359  :  Babcock  v. 

2  93  N.  Y.  31  ;  Bulger  v.  Rosa,   119  Eckler,  24  N.  Y.  623,  632. 
N.    Y.    459,  24  N.  E.  Rep.  853.     See  '  See  §§  9,  10. 

Neisler  v.  Hai'ris,   115  Ind.  565,  18  N.  ■'  See,  as  to  intent  to  violate  usury 

E.  Rep.  39.  statutes,  Fiedler  v.  Damn,  50   X.  Y. 

3  Citing  Bump  on  Fraud.  Con  v.  (3d  438. 

ed.)  22,  24,  272,  278;   Cunningham  v.  "  119  N.  V.   164,  .*  I  N.  E.  Rep.  858. 

Freeborn,  11  Wend.  (N.  Y.)  241  ;  Ed-  7  2  R.  S.  137,  §  4. 

gell  v.   Hart,   9  N.   Y.   213;  Ford  v.  "Citing  Ed-ell  \ •.  i lar! .  9  N.  Y  213; 


Ford  v.  Williams,  24  X.  Y.  359. 


24 


370  riFYING   AS   TO    INTENT.  §  205 

§  205.  Testifying  as  to  intent.  —  A  party  called  as  a  wit- 
ness may  testify  as  to  his  intention  in  performing  an  act 
where  such  intention  becomes  material.1  The  purchaser 
or  vendee  may,  in  answer  to  a  question,  testify  directly 
that  he  did  not  have  any  fraudulent  intent,  and  that  the 
purchase  was  made  by  him  in  good  faith.  That  it  is 
proper  to  put  such  a  question  to  the  purchaser  was 
directly  decided  in  the  case  of  Bedell  v.  Chase,3  though 
the  contrary  seems  to  be  held  in  Minnesota,3  and  Ala- 
bama.4 In  Blaut  v.  Gabler,5  this  question  was  asked  : 
••  Had  anything  transpired  between  Blaut  and  yourself  — 
conversation  or  otherwise  —  whereby  you  gave  him  to 
understand,  or  whereby  it  was  understood,  that  the  trans- 
action was  for  an  improper  purpose,  or  the  purpose  of 
defrauding  your  creditors  ?  "  The  court  decided  that  the 
question  was  properly  excluded  upon  the  theory  that  it 
did  not  call  for  a  statement  of  the  witness  as  to  his  intent 
to  defraud,  but  went  far  beyond  this,  and  asked  for  a  con- 
clusion from  what  had  transpired.  The  question  was 
characterized  as  being  indefinite  and  complicated,  and  as 
not  coming  within  the  rule  which  sanctions  an  inquiry  as 
to  the  intent  of  a  party.  As  a  general  rule,  it  is  proper 
to  allow  the  parties  to  testify  concerning  their  intentions,6 


'Graves   v.   Graves,  45  X.    II.  323.  3  Hathaway    v.    Brown,    18    Minn. 

Hale    v.   Taylor,    15   X.  H.  406;  Ml.     See  also  Minis  v.   Carpenter,  4 

Royce  v.  Gazan,  76  Ga.  79;  Sedgwick  Col.  App.  :J0,  34  Pac.  Rep.  1011. 

v.    Tucker,  90   Ind.  281;   Gardoni   v.  '  Hinds  v.   Keith,  5?    Fed.  Rep.  10, 

W I  ward,  44  Kan   758,  25  Pac.  Rep.  6  C.  C.  A..  231 ;  McCormick  v.  Joseph, 

r.i'.i.  cf.  Sweeney  v.  Conley,  71  Tex.  77  Ala  236;   Richardson  v.  Stringfel- 

548  9  8.  W.  Rep.  548    Bice  v.  Rogers,  low,  100  Ala.  416,  14  So.  Rep.  283. 

52  Kan.  207,  34  Pac.  Rep    796;   Phifer  11  X.  V.  465. 

*in,  100  N.C.  59,6  S.  E.  Rep.  672;  •  Bedell    v.   Chase.  34   N.   Y.   388; 

Gentry  r.Kelley,  19  Kan.  82, 30  Pac.  Griffin   v.    Marquardt,  21  N.  Y.  121; 

Rep.  186;  Seymour  v.  Wilson,   11   X.  Snow  v.  Paine,  114  Mass.  520;  Thacher 

''■'■     Compare  Cake  >     Pottsville  v.  Phinney,  7  Allen  (Mass.)  146;  Sey- 

Bank,  116              564,  9  Atl    Rep.  302 ;  mour  v.  Wilson,  14  N.  Y.  567.  An  ac- 

Dillon  v.  Anderson,  13  N    Y  cused  person  may  testify- as  to  his  in- 

3tarin   \.  Kelly,  ~>  tention  in  receiving  a  certain  sum  of 

money.    Peoplev.  Baker,96N.  V.  340. 


206 


PROVING   INII  \  1  . 


37 ' 


though  this  class  of  testimony  is  necessarily  subjected  to 
close  scrutiny.  When  the  circumstances  present  conclu- 
sive evidence  of  a  fraudulent  intent,  no  proof  of  innocent 
motives,  however  strong,  will  overcome  the  presumption  ; 
but  where  the  facts  do  not  necessarily  prove  fraud,  but  only 
tend  to  that  conclusion,  the  evidence  of  the  party  who 
made  the  conveyance,  when  he  is  so  circumstanced  as  to 
be  a  competent  witness,  should  be  received  for  what  it 
may  be  considered  worth.1  It  is  believed,  however,  not 
to  be  proper  to  allow  a  witness  to  testify  concerning  the 
intent  or  motive  of  another  person,2  even  though  he  be 
an  agent  and  has  full  knowledge  of  the  transaction.1 

§206.  Proving  intent.  —  The     intent    must    be    gathered 
from  all  the  circumstances.4     In  King  v.  Poole,5  the  court 


1  Seymour  v.  Wilson,  14  N.  Y.  569, 
570 ;  s.  P.  Edwards  v.  Currier,  43  Me. 
474 ;  Forbes  v.  "Waller,  25  N.  Y.  430  : 
Wheelden  v.  Wilson.  44  Me.  1  ;  Miner 
v.  Phillips,  42  111.  123. 

2  See  Hathaway  v.  Brown,  22  Minn. 
216  ;  Peake  v.  Stout,  8  Ala.  647.  "  It 
is  not  competent  for  one  person  to 
state  the  motives  influencing  the  con- 
duct of  another.'"  Riley  v.  Mayor,  etc. 
of  N.  Y.,  96  N.  Y.  337.  And  it  was 
said  in  the  case  last  cited  that :  "Evi- 
dence of  a  secret  and  undisclosed  in- 
tent, entertained  by  one  party  at  the 
time  of  the  making  of  a  contract, 
either  express  or  implied,  is  not  ad- 
missible to  vary  the  legal  presump- 
tions arising  from  the  acts  and 
conduct  of  the  parties."  Riley  v. 
Mayor,  etc.,  of  N.  Y.,  96  N.  Y.  339. 
See  Talcott  v.  Hess,  31  Hun  (N.  Y. ) 
285.  In  Tooley  v.  Bacon,  70  N.  Y. 
37.  the  defense  was  that  the  properly 
was  placed  in  the  intestate's  hands 
for  the  purpose  of  defrauding  cred- 
itors. Eaid,  J. ,  said  :  "  The  plaintiff 
could  not  be  examined  as  a  witness 
'  in  regard  to  any  personal  transaction 


or  communication'  between  him  and 
Bacon.  The  placing  of  property  in 
the  hands  of  Bacon  was  a  personal 
transaction  with  him.  and  the  intent 
with  which  it  was  dour  accompanied 
and  characterized  the  transaction  and 
was  an  element  thereof.  A  witness 
examined  as  to  such  intent  must, 
within  the  meaning  of  the  Code,  be 
held  to  be  examined  in  regard  to  the 
transaction.  There  is  the  same  reason 
for  excluding  the  living  party  from 
testifying  as  to  the  intent  with  which 
a  personal  transaction  with  a  deceased 
party  was  performed,  as  for  exclud- 
ing him  as  a  witness  to  any  other 
part  of  the  transaction."  See  Hard 
v.  Ashley,  u;  X.  V.  619, 33N.  I'..  Rep 
177. 

3  Rindskopf  v.  Myers,  77  Wis. 
049,  46  N.  W.  Rep.  sis 

4  Zimmer  v.  Miller,  64  Md.  896,  I 
Atl.  Rep.  858;  Ecker  v.  McAllister, 
45  Md.  309;  Lincoln  Exec's  v.  Foster, 
45  U.  S.  App.  623 

'-  61  Ga.  874.  See  Kempner  v. 
Churchill,  8  Wall.  369. 


572  PROVING    INTENT.  §  2C>6 

said  :  "  In  investigating  an  alleged  fraud,  the  relevancy 
of  a  given  fact  does  not  depend  upon  its  force,  but  upon 
its  bearing.  Does  it  bear,  either  directly  or  indirectly, 
with  any  weight  whatever,  on  the  main  controversy  or 
any  material  part  of  it  ?  Not  only  is  fraud  subtle,  but 
that  ingredient  of  a  transaction  which  renders  it  fraud- 
ulent in  fact,  namely,  intention,  is  covered  up  in  the 
breast,  hidden  away  in  the  heart.  Outward  manifesta- 
tions of  it  may  be  slow  in  appearing,  and  when  they  do 
appear,  may  be  dim  and  indistinct.  To  interpret  their 
meaning,  or  the  full  meaning  of  any  one  of  them,  it  may 
be  necessary  to  bring  them  together  and  contemplate 
them  all  in  one  view.  To  do  this,  one  has  to  be  picked 
up  here,  another  there,  and  so  on  till  the  collection  is 
complete."  *  Great  latitude  is  allowed.2  On  an  inquiry 
as  to  the  state  of  mind,  sentiments,  or  disposition  of  a  per- 
son at  a  particular  period,  his  declarations  and  conver- 
sations are  admissible.3  In  concluding  this  chapter  we 
may  recall  to  the  reader's  attention  the  rule  promulgated 
in  some  of  the  cases  that,  if  a  transaction  is  entered  into 
for  the  purpose  of  defrauding  any  creditor,  it  is  voidable 
at  the  suit  of  all  creditors.4 


Burdick     v.    Gill,     7     Fed.     Rep.  Riddell  v.  Munro,  49  Minn.  532,  52  N. 

W.  Rep.   141. 

Winchester   v.  Charter,  102  Mass.  3  1  Greenleaf's  Ev.  §108;  Tyler  v. 

Rea    \.   Missouri,    L7  Wall.  542;  Angevine,  15  Blatch.   537  :  Baker  v. 

3V.  Beeman~87   Mich.   481,   4!)  Kelly,  41  Miss.  703. 

N.  W.  Rep.  483  ;  Gumberg  v.  Treusch,  'Allen    v.    Rundle,    50    Conn.  31. 

l"::  Mich.   544,   61   X.    W.  Rep.  872;  See  Warner  v.  Percy,  22  Vt.  155. 


CHAPTER  XV. 

CONSIDERATION. 

§  207.  Concerning    consideration   and  I  £  215.   Moral  obligations 


good  faith. 

208.  Voluntary  conveyances. 

209.  What  is  a  valuable  considera- 

tion ? 

210.  Love  and  affection. 

211.  Transfer  for  grantor's  benefit. 
211a.  Exchange  of  property. 

212.  Ante-nuptial  settlement  —  Mar- 

riage as  consideration. 

213.  Illicit  intercourse. 

214.  Illegal  consideration. 


216.  Individual    and     copartnership 

debts. 

217.  Future  advances. 
217a.  Gifts  to  charity. 

218.  Services  by  members  of  a  family. 

219.  Proof  of  consideration. 

220.  Recitals  of  consideration  as  evi- 

dence. 

221.  Explaining  recitals. 

222.  Sufficient  consideration. 

223.  Insufficient  consideration. 


"Almost  invariably  some  honest  consideration  is  made  the  agency  for  floating  a  scheme  of 
fraud  against  creditors."     Finch,  J.,  in  Baldwin  v.  Short,  125  N.  V.  553,  560,  26  N.  E.  Rep.  928. 

§  207.  Concerning- consideration  and  good  faith — Consid- 
eration has  been  said  to  consist  "either  in  some  right,  in- 
terest, profit,  or  benefit  accruing  to  the  one  party,  or  some 
forbearance,  detriment,  loss,  or  responsibility,  given,  suf- 
fered, or  undertaken  by  the  other."  '  It  is  not  essential 
that  the  payment  of  the  consideration  be  in  money  ;  it 
may  be  made  in  anything  of  value.3  The  subject  cannot 
be  here  considered  from  an  elementary  point  of  view  in  all 
its  ramifications,  but  some  of  its  general  bearings  upon 
our  particular  topic  will  be  briefly  noticed.  It  will  be 
found  upon  investigation  that,  generally  speaking,  the 
question  of  consideration  becomes  important  in  the  class 
of  litigation  under  discussion  only  in  bona  fide  transac- 
tions. If  the  alienation  is  effected  with  a  mutual  design 
to  hinder,  delay  or  defraud  creditors,  the  presence  of  even 
the  most  bounteous  or  adequate  consideration  3  will   not 


1  Currie  v.  Misa,  L  R.  10  Exch.  162.  a  Billings  v.  Russell,  101    X.  V.  882, 

•-'  Taylor  v.   Miles,  19  Ore.   550,  553,       4  N.  E.  Rep.  531, 
25  Pac.  Rep.  143. 


574 


CONSIDERATION    AM)   GOOD    FAITH. 


§207 


save  or  cure  it.1  Thus  a  mortgage  though  given  for  a 
just  debt  may  be  assailed  as  fraudulent.2  Unilateral  evil 
intent  will  not,  of  course,  suffice  to  overturn  the  transac- 
tion.3 "Mala  fides"  says  Mr.  May,  "supersedes  all 
inquiry  into  the  consideration,  but  bona  fides  alone  is  not 
always  sufficient  to  support  a  transaction  not  founded  on 
any  valuable  consideration."4  The  inadequacy  of  the 
consideration,  as  is  elsewhere  shown,  is  not  a  matter  which 
the  court  will  go  into,  except  in  so  far  as  it  may  con- 
stitute evidence  tending  to  show  that  the  transaction  was 
a  sham:"'  and  the  law  will  not  "weigh  consideration  in 
diamond  scales."'  Though  grossly  inadequate  consider- 
ation will  render  a  conveyance  fraudulent,7  the  avoidance 
maybe  only  to  the  extent  ot  the  inadequacy.8  Generally 
speaking,  as  we  have  already  seen,  the  question  whether 
a  conveyance  is  fraudulent  or  not  depends  upon  its  being 


See  Chap.  XIV.  Billings  v.  Rus- 
sell.  10.  N.  Y.  282,  4  N.  E.  Rep. 
531;  Boyd  v.  Turpin,  94  X.  < '.  137  ; 
Landauer  v.  Mack,  43  Neb.  430, 
ill  N.  W.  Rep.  597:  Gillespie  v. 
Allen,  37  \Y.  Va.  <;:.->,  1?  S.  E.  Rep. 
1 v  1  ( Sable  v.  ( iolumbus  t  ligar  ( !o  . 
IK)  ln.i.  563,  566,  38  N.  E.  Rep.  174. 
citing  the  text.  In  Bradley  v.  Rags- 
dale,  <;i  Ala.  559,  ilii'  court  says:  "If 
tin'  conveyance  !>••  upon  a  valuable 
consideration,  then  tin-  question  of 
intent  becomes  pn  iniinentrj  material. 
The  consideration  may  lie  paid  in 
nn.ij.v  —may  \»-  valuable  ami  fully 
adequate,  3  el  it  il  was  made  '  with 
intent  i>>  binder,  delay,  or  defraud 
creditors,  purchasers  or  other  per- 
sons, of  their  law  lu I  ^niis,  damages, 
forfeitures,  debts,  or  demands,'  it  is 
void  and  stands  for  nothing."  Citing 
Codeol  1876,  .:  2124  .  Planters'  &  M. 
Bank  \.  Borland,  5  Ala  581  ;  <  !um- 
\.    Met  lullough,    •">    Ala     :;■.')  : 


Hubbard  v.  Allen,  5!)  Ala.  283; 
Howell  v.  Mitchell,  in  manuscript. 

-  Billings  v.  Russc-ll,  101  N.  Y.  -233. 
1  X.  E.  Rep.  531;  Syracuse  Chilled 
l'h.w  Co.  v.  Win-.  85  X.  Y.  421,  42G  ; 
Schmidt  v.  Opie,  33  X.  J.  Eq.  141  : 
Blennerhassett  v.  Sherman,  105  U. 
S.  117. 

;  Prewit  v.  Wilson,  103  U.  S.  24  ; 
Wood  v.  Stark.  1  Hawaiian  Rep.  10; 
Herring  v.  Wickham,  29  Graft.  (Va  1 
628     See  chap.  XIV. 

'  .May  on  Fraud.  Conveyances,  p.  23:5. 

6  Per  Sir  W.  M.James,  in  Bayspoole 
v.  Collins.  IS  W.  R.  730. 

1  Per  Lord  Talbot,  as  quoted  bj 
Wilmot.  ('.  J.,  in  Roe  v.  Mitton,  2 
\\'il>.  858  n 

'Singree  v.  Welch,  32  Ohio  St.  320; 
Cable  \.  Columbus  cigar  Co.,  140 
[nd.  568,  568,  38  X.  E  Rep.  474.  See 
[looker  v.  Rooker,  •.".»  Ohio  St.  1. 

■  Jamison  v.  McNally,  21  OhioSi  ',".'■"> 
See  Black  v.  Kuhlman,  30  Ohio  St.  196. 


§  208  VOLUNTARY    CONVEYANi  J75 

made  upon  good  consideration  and  bona  fide.  It  is  not 
sufficient  that  it  be  upon  good  consideration  or  bona  fide; 
it  must  be  both.1  The  separation  of  these  elements  is 
fatal  to  the  transaction  as  against  creditors.'-  This  rule  is 
concisely  stated  in  a  case  of  much  importance  in  the 
United  States  Supreme  Court.  "  It  is  not  enough,"  says 
Woods,  J.,  "  in  order  to  support  a  settlement  against  cred- 
itors, that  it  be  made  for  a  valuable  consideration.  It 
must  be  also  bona  fide.  If  it  be  made  with  intent  to  hin- 
der, delay,  or  defraud  them,  it  is  void  as  against  them, 
although  there  may  be  in  the  strictest  sense  a  valuable  or 
even  an  adequate  consideration," 3  unless  at  least  the 
creditor  has  obtained  the  benefit  of  the  consideration.4 
"  Forms,"  said  Elliott,  J.,  in  a  well  considered  case,  "are 
of  little  moment,  for  where  fraud  appears  courts  will  drive 
through  all  matters  of  form  and  expose  and  punish  the 
corrupt  act.  A  conveyance  is  not  protected,  although 
full  consideration  is  paid,  where  grantor  and  grantee 
unite  in  a  fraudulent  design  to  defraud  creditors."5  The 
vendee  will  be  protected  only  to  the  extent  of  the  consid- 
eration parted  with  before  notice  of  the  fraud.6 

§  208.    Voluntary  conveyances.  —  It  is   perhaps  unneces- 
sary to  observe  that  a  voluntary  conveyance  "implies  the 


1  Sayre  v.   Fredericks,  16  N.  J.  Eq.  Bunn  v.  Ahl,  29  Pa.  St.  387  ;  Root   v. 

209;    Schmidt  v.   Opie,  33  N.    J.  Eq.  Reynolds,   32   Vt.    139 ;  Kempner    v. 

141;  Billings    v.    Russell.    101  N.   Y.  Churchill,  8  Wall.  362;  Kerr  on  Fraud 

232,  4   N.    E.    Rep.     531,    citing    the  &  Mistake,  p.  200  ;  Davis  v.  Schwartz, 

text.  1. 55  U.  S.  639,  15  S.  C.  Rep.  2 

-  See  §  15.  4  Davis  v.  Schwartz,  155   D".  S.  689. 

3  Btennerhassett  v.  Sherman,  105  U.  15  S.  C.  Rep.  237. 

S.  117.     SeeTwyne's  Case,  3  Rep.  80,  5  Buck  v.  Voreis,  89  [nd.  117  :  Bil- 

2  Coke  212;  Holmes  v.    Penney,    3  lings  v.   Russell,  101   N.    Y.  226,    I  X. 

Kay   &  J.  90  ;  Gragg  v.    Martin,  12  E.  Rep.  531.  See  Baldwin  v.  Short,  125 

Allen  (Mass.)  498  ;  Brady  v.  Briscoe,  N.  Y.  559,  26  N.  E.  Rep.  928. 

2   J.J.    Mar.    (Ky.)   212;  Bozman   v.  6  Hedrick  v.   Strauss,   42    Neb.   192, 

Draughan,  3  Stew.  (Ala.)  243  ;  Farm-  60  N.  W.    Hep.  928;  Bush  \.   Collins, 

ers'Bankv.    Douglass,  19  Miss.  469;  35  Kan.  535,  11  Par.  Rep.  425. 


Ij6  VOLUNTARY  CONVEYANCES.  §  208 

total  want  of  a  substantial  consideration,"  ]  or  "  is  a  deed 
without  any  valuable  consideration."  ~  Such  a  transfer 
is  more  easily  susceptible  to  attack  than  a  conveyance 
founded  upon  an  adequate  consideration  ;  for  a  transfer 
by  a  debtor  without  consideration,  made  for  the  purpose 
of  defrauding  his  creditors,  can  be  impeached  by  the 
creditors  for  fraud,  even  though  the  grantee  was  ignorant 
of  the  fraudulent  purpose  for  which  the  covinous  convey- 
ance was  given.3  The  onus  of  establishing  a  fraudulent 
intent  is  not  so  great.  In  Lee  v.  Figg  4  the  court  observed 
that  whether  the  voluntary  alienee  participated  in  and 
aided  the  covinous  intent  or  not  was  immaterial ;  u  he  was 
not  a  purchaser  in  good  faith.  "  The  distinction  may  be 
restated  as  follows  :  A  voluntary  gift  or  settlement  is 
voidable  if  it  was  the  intent  of  the  maker  to  hinder,  delay, 
or  defraud  creditors,  whether  the  party  who  received  the 
gift  participated  in  the  fraudulent  intent  or  not  ;  an  abso- 
lute conveyance  for  a  valuable  consideration  is  good, 
notwithstanding  the  intent  of  the  maker  to  defraud, 
unless  the  other  party  participated  in  the  fraud.5  We 
have  elsewhere  shown  that,  in  the  majority  of  the  cases, 
a  voluntary  alienation  is  regarded  as  presumptively  fraudu- 
lent as  to  existing  creditors,'1  while  in  other  cases  this 
presumption  is  conclusive.7  Where,  however,  a  corpo- 
ration, or  individual,  perfectly  solvent  at  the  time,  and 
having  no  actual  intent  to  defraud  creditors,  disposes  of 
lands  or  property   for  an  inadequate   consideration,  or  by 


'Washband   v.  Washband,  27  Conn.  *37Cal.  336. 

181.  Lassiter  v.  Davis,  64  N.  C.  498. 

•Seward  v.  Jackson,  8  Cow.  (N.  Y  ''Lloyd  v.   Fulton,   91    U.    S.  485; 

180.  Holden    v.    Burnham,    63  N.    Y.   74; 

'Lee                   n  Cal.  828;  Beecher  Dunlap  v.   Hawkins,   59    N.  Y.  342; 

v.  <'lark.  12  Blatchf.  256;  Laughton  v.  Dminebaum  v.  Tinslev.  54  Tex.  365. 

Harden,  68  Me.  318;Mohawk  Bank  v.  'City  Nat.  Bank  v.  Hamilton.  34  N. 

Uwater,                             .1    Bitchcock  J.   Eq.   160.     Compare   McCanless   v. 

■■.  Kielj  .  11  Conn.  611;  ( larterv.  Grim-  Flinchurn,  89  N.  C.  373. 
19  V  II    loo.     s..,.  Chap.  XIV. 


§  20Q  VALUABLE   CONSIDERATION.  ^jy 

a  voluntary  conveyance,  subsequent  creditors  of  the  cor- 
poration cannot  question  the  transaction.1  If,  as  we  have 
seen,  it  was  made  with  the  design  to  defraud  subsequent 
creditors,  this  will  render  it  fraudulent.  It  must  be 
remembered,  however,  that  in  New  York  the  question  of 
fraudulent  intent  is  in  all  cases  to  be  deemed  a  question 
of  fact,  and  not  of  law,  and  it  is  declared  that  no  convey- 
ance or  charge  shall  be  adjudged  fraudulent  as  against 
creditors  or  purchasers  solely  on  the  ground  that  it  was 
not  founded  on  a  valuable  consideration.2  It  is  not 
per  se  void  even  as  to  existing  creditors,3  and  the  burden 
of  proof  that  the  deed  left  the  debtor  insolvent  is  on  the 
plaintiff.4  In  California  the  New  York  rule  prevails,  and 
a  voluntary  conveyance  is  not  presumptively  fraudulent 
even  as  against  existing  creditors.5 

§  209.  What  is  a  valuable  consideration? — Much  has  been 
said  concerning  the  true  import  of  the  expression  "  a  valu- 
able consideration."  It  may  be  other  than  the  actual 
payment  of  money,  and  may  consist  of  acts  to  be  done 
after  the  conveyance,0  or  of  a  note  on  promise  to  pay,7 
or  of  a  pre-existing  debt,8  or  of  an  assumption  of  lia- 
bility.9 A  moneyed  consideration  for  an  assignment 
of  goods  greatly  disproportionate  to  the  value  of  the 
property  transferred,  would   not    take  a  conveyance  out 


1  Graham  v.  Railroad  Company,  102  N.  E.  Rep.  105.  See  also  Phelps  v. 
U.  S.  148;  Rudy  v.  Austin,  56  Ark.  Smith,  116  Ind.  387,  17  N.  E.  Rep.  602, 
73,  19  S.  W.  Rep.  111.  19  Id.  156. 

2  Babcock  v.  Eckler,  24  N.  Y.  629  :  5  Windhus  v.  Boot/.,  92  Cal.  617, 
Dunlap  v.  Hawkins,  59  N.  Y.  345  ;  28  Pac.  Rep.  557  :  Bull  v.«  Bray.  89 
Dygert   v.  Remerschnider,    32  N.  Y.  Cal.  286,  26  Pac.  Rep.  873. 

629.     Compare  Coleman  v.   Burr,  93  6  Stanley  v.  Schwalby,  162 U.  S.  376, 

N.  Y.  31;  Genesee  River  Nat.  Bank  v.  16  S.  C  Rep.  754. 

Mead,    92  N.    Y.    637;  Emmerich   v.  '  Weaver  v.  Nugent,  72  Tex.  278, 10 

Hefferan,  21  J.  &  S.  (N.  Y.)  101;  Jack-  S.  W.  Rep.  458. 

son  v.  Badger,  109  N.  Y.  632,  16  N.  E.  8  McMurtrie  v.   Riddell,  '.»  I  !ol.    197, 

Rep.  208.  13   Pac.    Rep.  181;  Redpath  v.   Law- 

3  Dygert  v.  Remerschnider,  32  N.  Y.  rence,  42  Mo.  App.  101. 

629.  9Smith   v.   Spencer,    ?::    \l.-i.   299; 

4  Kain  v.  Larkin,  131  N.  Y.  300,  30  Page  v.  Dillon  (Vt.)  18  Atl.  Rep.  814. 


VALUABLE    CONSIDERATION.  §209 

of  the  statute  against  covinous  alienations.  The  con- 
sideration must  be  adequate  ;  not  that  the  courts  will 
wt-i'li  the  value  of  the  eoods  sold  and  the  price  received 
in  very  nice  scales,  but  after  considering  all  the  circum- 
stances they  will  hold  that  there  should  be  a  reasonable 
and  fair  proportion  between  the  price  and  the  value. 
Cases  in  which  the  question  of  inadequacy  of  consider- 
ation arises  between  the  grantor  and  grantee  of  a  deed, 
where  suit  is  instituted  for  the  purpose  of  setting  aside 
the  grant  on  the  ground  of  imposition,  are  not  applicable 
in  determining  a  question  of  the  fairness  of  a  consider- 
ation between  a  vendee  and  creditor  under  the  statute 
concerning  fraudulent  conveyances.  Such  inadequacy  of 
consideration  as  would  induce  a  court  to  set  aside  a  con- 
veyance at  the  instance  of  the  grantor  on  the  ground  of 
imposition,  presents  an  entirely  different  question  from 
that  degree  of  inadequacy  which  would  avoid  an  assign- 
ment on  the  ground  of  fraud,  in  a  suit  instituted  by 
a  creditor  or  purchaser  against  the  alleged  fraudulent 
assignee.  A  grantor  must  of  necessity  make  out  a  stronger 
case,  calling  for  the  interference  of  the  courts,  than  a 
creditor,  because  the  latter  is  not  a  participant  in  the  trans- 
action, is  guilty  of  no  negligence  or  fraud,  and  belongs  to 
a  favored  class.  Unreasonable  inadequacy  of  price  is 
evidence  of  a  secret  trust,  and  it  is  said  to  be  prima  facie 
evidence  that  a  conveyance  is  not  bona  fide  if  it  is  accom- 
panied with  any  trust.1  In  Cook  v.  Tullis  ~  the  court  ob- 
served that  "  a  fair  exchange  of  values  may  be  made  at 
any  time,  even  if  one  of  the  parties  to  the  transaction  be 
insolvent."8 

It  is  said  in  the  New  York  Court  of  Appeals  that  a 
valuable  consideration  is  something  mutually  interchanged 
between  the  parties,  and  that  it  is  not  necessary  that  the 

KuykendaU  v.  McDonald,  15  Mo.  18  Wall.  340. 

»See  Stewart  v.  Piatt,  101  U.  S.  738. 


§  2IO  LOVE   AND    AFFECTION.  $Jij 

subject-matters  should  be  of  equal  values.1  An  assump- 
tion by  a  surety  of  the  debt  of  his  principal  constitutes  a 
valuable  consideration."  It  is  also  established  that  a 
gratuity  cannot  be  subsequently  converted  into  a  debt  so 
as  to  become  the  consideration  of  a  conveyance  made  by 
the  grantor  to  the  injury  of  his  creditors.3  A  covenant 
from  which  the  covenantor  may  be  relieved  by  reason  of 
the  failure  of  the  transfer  for  which  it  was  made  is  not  a 
valuable  consideration.4  An  insignificant  or  practically 
nominal  consideration  will  not  make  the  vendee  a  pur- 
chaser for  valuable  consideration  under  the  New  York 
Recording  Act.5 

§  210.  Love  and  affection.— In  Mathews  v.  Feaver6  Sir 
Lloyd  Kenyon  said  :  "  This  is  a  transaction  between  the 
father  and  the  son,  and  natural  love  and  affection  is  men- 
tioned as  part  of  the  consideration,  upon  which,  as  against 
creditors,  I  cannot  rest  at  all.  It  is  true  it  is  a  consider- 
ation which,  though  not  valuable,  is  yet  called  meritorious, 
and  which  in  many  instances  the  court  will  maintain,  but 
not  against  creditors."  Natural  love  and  affection  is  a 
sufficient  consideration  7  for  a  gift  or  voluntary  transfer 
between  a  brother  and  a  sister,8  but  as  a  general  rule  a 
conveyance  for  such  a  consideration  cannot  be  supported 
against  the   rights  of  existing  creditors.9     It  was  said  in 


1  Dygert  v.  Remerschnider,  32  N.  Y.  Yardley  v.  Torr,  67  Fed.  Rep.  857.     In 
642.  Scott  v.  Davis,  117  Ind.  233,  20  N.  E, 

2  Pollock  v.  Jones,  96  Ala,  492,  11  Rep.  139,  the  court  says:  "A  convej 
So.  Rep.  529.  ance    is  not  fraudulent  because  the 

3  Clay  v.  McCally,  4  Woods  605.  purchaser,  in   addition     to    the   con- 

4  Arnold    v.    Hagerman,    45  N.  J.  sideration  paid  in   money  and  notes 
Eq.  200,  7  Atl.  Rep.  93.  to  third  persons,  agrees  to  support  Ins 

s  Ten  Eyck  v.  Witbeck,  135  N.  Y.  father  and  mother  during  their  life- 

40,  31  N.  E.  Rep.  994.  time;   nor  does  such  an    agreement 

6  1  Cox  Eq.  Cas.  278.  280.  constitute  a  secret  trust  invalidating 

7  See  Bliss  v.  West,  58  Hun  (N.  Y.)  the  conveyance,  in  cases  where  it  is 
75,  11  N.  Y.  Supp.  374.  otherwise  supported  l>>   an  adequate 

8  Anderson  v.  Dunn,  19  Ark.  658.  consideration,  anil  the  grantee  is  not 

9  Moreland  v.  Atchison,  34  Tex.  351;  [guilty  of  fraud." 


;8o 


LOVE   AND   AFFECTION. 


§2IO 


H hide's  Lessee  v.  Longworth,1  and  the  rule  is  still  good, 
that  "a  deed  from  a  parent  to  a  child,  for  the  consider- 
ation of  love  and  affection,  is  not  absolutely  void  as 
against  creditors.  It  may  be  so  under  certain  circum- 
stances ;  but  the  mere  fact  of  being  in  debt  to  a  small 
amount  would  not  make  the  deed  fraudulent,  if  it  could 
be  shown  that  the  grantor  was  in  prosperous  circum- 
stances, and  unembarrassed,  and  that  the  gift  to  the  child 
was  a  reasonable  provision  according  to  his  state  and  con- 
dition in  life,  and  leaving  enough  for  the  payment  of  the 
debts  of  the  grantor."  The  same  principle  appertains 
generally  to  conveyances  founded  upon  such  consider- 
ation.2 A  conveyance  by  a  husband  to  a  wife,  made  in 
consideration  of  love  and  affection  and  her  promise  to 
pay  certain  preferred  claims  and  to  support  him,  will  not 
be  upheld  against  creditors.3 


1  11  Wheat.  213.  The  same  rule 
applies  to  a  conveyance  to  an  illegiti- 
mate child.  An<ni\  iiimis,  1  Wall,  .Jr. 
107,  1  Fed.  Cases,  1027. 

Good  and  valuable  considera- 
tion.—  Judge  Story  observes  (1  Story's 
Eq.  Jur.  i  354)  :  "  A  good  considera- 
tion is  sometimes  used  in  the  sense 
<>f  a  consideration  which  is  valid  in 
point  of  law  :  ami  then  it  includes  a 
meritorious  as  well  as  a  valuable  con- 
sideration. Bodgson  v.  Butts,  3 
Cranch  140;  Copis  \.  Middleton,  2 
Madd.  430  ;  Twyne's  Case,  3  Rep.  81, 
2  Coke  212;  Taylor  v.  Jones,  2  Atk. 
601  :  Newland  on  <  lontracts,  <•.  23, 
p,  386;  Partridge  v.  Gopp,  Ambler 
599,  I  Eden,  167,  168;  Atherley 
on  Mar.  Sett.  <■.  L3,  pp.191,  192.  But 
it  i-  more  frequently  used  in  a  sense 
contradistinguished  from  valuable; 
and  then  it  imports  m  consideration 
of  blood  or  natural  affection,  a-,  when 
:i  man  grants  an  estate  to  a  near  re- 
lation, merely  Founded  upon  motives 

!'        pi  lldence  and    natural 


duty.  A  valuable  consideration  is 
such  as  money,  marriage,  or  the  like, 
which  the  law  esteems  as  an  equiva- 
lent given  for  the  grant,  and  it  is 
therefore  founded  upon  motives  of 
justice.  2  Black.  Com.  297,  1  Fonbl. 
Eq.  B.  1,  c.  4,  §  12,  note.  Deeds 
made  upon  a  good  consideration  only 
are  considered  as  merely  voluntary  ; 
those  made  upon  a  valuable  con- 
sideration are  treated  as  compensa- 
tory. The  words  'good  considera- 
tion' in  the  statute  may  be  properly 
construed  to  include  both  descrip- 
tions ;  for  it  cannot  be  doubted  that 
it  meant  to  protect  conveyances  made 
hinia  fide  and  for  a  valuable  con- 
sideration, as  well  as  those  made 
bona  fide  upon  the  consideration  of 
blood  or  affection.  Doe  v.  Routledge, 
Covvp.  708,  710,  711.  712;  Copis  v. 
Middleton,  2  Madd.  430  ;  Hodgson  v. 
Butts,  :',  ('ranch,  140;  Twyne's  Case, 
3  Rep.  81,  2  Coke  812." 

a  Park  v.  Battey,  80  Ga.  353,  5  S.  E. 
Rep.  492. 


§§  211,  2Iia      TRANSFER   FOR    GRANTOR'S    BENEFIT.  381 

§  211.  Transfer  for  grantor's  benefit.  —  As  w  as  observed 
by  Peck,  J.,  in  Stanley  v.  Robbins,1  one  cannot  transfer 
his  property  "  in  consideration  of  an  obligation  for  sup- 
port for  life,  or  perhaps  for  support  for  any  considerable 
length  of  time,  unless  he  retains  so  much  as  is  necessary 
to  satisfy  existing  debts,3  even  if  he  acts  in  good  faith.8 
In  Crane  v.  Stickles,4  the  court  said  :  "  It  seems,  that  one 
week  before  the  plaintiff's  note  fell  due,  they  took  a 
sweeping  sale  of  all  the  property  of  which  the  defendant 
was  possessed,  real  and  personal,  and  obligated  them- 
selves that  they  would  support  her  for  the  same,  as  the 
only  consideration,  paying  nothing,  and  agreeing  to  pay 
nothing,  only  by  way  of  support  —  and  leaving  nothing 
for  the  payment  of  debts.  Now  if  the  law  would  tolerate 
a  proceeding  like  this,  any  person,  having  the  means, 
may  make  ample  provision  for  himself  and  family  during 
life,  at  the  expense  of  his  creditors.  But  that  would  not 
be  permitted."  But  it  has  been  held  in  some  cases  that, 
where  such  support  had  actually  been  given  during  a 
number  of  years,  the  conveyance  will  be  upheld,  if  no 
actual  fraud  was  intended.5 

§  211a.  Exchange  of  property.  —  Converting  property 
into  a  new  or  different  form  is  a  favorite  subterfuge  of 
debtors.  In  Billinos  v.  Russell,6  the  New  York  Court 
of  Appeals  says  :  "  Other  situations  can  readily  be  con- 
ceived where  the  transfer  of  property,  for  a  valuable  con- 
sideration, may  be    made   the  cover  for  fraudulent  prac- 


1  36  Vt.  432.  4  15  Vt.  257. 

2  See  Crane  v.  Stickles,  15  Vt.  252  ;  fl  Hisle  v.  RudasiU,  89  Va.  519,  Hi 
Briggs  v.  Beach,  18  Vt.  115  ;  Wood-  S.  E.  Rep.  673  ;  Hays  v.  Montgomery, 
ward  v.  Wyman,  53  Vt.  647  ;  Tyler  v.  118  Ind.  91.  20  N.  E.  Rep.  646  ;  Eelsej 
Tyler,  126  111.  525,  521  N.  E.  Rep.  616  ;  v.  Kelley,  63  Vt.  41,  22  Ail.  Rep.  59?  ; 
Pease  v.  Shirlock,  63  Vt.  622,  22  Atl.  Keener  v.  Keener,  34  W.  Va.  131,  Hi 
Rep.  661.     But  see  Chandler  v.  Par-  S.  E.  Rep.  729. 

sons,  100  Mich.  313, 58  N.W.  Rep.  1011.  ''101    N.    Y.    2:11.     I     N.    G.     Rep. 

3  Davidson   v.   Burke,    143  111.  139,  531. 
32  N.  E.  Rep.  514. 


ANTE-N1   PTIAL    SETTLEMENT.  §212 

tices.  Exchanges  by  which  one  kind  of  property  is 
converted  into  another  more  easily  concealed  or  trans- 
ported ;  the  incumbrance  of  visible  and  unavailable 
property,  and  the  retention  of  that  which  is  convertible, 
or  even  the  reverse  of  this,  and  other  cases,  where  the 
ao-oreo-ate  value  of  the  debtor's  property  is  not  dimin- 
ished, but  an  apparent  obstacle  to  a  creditor's  proceed- 
ings is  created,  are  among  the  methods  by  which  frauds 
may  be  perpetrated,  by  an  insolvent  debtor." 

§212.  Ante-nuptial  settlement  —  Marriage  as  considera- 
tion. -  An  ante-nuptial  settlement,  though  made  by  the 
intended  husband  with  the  design  of  defrauding  his  cred- 
itors, will  not  be  set  aside  in  the  absence  of  the  clearest 
proof  of  the  wife's  participation  in  the  fraud,1  even  though 
the  husband  be  insolvent  at  the  time  of  the  settlement.- 
In  Magniac  v.  Thompson,3  the  court  said  :  "  Nothi-ng  can 
be  clearer,  both  upon  principle  and  authority,  than  the 
doctrine  that  to  make  an  ante-nuptial  settlement  void,  as 
a  fraud  upon  creditors,  it  is  necessary  that  both  parties 
should  concur  in,  or  have  cognizance  of,  the  intended 
fraud.  If  the  settler  alone  intended  a  fraud,  and  the 
other  party  have  no  notice  of  it,  but  is  innocent  of  it,  she 
is  not  and  cannot  be  affected  by  it.  Marriage,  in  con- 
templation of  the  law,  is  not  only  a  valuable  considera- 
tion to  support  such  a  settlement,  but  is  a  consideration 
of  the  highest  value,4  and  from  motives  of  the  soundest 
policy  is  upheld  with  a  steady  resolution"  The  courts 
are  averse  to  annulling  such  a  settlement,  because  there 
can   follow  no  dissolution  of  the  marriage  which  was  the 


Prewil     v.   Wilson,    L03   U.  S.   32.  L94;   Wright  v.  Wright,  59  Barb.  (N. 

199.  Y.)  50.-,  ;  affi'd  54  N.  Y.  437  ;  Comer  v. 

•  Nance  v.  Nance,  ^1  Ala  :;:.-,.  I  So.  Allen,  72  Ga.  12  ;  Cohen  v.  Knox.  90 

Rep.  699  Gal.  266,  27  Pac.  Rep.  215. 

;     Pet.  34H    393;    approved   and  *  Tolman  v.   Ward,  86  Me.  305,   '-)(.> 

adopted  in  Prewil  v.  Wilson,  L08  U.  Ail.  Rep.  1081. 
.  34;   Frank's    Appeal,  59   Pa.  St. 


§  212  ANTE-NUPTIAL   SETTLEMENT.  383 

consideration  for  it.1  The  marriage  subsists  in  full  force, 
even  though  one  of  the  parties  should  forever  be  ren- 
dered incapable  of  performing  his  or  her  part  oi  the 
marital  contract.2 

Marriage  is  not  only  a  valuable  consideration,  but,  as 
Coke  says,  there  is  no  other  consideration  so  much 
respected  in  the  law."  The  wife  is  deemed  to  be  a  pur- 
chaser of  the  property  settled  upon  her  in  consideration  oi 
the  marriage,  and  she  is  entitled  to  hold  it  against  all  claim- 
ants.4 In  Sterry  v.  Arden,5  Chancellor  Kent  observed  : 
"  The  marriage  was  a  valuable  consideration,  which  fixed 
the  interest  in  the  grantee  against  all  the  world  ;  she  is 
regarded  from  that  time  as  a  purchaser,  and  as  much  so  as 
if  she  had  then  paid  an  adequate  pecuniary  consider- 
ation  It  is  the  constant  language  of  the  books,  and 

of  the  courts,  that  a  voluntary  deed  is  made  good  by  a  sub- 
sequent marriage,  and  a  marriage  has  always  been  held  to 
be  the  highest  consideration  in  law.'"1  It  is  unnecessary 
to  dilate  upon  this  branch  of  the  subject.  Where  the 
wife  participated  in  the  fraudulent  intent  and  scheme,  the 
transaction  may,  of  course,  be  annulled.7  The  difficulties 
of  implicating  the  wife  in  the  fraudulent  scheme  are  from 
the  very  nature  of  things  often  insuperable.  Our  meaning 
is  illustrated  by  the  language  of  Mr.  Justice  Field  in  a 
case    which    we    have    frequently    cited  :      "  It  is    not    at 

1  Prewit  v.  Wilson,  103  U.  S.  22;  4  Herring  v.  Wickham,  29  Gratt. 
Barrow  v.  Barrow,  2 Dick.  504  ;  Nairn  (Va.)  628;  Clay  v.  Walter,  :'•'  Va.  96. 
t.  Prowse,  6  Ves.  752;  Campion  v.  51  Johns.  Ch.  (N.  Y)  260  271  : 
Cotton,  17  Ves.  264  ;  Sterry  v.  Arden,  affi'd  Verplank  v.  Sterry,  12  Johns. 
1  Johns.  Ch.  (N.  Y.)  261  ;   Herring  v.  (N.  Y.)  536. 

Wickham,  29  Gratt.  (Va.)   628;   An-  "Jones'    Appeal,    62    Pa.    St.   324; 

drews  v.  Jones,  10  Ala.  400.  Armfield    v.     Aruafield,     Freem.  Ch. 

2  Herring  v.  Wickham,  29  Gratt.  (Miss.)  311  ;  Smith  v.  Allen,  5  Allen 
(Va.)  635.  (Mass.)  454  :  Andrews  v.  .Jours.  10  Ala. 

3  See  Bishop's  Law  of  Married  Wo-  400  :  Barrow  v.  narrow.    2    Dick.  504. 
men,  775,  776  :  Magniac  v.  Thompson,  '  Ex  parte  McBurnie,  1   DeG.,  M.  & 
7   Pet.   348;    Dygert   v.    Remerschni-  G.  441 ;  Fraser  v.  Thompson,    IDeG 
der,  32  N.  Y.  642  :  Prewit  v.   Wilson,  &  J.  659. 

103  U.  S.  24. 


J84  ANTE-NUPTIAL   SETTLEMENT.  §  212 

all  likely,  judging  from  the  ordinary  motives  governing 
men.  that,  whilst  pressing  his  suit  with  her,  and  offering 
to  settle  property  upon  her  to  obtain  her  consent  to  the 
marriage,  he  informed  her  that  he  was  insolvent,  and 
would,  by  the  deed  he  proposed  to  execute,  defraud  his 
creditors.  If  he  intended  to  commit  the  fraud  imputed  to 
him,  it  is  unreasonable  to  suppose  that  he  would,  by 
unfolding  his  scheme,  expose  his  true  character  to  one 
whose  good  opinion  he  was  at  that  time  anxious  to  secure. 
If  capable  of  the  fraud  charged,  he  was  capable  of  deceiv- 
ing Mrs.  Prewit  as  to  his  pecuniary  condition.  She  states 
in  her  answer  that  she  knew  he  was  embarrassed  and  in 
debt,  but  to  what  extent,  or  to  whom,  she  did  not  know, 
and  that  it  was  because  of  the  knowledge  that  he  was 
embarrassed  that  she  insisted  upon  his  making  a  settle- 
ment upon  her."  '  This  is  perhaps  an  extreme  case,  but 
it  illustrates  the  statement  already  advanced,  that  the 
creditor  will  be  forced  to  travel  a  thorny  pathway  to  annul 
an  ante-nuptial  settlement.  It  is  sometimes  urged  that 
the  courts  should  not  encourage  a  practice  the  result  of 
which  is,  so  to  speak,  to  allow  a  man  to  barter  for  a  wife 
for  a  pecuniary  consideration.'  This  is  scarcely  a  fair 
view  of  the  transaction.  By  marriage  the  woman  assumes 
new  duties  and  responsibilities  ;  forsakes  a  home  to  which 
the  marriage  will  ordinarily  unfit  her  to  return  ;  promises 
to  live  with  her  husband,  and  to  bear  her  share  of  the 
burdens  and  cares  of  the  family.  Surely  in  assuming 
these  responsibilities  she  is  entitled  to  guard  against  pov- 
erty and  distress.  In  Piper  v.  Hoard,3  the  court  says  : 
'•  There  are  some  anomalies  in  the  law  relative  to  con- 
tracts or  negotiations   having   marriage   for   their  consid- 

Prewil  v.  Wilson,  103  U.S.  23,  negroes,  as  he  would  sell  a  lamb  for 

"There    i     certainly    something  the  shambles."      Davidson   v.  Craves 

repulsive  in  tb<  idea  of  a  parenl  Riley's  (S.  C.)  Eq.  236. 

ring  off  an  amiable  and  accom-  lo?  N.  Y.  77,  13  N.  E.  Rep.  626. 
pushed    daughter     for    lands     and 


§  213  ILLICIT   INTERCOURSE.  $85 

eration,  and  such  contracts  are  based  upon  considerations 
which  obtain  in  no  other  contract.  The  family  relations 
and  their  regulation  are  so  much  a  matter  of  public  policy 
that  the  law  in  relation  to  them  is  based  on  principles  not 
applicable  in  other  cases  ;  and  all  business  negotiations 
having  marriage  for  their  end  are  regarded  in  much  the 
same  light  by  our  courts." 

§  213.  Illicit  intercourse.  —  A  contract  the  consideration  of 
which  is  future  illicit  cohabitation  is  said  to  be  utterly 
void.1  But  a  conveyance  in  consideration  of  past  cohabi- 
tation, intended  or  regarded  as  reparation  or  indemnity 
for  the  wrong  done,  is  treated  at  common  law  as  founded 
on  a  good  consideration,  and  may  be  upheld.2  A  trans- 
fer, however,  to  a  mistress  or  her  children,  by  way  of  gift 
or  advancement,  although  not  looking  to  future  cohabi- 
tation, and  intended  merely  as  a  provision  for  mainte- 
nance, is  invalid  as  against  existing  creditors.3  This 
distinction  is  manifestly  important.  In  Wait  v.  Day4 
the  court  said,  that  although  the  debtor  "  may  have  been 
under  no  legal  liability  to  the  defendant,  yet  if  he  paid  the 
money  in  discharge  of  what  he  deemed  a  moral  obligation 
to  indemnify  the  defendant  against  the  consequences 
which  had  already  resulted  from  their  illicit  intercourse,  I 
think  the  case  would  not  be  within  the  statute.  He  had 
made  her  the  mother  of  two  illegitimate  children,  and  was 
at  liberty  to  refund  the  money  which  she  had  already 
expended  for  the  necessary  support  and  education  of 
those  children.  Where  there  is  an  existing  obligation, 
either  legal  or  moral,  to  pay  so  much  money,  and  the  pay- 
ment is  not  made  with  any  reference  to  the  future, 
nor  by  way  of  mere  gratuity,  the  case  is  not  within  the 
mischief  against  which   the  legislature    intended   to   pro- 

1  Potter   v.    Gracie,    58    Ala.    305;         *  Potter  v.  Gracie,  58  Ala.  805. 
Jackson  v.  Miner,  101  111.  559.  "4  Den.  (N.  Y.)  439,  441. 

3  Ibid. 

25 


ILLEGAL   CONSIDERATION.  §§  214,  21  5 

vide."  The  same  principle  was  applied  in  Fellows  v. 
Hmperor.1  In  that  case  the  grantee  had  been  deceived 
into  a  marriage  with  the  grantor,  and  had  innocently  lived 
with  him  for  years,  supposing  she  was  his  lawful  wife.  It 
subsequently  transpired  that  he  had  another  wife  living, 
whereupon  she  left  him.  The  court,  in  sustaining  the 
conveyance,  held  that  the  grantor  was  under  the  strongest 
moral,  if  not  legal  obligation,  to  compensate  the  grantee 
for  her  services,  and  to  indemnify  her  as  far  as  he  could  in 
a  pecuniary  point  of  view,  against  the  consequences  of 
his  fraudulent  and  illegal  acts.  The  conveyance  was 
upheld  against  creditors.2 

^  214.  Illegal  consideration.  —  One  who  has  freely  paid 
his  money  upon  an  illegal  contract  is particeps  criminis, 
and  no  cause  of  action  arises  in  his  favor  upon  an  implied 
promise  to  repay  it.  But  when  an  insolvent  debtor,  or  one 
in  embarrassed  circumstances,  pays  his  money  upon  such 
illegal  consideration,  he  stands,  in  relation  to  his  creditors 
in  the  same  position  as  if  he  had  made  a  voluntary  con- 
veyance of  his  property.  In  contemplation  of  law  he  has, 
in  fact,  parted  with  his  money  for  no  consideration,3 
because  it  is  no  consideration  which  can  be  set  up  in  a 
court  of  law.1 

^  215.  Moral  obligations.  —  A  debtor  may  acknowledge 
and  prefer  a  claim  barred  by  the  statute  of  limitations,5 
and  such  conduct  is  not  conclusive  evidence  of  a  want  of 


L3  Barb.  (N.  ^  312;  Kessinger  \.  kVssinger,  37  Ind. 

Improper      influences.  —  Convey-  841.     See  §13  and  note  on  "Undue 

ances  made  by  a  dissolute  man  to  a  Influence,"   giving  the  substance   of 

prostitute,  who  had  a  strong  influence  the  opinion  in  Shipman   v.  Furniss, 

biin,  may  be  annulled.    Shipman  69  Ala.  555. 

I  hi  m--.    69    Ala.  555,   and  ca  1  Story's  Eq.  §§  353,  354 ;  Clark  v. 

cited,     it    Am.    Rep.   528,    and    the  Gibson,  12  N.  H.  386. 

learned  note  of  [rving  Browne,  Esq.,  Weeks  v.  Bill,  38N.  II.  305. 

••'i    p.   537;  also  Leighton  v.  Orr,    11  Manchester  v.  Tibbetts,  121  N.  Y. 

Dean  v.  Negley,  11  Pa.  St.  219,  'J  I  N.  E.  Rep.  304. 


§  2l6  COPARTNERSHIP    DEBTS.  387 

good  faith;1  and  he  is  not  bound  to  set  up  the  statue  of 
frauds;2  and  an  agreement  by  a  husband  to  convey  cer- 
tain lands  to  his  wife  in  consideration  of  her  relinquishing 
an  inchoate  interest  in  his  lands,  which  she  carried  out,  is 
founded  upon  a  valid  consideration  which  the  husband  had 
a  right  to  discharge.3  So  it  is  not  absolutely  necessary 
to  the  bona  fides  of  a  charge  of  interest  in  an  account,  that 
it  should  be  of  such  a  character  that  it  mi^ht  be  recov- 
ered  in  a  suit  at  law  brought  by  a  creditor  against  his 
debtor.  There  are  many  dealings  amongst  men  in  which 
interest  is  habitually  charged  and  paid,  when  it  could  not 
be  claimed  on  the  ground  of  strict  legal  right.  These 
transactions  are  regarded  as  fair  and  just  as  between  the 
parties,  and  they  cannot  be  considered  fraudulent  as  to 
others.4 

§  216.  Individual  and  copartnership  debts.  —  One  partner, 
it  is  asserted,  cannot  usually  make  a  valid  transfer  of  firm 
property  in  payment  of  his  individual  debt  without  the 
consent  of  his  copartner.5  It  is  said  that  every  one  is 
bound  to  know  that  a  partner  has  no  right  to  appropriate 
the  partnership  property  to  the  payment  of  his  individual 
debts,  and  if  one  so  deals  with  him  he  must  run  the  risk 


1  French  v.  Motley,  63  Me.  326  ;  3  Brown  v.  Rawlings,  72  Ind.  505. 
Keen  v.  Kleckner,  42  Pa.  St.  529  ;  But  compare  Collinson  v.  Jackson,  8 
Davis   v.    Howard,    73  Hun    (N.  Y.)  Sawyer  357. 

347.  26  N.  Y.  Supp.  194  ;  Del  Valle  v.  *  Spencer  v.  Ayrault,  10  N.  Y.  205  ; 

Hyland,  76  Hun  (N.  Y.)  493,  27  N.  Y.  Wolford  v.  Farnham,  47  Minn.  95,    lit 

Supp.  1059;  affirmed  without  opinion,  N.    W.    Rep.    528.     In    Missouri  one 

148  N.  Y.  751,  43  N.  E.  Rep.  986.     But  partner   may  execute  a  mortgage  on 

the  fact  that  the  debt  is  so  barred  is  a  firm    assets    to    secure    certain    firm 

circumstance  upon  which  fraud  may  claims.     Union    Bk.    v.    Kansas  Citj 

be  predicated.  Sturm  v.  Chalfant,  38  Bk.,  136  U.S.  223,  10  S.  C.   Rep.  1013 

W.  Va.  248,  18  S.  E.  Rep.  451 ;  McCon-  "Hartley  v.   White,  94  Pa.  St.  36; 

nellv.  Barber,  86  Hun  (N.Y.)  360,  33  Todd    v.  Lorah.  75   Pa.    St.  155.     Se< 

N.  Y.  Supp.  480.  Erb  v.  West  (Miss. »  19  So.  Rep.  829  ; 

2  Cresswell  v.  McCaig,  11  Neb.  227,  Brickettv.  Downs.  163  Mass.  70,  39N. 
9  N.  W.  Rep.  52  ;  Cahill  v.  Bigelow,  E.  Rep.  776. 

18  Pick.  (Mass.)  369.  But  see  Lloyd  v. 
Dutton,  91  U.  S.  479. 


388  COPARTNERSHIP  DEBTS.  §  2l6 

of  the  interposition  of  partnership  rights.1  This  broad 
proposition  is  disputed  in  Schmidlapp  v.  Currie.2  The 
court  said  :  "  The  firm  creditors  at  large  of  a  partner- 
ship have  no  lien  on  its  assets,  any  more  than  ordinary 
creditors  have  upon  the  property  of  an  individual  debtor. 
The  power  of  disposition  over  their  property,  inherent  in 
every  partnership,  is  as  unlimited  as  that  of  an  individual, 
and  the  jus  disponendi  in  the  firm,  all  the  members  co-op- 
erating, can  only  be  controlled  by  the  same  consider- 
ations that  impose  a  limit  upon  the  acts  of  an  individual 
owner,  namely,  that  it  shall  not  be  used  for  fraudulent 
purposes.  So  long  as  the  firm  exists,  therefore,  its  mem- 
bers must  be  at  liberty  to  do  as  they  choose  with  their 
own,  and  even  in  the  act  of  dissolution  they  may  impress 
upon  its  assets  such  character  as  they  please.  The  doc- 
trine that  firm  assets  must  first  be  applied  to  the  payment 
of  firm  debts,  and  individual  property  to  individual  debts, 
is  only  a  principle  of  administration  adopted  by  the 
courts,  where  from  any  cause  they  are  called  upon  to  wind 
up  the  firm  business,  and  find  that  the  members  have 
made  no  valid  disposition  of,  or  charges  upon,  its  assets."3 
But  if  while  such  prior  right  of  the  firm  creditors  must 
generally  be  worked  out  through  the  rights  of  the  part- 
ners as  between  themselves,  still  where  the  transfer  of 
all  the  partnership  assets  to  one  member  of  the  firm  is 
done  clearly  with  the  intent  of  hindering  the  partnership 
creditors,  their  rights  will  be  held  to  be  superior  to  those 
of  the  individual  creditors.4 

A   transfer  by  one  of  the  partners,  or  a  lien  created  by 
him    on   the  corpus  of  the  partnership  property  to  pay  an 

Id    v.  Lorah,  76  Pa.  St.  L5G.  Co.  v.  Bannon,  85  Tenn,  712.  4  S.  W. 

600.  Rep.  831. 

Roach    v.  Brannon,    57    .Mi^s.  *  Arnold   v.  Second  Nat.  Bank,  45 

Goodbar  v.  Cary,  4  Woods  N.  .1.  Eq.  186,17  Atl.  Rep.  93;  Jack- 

u        i  I.  99  U.S.  119;  son  Hank  v.  Durfey,  72  Miss.  971,  18 

Ids  v.  Johnson,  •">!  Ark.  149,   16  S...   Rep.  4o6. 
8.   W.    Rep.    124  •   Carver  Gin.  &   N. 


§216 


CI  >PARTNERSH]  P    DEBTS. 


individual  debt,  has  been  in  effect  declared  in  New  York 
to  be  fraudulent  and  void  as  to  the  creditors  of  the  firm, 
unless  the  firm  was  solvent  at  the  time.1  The  converse 
of  the  proposition  is  not  generally  admitted.  Chief- 
Justice  Ruger  said,  in  Crook  v.  Rindskopf :~  "It  is  law- 
ful for  an  insolvent  member  of  a  firm  to  devote  his 
individual  property  to  the  payment  of  firm  debts,  to  the 
exclusion  of  his  individual  creditors."  8  Where  the  members 
of  the  partnership  are  all  liable  for  a  debt,  although  it  was 
originally  a  debt  of  one  of  them  only,  it  is  no  fraud  on  the 
partnership  creditors  to  devote  partnership  funds  to  its 
payment.4  The  mere  fact,  however,  that  the  money  was 
used  for  the  benefit  of  the  partnership  does  not  make  the 
debt  a  partnership  obligation.5  It  is  settled  in  New 
York  that  it  is  a  fraud  upon  firm  creditors  for  a  member 
of  the -firm  to  take  firm  property  and  apply  it  to  his 
individual  debt,  or  for  an  insolvent  firm  to  apply  firm  prop- 
erty to  the  payment  of  the  debt  of  an  insolvent  partner.6 


1  Menagh  v.  Whitwell,  52  N.  Y. 
146  ;  Goodbar  v.  Cary,  4  Woods,  668. 
See  Wilson  v.  Robertson,  21  N.  Y. 
587  ;  Keith  v.  Fink,  47  111.  272  ;  Marks 
v.  Bradley,  69  Miss.  1,  10  So.  Rep.  922  ; 
Cribb  v.  Morse,  77  Wis.  322,  46  N. 
W.  Rep.  126  ;  Taylor  v.  Missouri  Glass 
Co.,  6  Tex.  Civ.  App.  337,  25  S.  W. 
Rep.  466  ;  Hubbard  v.  Moore,  67  Vt. 
532,  32  Atl.  Rep.  465  ;  Cox  v.  Peoria 
Mfg.  Co.,  42  Neb.  660,  60  N.  W.  Rep. 
933  ;  Collier  v.  Hanna,  71  Ind.  253  ; 
Hanford  v.  Prouty,  133  111.  339,  24  N. 
E.  Rep.  565  ;  Sexton  v.  Anderson,  95 
Mo.  373,  8  S.  W.  Rep.  564  ;  Reyburn 
v.  Mitchell,  106  Mo.  365,  16  S.  W. 
Rep.  592;  Darby  v.  Gilligan,  33W. 
Va.  246,  10  S.  E.  Rep.  400.  Compare 
Case  v.  Beauregard,  99  U.  S.  119  ; 
Shanks  v.  Klein,  104  U.  S.  18  ;  Crook 
v.  Rindskopf,  105  N.  Y.  482,  12  N.  E. 
Rep.  174  ;  Booss  v.  Marion,  129  N.  Y. 


536,  29  N.  E.  Rep.  832 ;  Smith  v. 
Smith,  87  Iowa  93,  54  N.  W.  Rep.  73. 

2  105  N.  Y.  482. 

8  Citing  Dimon  v.  Hazard,  32  N. 
Y.  65  ;  Saunders  v.  Reilly,  105  N.  Y. 
12  ;  Royer  Wheel  ('<>.  v.  Fielding,  101 
N.  Y.  504,  5  N.  E.  Rep.  431  ;  Kirby  v. 
Schoonmaker,  3  Barb.  Ch.  N.  Y.  46. 
See  Citizens'  Bank  v.  Williams,  128 
N.  Y.  77,  28  N.  E.  Rep.  33. 

4  Citizens'  Bank  v.  Williams,  128 
N.  Y.  77,28N.  E.  Rep.  33;  Nordlinger 
v.  Anderson,  123  N.  Y.  544,  25  N.  E. 
Rep.  992. 

6  Roe  v.  Hume,  72IIun,  N.  Y.  1,  2:> 
N.  Y.  Supp.  576  ;  Smith  v.  Sipperley, 
9  Utah,  267,  34  Pac.  Hop.  54. 

6  Berinheimer  v.  Rundskopf,  116  N. 
Y.  428,  22  N.  E.  Rep.  1074  ;  Nordlinger 
v.  Anderson,  123  N.  Y.  oil.  25  N  E. 
Rep.  992 :  Bulger  v.  Rosa,  L19  N.  Y. 
459,  24  N.   E.  Rep.  8 


390  FUTURE   ADVANCES.  §  217 

In  Bulger  v.  Rosa1  the  court  says:  "Where  an  indi- 
vidual creditor  of  one  of  the  members  of  an  insolvent 
firm,  knowing  of  such  insolvency,  takes  a  transfer  of  firm 
property  in  payment  of  his  individual  debt,  his  act  is  not 
merely  a  violation  of  an  equitable  right  of  the  firm 
creditors,  but  it  constitutes  a  fraud  under  the  Statute  of 
Elizabeth.'""  The  authorities  as  to  what  disposition  of 
individual  or  of  copartnership  assets  will  be  upheld  as 
against  the  respective  classes  of  creditors  are  not  in  very 
satisfactory  shape.  In  some  States  it  is  held  that  an 
appropriation  of  firm  assets  to  individual  debts  by  consent 
of  all  the  partners,  is  valid,  even  when  the  firm  is  insol- 
vent.3 Other  cases  hold  that  such  appropriation, 
while  not  in  itself  fraudulent,  will  be  set  aside  if  there  is 
an  actual  intent  to  defraud  firm  creditors.4  It  seems  per- 
fectly clear,  however,  that  where  the  courts  get  possession 
of  the  funds  for  distribution,  the  distinction  between  the 
rights  of  the  two  classes  of  creditors  will  be  respected5 
and  preserved.6 

§  2  i  7.  Future  advances. —  A  judgment  or  mortgage 
may  be  taken  and  held  as  security  for  future  advances  and 
responsibilities  to  the  extent  of  the  security,  when  that 
forms    a   part    of    the    original    agreement    between    the 


1  119  X.  Y.  459,  465,  24  N.  E.  Rep.  N.  W.  Rep.  181  ;  cf.  Smith  v.  Smith, 

87  Iowa  93,  54  N.  W.  Rep.  73. 

In  re   Douglass,  L.  R.  TCh.  537;  5  Coffin  v.  Day,  34  Fed.  Rep.  687. 

Kendal  v.    Wood,  L.  R.  6  Exch.  243:  See  §  319  1>. 

Piercy   v.   Fynney,   L.  R.  12  Eq.  69;  6  An  assignment  for  the  benefit  of 

Gallagher's  Appeal,    111    I'a.   St.  353,  creditors,   including  all  the  property 

cf    Euiskamp  \.  Moline  Wagon  <>1'   the  partners,  as  members  of  the 

Co.,  L21    D".  8.  810,  9  S.  C.  Rep.  899.  firmand  individually,  should  be  con- 

\  1- 1 1 1  - 1 * . .  1 1  _'  \    Carr,  116  N.  C.  499,  Btrued   so    as   to   apply     partnership 

21    S.   K.  Rep.  175;   Reynolds  v.  John-  assets   to    partnership   debts,   and    in- 

'-1    \il..    149, 16' S.  w.  Rep.  124.  dividual  assets  for   individual  debts. 

■  tr  an  elaborate  discussion  of  this  Griffin  v.   Peters,  133  U.  S.  070,  10  8. 

subject,  see  18  \m   St.  Rep.  364  380.  < !.  Rep.  354. 

•  K.  II.  s    v.  Flory,  84   Iowa   671,  51 


§  217a,  2l8  GIFTS    1  IF   CHARITY. 

parties.1  "It  is  frequent,"  says  Chief-Justice  Marshall, 
"  for  a  person  who  expects  to  become  more  considerably 
indebted,  to  mortgage  property  to  his  creditor,  as  a  security 
for  debts  to  be  contracted,  as  well  as  for  that  which  is 
already  due."2  But  in  order  to  secure  good  faith  and 
prevent  error  and  imposition  in  dealing,  it  is  necessary 
that  the  agreement,  as  contained  in  the  record  of  the  lien, 
whether  by  mortgage  or  judgment,  should  give  all  the 
requisite  information  as  to  the  extent  and  character  of  the 
contract.  3  A  conveyance  in  consideration  of  future  serv- 
ices is  declared  to  be  void  as  against  existing  creditors,  ' 
and  creditors  may  reach  money  paid  to  a  third  party  as 
board  money  for  two  years  in  advance. 5 

§  217a.  Gifts  to  charity.  —  An  insolvent  debtor  can  no 
more  give  away  his  property  for  a  charitable  use  in  fraud 
of  the  rights  of  his  creditors  than  he  can  to  an  individual.0 

§  218.  Services  by  members  of  a  family.  — In  the  absence 
of  an  express  agreement  the  law  will  not  imply  a  promise 
to  pay  a  daughter  for  services  rendered  in  the  debtor's 
family,7  and  a  mortgage  given  to  a  daughter   under  such 

1  Truscott  v.  King,  6  N.  Y.  157,  and  -United  States  v.   Hooe,  3  Cranch 

cases  cited  ;  Robinson  v.  Williams,  22  89.    See  Lawrence  v.  Tucker,  23  How. 

N.  Y.  380;  Tapiav.  Demartini,  77  Cal.  14  ;  Leeds  v.  Cameron,  3  Sumner  492, 

383,   19  Pac.   Rep.   641;    Boswell  v.  per  Story,  J. ;  Conard  v.  Atlantic  Ins, 

Goodwin,  31  Conn.  74;  Brace  v.  Ber-  Co.,  1  Pet.  448. 

dan,  104  Mich.  356,   62   N.    W.    Rep.  3Hart  v.  Chalker,  14  Conn.  1',.     The 

568;  Holt  v.   Creamer,  34  N.  J.   Eq.  fact  that  the  debtor  is  insolvent  al  the 

188;  Griffin  v.  New  Jersey  Oil  Co.,  11  time   does    not    prevent   the  enforce- 

N.  J.  Eq.  49  ;  Bell  v  Fleming's  Ex'rs,  ment  of  the  contract.  Exparh  Ames, 

12  N.  J.  Eq.  13;  Central  Trust  Co.  v.  1  Low.  561,  1  Fed.  Cases  746. 

Continental  Iron  Works,  51  N.  J.  Eq.  *  Lehman  v.  Bentley,  60  N.    Y.  Su- 

607,  28  Atl.  Rep.  595  ;  Mowry  v.  Agri-  per.  473,  18  N.  Y.  Supp.  778. 

cultural  Ins.  Co.,  64  Hun  (N.  Y.)  143,  I  >.iv  is  v.  Briggs,  24  X.  Y.  Stat<  Rep. 

18  N.  Y.  Supp.  834  ;  Barnard  v.  Moore,  896,  5  N.  Y.  Supp.  323. 

90  Mass.  274;  Robinson  v.  Consolidated  G  St.  Geor-v's  ( ihurch  S«.c.  v.  Branch, 

Real  Estate  &  F.  I.  Co.  55  Md.   109  ;  120  Mo.  238,  35  S.  W.  Rep.  818. 

Collins  v.  Carlile,  13  111.254;  McCon-  "  Miller   v.  Sauerbier,   30   X.  J.  Eq. 

nell  v.  Scott,  67  111.  276;  Wilson   v.  74;    [rish  v.   Bradford,    64    [owa  303, 

Russell,   13  Md.  496.     See  Ackerman  20   N.    W.    Rep.    147;  Stumbaugh  \. 

v.  Hunsicker,  85  N.  Y.  50.  Anderson,  46  Kan.  541,   26   Pac.  Rep. 


392 


SERVICE    BY    MEMBERS   OF   A    FAMILY. 


§218 


circumstances  will  be  held  to  be  without  consideration, 
and  fraudulent  as  against  creditors.1  A  conveyance  by 
an  insolvent  husband  to  his  wife,  in  pursuance  of  a  con- 
tract to  compensate  her  for  services  in  taking  care  of 
his  aged  mother,  who  resided  with  him,  has  been  held  in 
New  York  to  be  invalid  and  voidable  as  against  creditors. 
The  Court  of  Appeals  of  that  State  decided  that  the 
wife,  by  rendering  service  to  her  husband's  mother,  was 
simply  performing  a  marital  duty  which  she  owed  to  her 
husband  ;  that  where  she  received  no  payment  for  the 
discharge  of  this  duty  from  the  person  to  whom  the  serv- 
ice was  rendered,  and  was  entitled  to  none,  and  brought 
no  money  or  property  to  the  husband  by  her  service,  she 
could  not  stipulate  for  compensation.2  Earl,  J.,  said  :  "  It 
would  operate  disastrously  upon  domestic  life,  and 
breed  discord  and  mischief,  if  the  wife  could  con- 
tract with  her  husband  for  the  payment  of  services 
to  be  rendered  for  him  in  his  home ;  if  she  could 
exact  compensation   for  services,    disagreeable  or   other 


1045  ;  Byrnes  v.  Clarke,  57  Wis.  13,  14 
X.  W.  Rep.  815;  Ionia  Co.  Savings 
Bank  v.  McLean,  B4  Mich.  625,  48  N. 
w.  Rep.  159. 

Gardner's  Admr.  v.  Schooley,  25 
N.  .1.  Eq.  150.  Sec  Ridgway  v.  Eng- 
lish, 22  X.  J.  Law  409;  Updike  v. 
Titus.  13  N.  J.  Eq.  151;  Coley  v. 
Coley,  11  X.  J.  E.j.  350:  CTpdike  v. 
Ten  Broeck,  32  X.  J.  Law  105; 
Prickett  v.  Prickett,  20  X.  J.  Eq.  478. 
The  services  of  a  sod  after  reaching 
majority  were  held  t<>  be  a  good  con- 
sideration in  Graves  v.  Davenport,  50 
I  ■  'i .  Rep.  881  ;  I [eeren  v.  Batson, 
28  III.  App.  268.  Parents  may,  as 
against  creditors,  compensate  chil- 
dren  for  services.  I  Inward  v.  Rynear- 
Bon,  50  Mich.  309,  15  X.  W.  Rep.  486, 
!>•-!-  Cooley,  •!  :  Wilson  \.  McMillan, 
17.' 

I  loleman  \    Burr,  93  X.  Y.  17,  25  ; 


17  Weekly  Dig.  (N.  Y.)  233.  Com- 
pare Filer  v.  N.  Y.  Central  R.  R. 
Co.,  49  N.  Y.  47  :  Blaechinska  v.  How- 
ard Mission,  etc.,  130  N.  Y.  499.  29  N. 
E.  Rep.  755  ;  Coursey  v.  Morton,  132 
N.  Y.  556,  559,  30  N.  E.  Rep.  231  ; 
Suan  v.  Caffe,  122  X.  Y.  320,  25  N.  E. 
Rep.  488 ;  Snyder  v.  Free,  114  Mo. 
371,  21  S.  W.  Rep.  847  ;  McGarvy  v. 
Roods,  73  la.  363.  35  N.  W.  Rep.  488 ; 
Hart  v.  Flinn,  36  la.  366;  McAfee 
v.  McAfee,  28  S.  C.  188,  5  S.  E.  Rep. 
480  ;  Whitaker  v.  Whitaker,  52  N.  Y. 
368  ;  Brooks  v.  Schwerin,  54  X.  Y.  344  ; 
Birkbeck  v.  A.ckroyd,  74  N.  Y. 
356;  Reynolds  v.  Robinson,  64  N.  Y. 
589  ;  Gable  v.  Columbus  Cigar  Co. , 
140  End.  563,  38  N.  E.  Rep.  474.  As 
against  a  subsequent  creditor  her  serv- 
ices have  been  held  to  be  a  good  con- 
sideration. Daggett,  B.  &  H.  Co.  v. 
Bulfer,  82  Iowa  101, 47  N.W.  Rep.  978. 


§219  PROOF   OF   CONSIDERATION.  3<j3 

wise,  rendered  to  members  of  his  family  ;  if  she 
could  sue  him  upon  such  contracts,  and  establish  them 
upon  the  disputed  and  conflicting  testimony  of  the  mem- 
bers of  the  household.  To  allow  such  contracts  would 
degrade  the  wife  by  making  her  a  menial  and  a  servant  in 
the  home  where  she  should  discharge  marital  duties  in 
loving  and  devoted  ministrations,  and  frauds  upon  credit- 
ors would  be  greatly  facilitated,  as  the  wife  could  fre- 
quently absorb  all  her  husband's  property  in  the  payment 
of  her  services,  rendered  under  such  secret,  unknown  con- 
tracts." !  But  the  husband  owes  no  duty  to  the  wife  to 
render  her  service  in  her  separate  business  without  com- 
pensation.2 Manifestly  a  father  may  work  for  his  son, 
and  a  debt  for  wages  due  by  the  father  to  the  former  will 
sustain  a  conveyance.3 

§  219.  Proof  of  consideration.— In  Hanford  v.  Artcher,4 
in  speaking  of  the  presumption  of  fraud  arising  from  a 
failure  to  change  possession,  the  court  said  that,  to  rebut 
this  presumption,  the  statute  imposed  upon  the  party 
claiming  under  a  sale  or  a  mortgage,  the  burden  of  prov- 
ing good  faith  and  an  absence  of  any  intent  to  defraud 
creditors.  "  Proof  of  a  valuable  consideration,"  said 
Senator  Hopkins,  "or  an  honest  debt,  is  essential  to  show 
good  faith  ;  and,  if  there  be  no  such  proof,  I  take  it  that 
the  requirement  of  the  statute  in  this  respect  is  not  com- 
plied with,  and  that  the  court  may  order  a  nonsuit 

Such  proof  of  consideration,  too,  must  go  beyond  a  mere 
paper  acknowledgment  of  it.  that  might  be  binding 
between  the  parties."  It  is  said  by  Chief-Justice  Elliott,  in 
Rose  v.  Colter,5  that  "  if  it  be  shown  that  a  valuable  con- 
sideration was  paid   for  the   property,  and  that   when  the 

1  See  Grant  v.  Green,  41  Iowa  88:  575,  30   N.  W.  Rep.  368;   State    Bank 

Dowell  v.  Applegate,  8  Sawyer  427.  v.  Whittle,  48  Mich.  1,  11  X.  W     Rep. 

4  Third   Nat.  Bk.   v.   Guenther  123  756. 
N.  Y.  576,  25  N.  E.  Rep.  986.  4  4  Hill  (N.  Y.)  295. 

'Woodhull  v.    Whittle,    63    Mich.  ;,76Ind.  51K3. 


394  EXPLAINING    RIXITALS.  §§  220,  221 

sale  was  made  the  seller  was  possessed  of  property  far 
more  than  sufficient  to  pay  all  his  debts,  the  presumption 
arising  from  the  retention  of  possession  is  plainly  over- 
come." As  we  have  already  said,  there  ought  to  be  a  fair 
and  reasonable  consideration  corresponding  to  the  value 
of  the  article  sold.1  When  the  consideration  is  large 
there  should  be  clear  proof  by  the  vendee,  if  his  ability  to 
purchase  is  questioned,  of  his  means,  or  of  the  source 
from  which  he  obtained  the  money.  Absence  of  evidence  of 
the  disposition  made  by  the  grantor  of  the  money  alleged 
to  have  been  received  becomes  a  material  circumstance.2 

|  220.  Recitals  of  consideration  as  evidence.  —  It  is  said  in 
Hubbard  v.  Allen,3  that  when  a  controversy  arises  between 
the  grantee  and  an  existing  creditor  as  to  the  validity  of 
a  conveyance,  it  is  a  settled  rule  to  regard  the  recital  of  a 
consideration  as  a  mere  declaration  or  admission  of  the 
grantor,  and  not  as  evidence  against  the  creditor.4 
Recitals  or  statements  of  consideration  in  a  deed,  how- 
ever specific,  will  not  be  sufficient  to  protect  a  purchaser 
where  there  is  any  fraud.0  and,  as  we  shall  see,  any  kind  of 
consideration  may  be  proved.6 

^  22i.  Explaining  recitals.  —  A  conveyance  of  land  made 
by  a  husband  to  his  wife  purported  to  be  executed  in  consid- 
eration of  love  and   affection,  "  and   for  the   sum  of  one 


'State   v.    Evans,  38  Mo.  150-154;  Ala.  137;  McCaskle  v.    Amarine,   12 

Klosterman  v.   Vader,  6  Wash.  99,  32  Ala.  17;  Falkner  v.  Leith,  15  Ala.  9; 

Pac.  Rep.  1055.     See§209.  Dolin  v.   Gardner,    15   Ala.   758.    See 

'Thompson  v.  Tower  Mfg.  Co.,  104  Kimball    v.    Fenner,   12  N.  H.  248; 

Ala.  146,   16  So.   Rep.  116;  Barrell  v.  Cohnv.  Ward,  32  W.  Va.  34,  9  S.  E. 

Mitchell,  61  AJa.  270  Rep.  41  ;  Ball  v.  Campbell,  134  Pa.  St. 

.v.i    \l.i.   296;   Cohn   v.    Ward,  32  602,  19  Atl.  Rep.  802 ;  Childs  v.  Hurd, 

W.  Va.  34,  98.  E.  Rep.  41  ;  Rogers  v.  32   W.    Va.    66-101,  9  S.  E.  Rep.  362 : 

Verlander,  30  W,  \:,  619,  5S.  E.  Rep.  De  Farges  v.  Ryland,  87  Va.  408.  128. 

347.  E.  Rep.  805. 

•Citing   McCain    v.    W I,    I  Ala.  5  Snyder  v.  Free,  114  Mo.  368,  21  S. 

Branch  Bank  of  Decatur  v.  Kin-  \V.  Rep.  ^17. 

■     McGintrj  v.  Reeves,  L0  B  Leach  v.  Shelby,  58  Miss.  681. 


§  221  EXPLAINING   RECITALS.  395 

dollar  cash  in  hand  paid,  the  receipt  whereof  is  hereby 
acknowledged."  The  court  held  that,  the  money  consid- 
eration being  manifestly  nominal,  parol  evidence  was  inad- 
missible, in  an  action  brought  to  set  aside  the  deed  as  in 
fraud  of  creditors,  to  show  that  there  was,  in  fact,  an  ade- 
quate pecuniary  consideration.1  But,  in  another  case, 
where  the  consideration  expressed  in  the  deed  was  "  five 
hundred  dollars  and  othergood  causes  and  considerations," 
it  was  held  competent  to  prove  the  consideration  of  blood.~ 
This  general  subject  is  referred  to  in  Hinde's  Lessee  v. 
Longworth,3  where  it  was  said  that  if  the  evidence  had 
been  offered  for  the  purpose  of  showing  that  the  deed 
was  given  for  a  valuable  consideration,  and  in  satisfaction 
of  a  debt,  and  not  for  the  consideration  of  love  and  affec- 
tion, as  expressed  in  the  deed,  it  might  well  be  considered 
as  contradicting-  the  deed.  It  would  then  be  substituting 
a  valuable  for  a  good  consideration,  and  a  violation  of 
the  well-settled  rule  of  law,  that  parol  evidence  is  inad- 
missible to  annul  or  substantially  vary  a  written  agree- 
ment.4 The  subject  was  further  considered  in  Betts  v. 
Union  Bank  of  Maryland,5  a  case  argued  by  Reverdy 
Johnson  on  one  side,  and  by  Roger  B.  Taney,  after- 
ward Chief-Justice  of  the  United  States,  on  the  other, 
and  the  conclusion  of  the  court  was  that  marriage  can- 
not be  given  in  evidence  as  the  consideration  of  a  deed 
of  bargain  and  sale  expressed  to  be  made  for  a  money 
consideration   only.6      A   mortgage,    the    expressed    con- 


'rHouston  v.  Blackman,  66  Ala.  559,        6  Galbreath  v.   Cook,   30  Ark.  425; 

564  ;  Galbreath  v.  Cook,    30  Ark.  417.  Davidson  v.  Jones,  26  Miss.  63  ;   I  ' 

See    Potter    v.    Gracie,  58   Ala.    308;  v.  McCullough,  69  Md.    592,    16    At  I. 

Reynolds  v.  Gawthrop,  37  W.  Va.  3,  Rep.  453.     In  Scoggin  v.  Schloath.  15 

16  S.  E.  Rep.  364.  Ore.  383,  15  Pac.   Rep.  635,  the  court 

2  Pomeroy  v.  Bailey,  43  N.  H.  118.  said  :     "The  better  rule  appears  to  be 

3 11  Wheat.  214.  that  if  the  consideration  expressed  in 

4  See  Cunningham  v.  Dwyer,  23  Md.  the  deed  is  natural  love  and  affection, 
219.  it  cannot  be  shown  to  have  been  exe- 

5  1  Harr.  &  G.  (Md.)  175.  cuted  for  a  valuable  consideration  ;  or 


396  SUFFICIENT   CONSIDERATION.  §  222 

sideration  for  which  was  $1,000,  may  be  explained  by 
showing  that  it  was,  in  fact,  given  to  secure  the  mortgagee 
against  liability  on  two  accommodation  notes  of  $500 
each.1  The  recital  that  the  consideration  has  been  paid 
may  generally  be  contradicted  by  parol  evidence  ; 2  and 
indeed  there  seems  to  be  a  prevalent  tendency  in  the 
courts  to  admit  parol  proof  of  the  true  consideration  of 
a  deed  in  almost  every  case,3  though  a  policy  sometimes 
manifests  itself  to  exclude  evidence  of  consideration  dif- 
ferent in  kind  from  that  set  forth  in  the  instrument. 
Manifestly  the  recitals  are  not  binding  upon  creditors  in 
any  event. 

§  222.  Sufficient  consideration.— A  bond  given  by  a  minor 
son  to  his  father  in  consideration  of  permission  to  leave 
home  and  work  for  himself,  or  for  his  board  while  he 
remains  at  home  and  works  on  his  own  account,  if  bo?ia 
fide,  is  neither  against  the  policy  of  the  law  nor  fraudulent 
as  to  creditors.4  And  where  a  wife  advances  to  her  hus- 
band money  to  purchase  land,  under  an  agreement  that 
the  money  shall  be  repaid  to  her  children  and  its  payment 


if  voluntary,  or  on   consideration  of  Perry,  28  Iowa  63  ;  Lawton  v.  Buck- 

marriage  and   the  like,  it  cannot  be  ingham,  15  Iowa  22  ;  Pierce  v.  Brew, 

shown   that   the   consideration  was  a  43  Vt.   295  ;   Anthony  v.  Harrison,  14 

moneyed  one.    This  would  be  proving  Hun  (N.  Y.)  210;  Morris  v.  Tillson,  81 

by   parol   that   the  consideration  was  111.  616  ;  Taggart  v.  Stanbery,  2  Mc- 

differenl  in  kind  from  that  expressed  Lean  546  :  Wheeler  v.  Billings,  38  N. 

in  the  deed,  and  upon  well-considered  Y.  264  ;  Adams  v.    Hull,  2  Denio  (N. 

authority,  is  not  allowable."  Y.)306  ;  Miller  v.  McKenzie,  95  N.  Y. 

iMcKinster   v.   Babcock,  26  N.  Y.  578  ;  Scoggin  v.  Schloath,  15  Ore.  383, 

378.     See  Truscott  v.    King,  6   N.  Y.  15  Pac.  Rep.  635. 

147;  Lawrence  v.  Tucker,  23 How.  14.  :i  Buford    v.  Shannon,  95  Ala.  211, 

•  Bingham    v.  Weiderwax,   1   N.  Y.  10  So.  Rep.  263;  Leach  v.  Shelby,  58 

514  :  Baker  v.  Connell,  1  Daly  (N.  Y.)  Miss.   681;  McKinster  v.  Babcock,  26 

470;  Altringer  v.   Capeheart,   68   Mo.  N.    Y.    380;  McCrea   v.  Purmort,    16 

411  :    Miller  v.  McCoy,    50   Mo.    214;  Wend.     (N.    Y.)    469;  Ham   v.    Van 

Rhine  v.   Ellen,  86  Cal.  868,  870 ;  San-  Onlen,   84    N.    Y.    257;  Hebbard   v. 

ford  v.  Sanford,  61   Barb.  (N.  Y.)  303  ;  Eaughian,    70   N.  Y.    54;    Baird    v. 

\ni..i   v.    Erie    Railway    Co.,    81     N.  Baird,  145  N.  Y.  866,  40  N.  E.   Rep. 

Y     i'.'.'l  ;      Baker     v.     Union      Mutual  222. 

l-if"  I"-  Co.,  18  N.  Y.  887  ;   Barper  v.  *  Geist  v.  Geist,  2  Pa.  St.  441. 


§223  INSUFFICIENT   CONSIDERATION. 

secured  by  mortgage,  the  contract  is  valid  and  may  be 
set  up  as  a  defense  to  a  suit  charging  the  husband  with 
mortgaging  the  lands  to  his  children  in  fraud  of  credit- 
ors.1 The  liability  of  a  surety  on  a  bond  for  the  acts  of 
his  principal  is  a  sufficient  consideration  for  a  mortgage 
given  as  indemnity.2 

§  223.  Insufficient  consideration.— A  deed  from  a  debtor 
to  his  creditor  is  voluntary  and  not  founded  on  a  sufficient 
consideration  if  it  is  given  for  a  pre-existing  debt  which 
was  afterward  treated  by  the  parties  as  still  due.3  And, 
as  against  creditors  of  an  insolvent,  a  party  cannot  make 
title  to  his  property  as  a  purchaser  for  a  valuable  consid- 
eration, where  what  purports  to  be  the  consideration  is  a 
debt  against  a  third  person  which  is  found,  as  matter  of 
fact,  to  be  worthless  ;  and  this  is  true  even  though  the 
transaction  was  in  good  faith  on  the  part  of  the  vendee.4 
So  a  conveyance  in  consideration  of  future  services  has 
been   held   void  against  existing  creditors.5 


1  Goff  v.  Rogers,  71  Ind.  459.  3  Oliver  v.  Moore,  23  Ohio  St.  47!)  ; 

s  State   v.    Hemingway,     69    Miss.  Starr  v.  Starr,  1  Ohio  321. 

491,  10  So.  Rep.  575.     See  Tudor  v.  De  4  Seymour  v.  Wilson,  19  N.  Y.  417. 

Long,    18  Mont.   499,   46    Pac.    Rep.  5  Lehman    v.    Bentley,    60    N.    Y. 

258.  Super.  Ct.  478,  18  N.  Y.  Supp.  778. 


CHAPTER  XVI 


INDICIA  OR  BADGES  OF  FRAUD. 


Suppression  or  concealment  — 
Not  recording  —  Subsequent 
fraud. 

Evidence  aliunde. 

Concealment  in  fraud  of  bank- 
rupt act. 

Absolute  conveyance  by  way 
of  security. 

Excess  of  property  mortgaged. 

Insolvency. 

Sales  upon  credit. 

Unusual  acts  and  transactions. 

Effect  of  relationship  upon 
debtor's  transactions. 

Prima  fade  cases  of  fraud. 

Comments. 

"  Fraud  is  one  of  the  broadest  issues  known  to  the  law."  —  Vann,  J.,  in  White  v.  Benjamin,  150 
N.  V.,  265,  11  N.  E.  Rep.  956. 


224. 

Tlic  creditor's  embarrassments 
—  Proof  of  fraud. 

g  235. 

225. 

Badges  of  fraud  defined. 

226. 

Question  for  the  jury. 

236. 

227. 

Circumstantial  and  direct  evi- 
dence. 

237. 

228. 

Recital  of  fictitious  considera- 
tion. 

238. 

229. 

Antedating  instrument. 

238a 

230. 

Description  of  the  property. 

239. 

231. 

Conveyance  of  whole  estate. 

240. 

231a. 

Continued  possession. 

241. 

232. 

inadequacy  of  purchase  price. 

242. 

233. 

Transfer  pending  suit. 

234. 

K\  idence  of  secrecy. 

243. 

234a. 

Secrel  trust. 

244. 

§  224.  The  creditor's  embarrassments  — Proof  of  fraud. — 
The  practical  difficulties  which  a  creditor  encounters  in 
seeking  to  discover  equitable  assets,  or  to  reach  property 
fraudulently  alienated  by  the  debtor,  have  already  been 
the  subject  of  comment.1  A  transaction  or  conveyance 
having  every  appearance  of  fairness  and  legality,  and  to 
which  the  ordinary  presumptions  of  good  faith  attach,2  is 
usually  presented  at  the  threshold  of  the  litigation.  The 
debtor,  and  the  fraudulent  alienees  acting  in  collusion 
with  him,  will  be  found,  in  most  instances,  to  have  taken 
ry  pre<  aution  to  hide  the  evidences  and  traces  of  their 
frauds    behind    barriers    of    apparent   good    faith,3   and, 


6,  18  v.  Schoolfield,  100  U.  S.  L49,  16  S.  C. 

Jones  \  .  Simpson,  1 L6  I'.      Rep.  225. 
8.  815,  6  s.  C.   Rep.   588     Bamberger         '  Cowling  v.  Estes,  15  111.  A.pp.  201. 


§224  creditor's  embarrassments. 


ordinarily,  the  guilty  participants  develop  into  wit- 
nesses prolific  of  plausible  statements  and  ingenious 
subterfuges  devised  to  uphold  the  colorable  transactions 
An  intent  to  defraud  is  not  proclaimed  or  published  to 
the  world,  but,  on  the  contrary,  the  usual  course  of  the 
guilty  participants  is  to  give  to  the  contract  the  appear- 
ance of  an  honest  transaction,  and  to  have  the  conduct  of 
the  interested  parties  correspond,  as  far  as  possible;,  with 
a  bona  fide  act.1  Parties  practicing  fraud  naturally  and 
almost  uniformly  resort  to  expedients  to  conceal  the  evi- 
dence of  it.2  Fraud  always  takes  a  tortuous  course,  and 
endeavors  to  cover  and  conceal  its  tracks.3  Lord  Mans- 
field said  :  "  Hardly  any  deed  is  fraudulent  upon  the  mere 
face  of  it."4  Chief-Justice  Bricknell  observed:  "Where 
a  fraud  is  contemplated  and  committed  upon  creditors, 
concealment  of  it  is  the  first,  and  generally  the  most  per- 
sistent, effort  of  those  who  are  engaged  in  it.  Publicity 
would  render  their  acts  vain  and  useless.  Leaving  direct 
and  positive  evidence  accessible  to  those  injured  by  it 
would  be  the  equivalent  of  a  confession  of  the  culpable 
intent,  and  of  the  defeasible  character  of  the  transaction. 
There  are  numerous  circumstances,  so  frequently  attend- 
ing sales,  conveyances,  and  transfers  intended  to  hinder, 
delay  and  defraud  creditors,  that  they  are  known  and 
denominated  badges  of  fraud.  They  do  not  constitute  — 
are  not  elements  of  fraud,  but  merely  circumstances  from 
which  it  may  be  inferred."5 

The  question  presents  itself,  How  can  a  creditor  most 
effectually  thwart  the  deep-laid  schemes  of  the  debtor  and 


1  Tognini  v.  Kyle,  15  Nev.  463.  Weaver  v.  Owens,  16  Ore.  301,  18  Pac. 

'l  Sarle  v.  Arnold,  7  R.  I.  585  ;  Cowl-  Rep.  57!) ;  Hickman   v.  Trout,   83  \  a. 

ing  v.  Estes,  15  111.  App.  261.  491,  3  S.  E.  Hop.    131  ;    State,  ex  rel. 

3  Marshall   v.    Green,  24  Ark.   418.  Brown  v.  Mitchell,   102   N.  C.  347,  '.' 

See  §  13.  S    E.    Rep.  702;     Earwick    v.   \V,,i 

"Worseley    v.    Demattos,    1    Burr,  dington,  73  Iowa  302,34   X.  W.  Rep 

467,484.  868:   Williams  v.    Barnett,   52   Tex. 

6  Thames  v.  Rembert,  63  Ala.  567  ;  130. 


400  PROOF    OF    FRAUD.  §224 

his  fraudulent  alienees,  and  overcome  the  usual  presump- 
tions of  honesty  and  good  faith  which  the  parties  will 
invoke?  No  witness  can  look  into  the  minds  of  the  parties 
and  thus  be  able  to  swear  positively  that  they  intended  to 
defraud  the  creditors  of  the  vendor  ;  and  hence,  as  we 
have  already  shown  in  this  discussion,1  fraud  can  gener- 
ally be  established  only  by  facts  and  circumstances  which 
tend  directly  or  indirectly  to  indicate  its  existence.2  It  is 
said  in  Maryland  :  "  Although  the  actions  of  men  can  be 
conclusively  proven,  the  motives  which  lurk  in  their 
bosoms  and  control  their  actions  are  not  susceptible  of 
positive  proof."  Experience  shows  that  positive  proof 
of  fraudulent  acts  is  not  generally  to  be  expected,  and  for 
that  reason,  amoncx  others,  the  law  allows  a  resort  to  cir- 
cumstances  as  a  means  of  ascertaining  the*  truth.4  "  A 
deduction  of  fraud,"  says  Kent,  "  may  be  made  not  only 
from  deceptive  assertions  and  false  representations,  but 
from  facts,  incidents,  and  circumstances  which  may  be 
trivial  in  themselves,  but  decisive  evidence  in  the  given 
case  of  a  fraudulent  design."5  "  Circumstances  altogether 
inconclusive.'1  says  Clifford,  J.,G  "  if  separately  consid- 
ered, may,  by  their  number  and  joint  operation,  especially 
when  corroborated  by  moral  coincidences,  be  sufficient  to 
constitute  conclusive  proof."7  Or  they  may  be  "  a  link 
in  a  chain,  which,  altogether,  is  very  strong.'' 8  Wills 
says  : 9    "  Although  neither  the  combined  effect  of  the  evi- 


1  See§   18.  Hendrickson  v.  People,   10  N.  Y.   13, 

5  Thomas  v.  Sullivan,  13  Nev.  249  ;  81;  Moore  v.  United  States,  150  U.  S. 

Wbeelden  v.  Wilson,  44  Me.  18.  60,  14  S.  C.  Rep.  26.     In  New  York 

•Zimmer   v.  Miller,   64   Md.   300.    1  Mutual  Life  Ins.  Co.  v.  Armstrong,  117 

\<l    Rep-  358  U.  S.  591,  6  S.  C.  Rep.  877,  the  action 

'Castle  v.    Bullard,    2:s  Bow.    17'J,  involved   the  obtaining  of  an  insur- 

181    Goshorrj  v.  Bnodgrass,  1 7  W.  Va.  ance  policy  for  a  fraudulent  purpose, 

717.  and  evidence  was  admitted  that  poli- 

-  Kent's  Com.  184  cies   in    other    companies    had    been 

tie  v.  Bullard,  33  Eow.  187.  obtained  with  like  intent. 

iderable    latitude    (mould    be  BEngraham  v.  Pate,  51  Ga.  587. 

allowed   on  the  question  of  motive.  » Wills  on  Circumstantial  Ev.,  p.  278. 


§  224  PR!  »OF   OF    FRAUD.  40! 

dence,  nor  any  of  its  constituent  elements,  admits  of 
numerical  computation,  it  is  undubitable  that  the  proving 
power  increases  with  the  number  of  the  independent  cir- 
cumstances and  witnesses,  according-  to  a  geometrical  pro- 
gression. 'Such  evidence,'  in  the  words  of  Dr.  Reid, 
'  may  be  compared  to  a  rope  made  up  of  many  slender  fil- 
aments twisted  together.  The  rope  has  strength  more 
than  sufficient  to  bear  the  stress  laid  upon  it,  though  no 
one  of  the  filaments  of  which  it  is  composed  would  be  suf- 
ficient for  that  purpose.'  "'  It  can  seldom  be  the  duty  of 
the  court  to  instruct  the  jury  that  a  single  fact  will  war- 
rant the  jury  in  finding  fraud.  All  the  facts  surrounding 
the  transaction  must  be  taken  into  account  collectively.' 
The  attention  of  the  jury  should  be  called  to  the  effect  of 
the  evidence  as  a  whole  ;  it  is  error  to  take  up  each 
circumstance,  one  by  one,  discussing  it  with  the  remark 
that  it  does  not  prove  the  case.3  The  judgment  must  be 
based  "  upon  all  the  circumstances  of  the  particular 
case."  4  Clear  proof  leading  to  a  "  hearty  conviction"  is 
not  the  test,  but  rather  proof  that  creates  a  belief  that  a 
fraud  has  been  perpetrated.5  The  frequency  with  which 
fraud  is  practiced  upon  creditors  ;  the  difficulties  of  its 
detection;  the  powerful  motives  which  tempt  an  insolvent 
debtor  to  commit  it ;  °  the  plausible  casuistry  by  means 
of  which  it  is  sometimes  reconciled  to  the  consciences 
even  of  persons  whose  previous  lives  have  been  without 
reproach  ;  these  are  the  considerations  which  prevent  the 
court  from  classing  it  among  the  grossly  improbable 
violations  of  moral  duty;  and  therefore  judges  often   pre- 


1  Citing  Reid's  Essay  on  the  Intel  *  Wait  v.  Bull's  Head  Bank,  19  X 
lectual  Powers,  Chap.  III.  B.    R.  501  ;  Cox  v.   Cox,  39  Kan.   121, 

2  Sleeper   v.    Chapman,     121    Mass.  17  Par.  Rep.  847. 

404-409.  5Gumberg   v.   Treusch,    L03   Mich. 

3  Montgomery   Web  Co.   v.  Dienelt,  543,61  N.  W.  Rep.  872. 
133  Pa.  St.  585,  19  Atl.  Rep.  428.  "  See  §  '2. 

26 


402  BADGES    OP    FRAUD.  §  225 

sume  it  from  facts  which  may  seem  slight.1  "  Fraud," 
says  the  Supreme  Court  of  Iowa,  "cannot  always  be 
shown  by  direct  evidence,  but  is  usually  proved  by  circum- 
stances. Neither  can  the  knowledge  of  or  partici- 
pation in  fraudulent  designs  and  transactions  be 
proved  in  many  cases  except  by  circumstances."2 
The  very  charge  of  fraud  "implies  color  and  dis- 
guise, to  be  dissipated  by  indicia  alone." :  The  signs 
or  earmarks  of  fraud  instanced  in  Twyne's  Case4  have 
already  been  given,5  and  should  be  kept  fresh  in  the 
memory  of  parties  interested  in  this  class  of  litigation. 
Mr.  Roberts  says,  that  the  general  conclusion  to  be 
derived  from  this  remarkable  case  is  "that  evidence  of 
the  fraudulent  intent  supersedes  the  whole  inquiry  into 
the  consideration,  for  no  merit  in  any  of  the  parties  to 
a  transaction  can  save  it  if  it  carries  intrinsically  or  extrin- 
sically  the  plain  characters  of  fraud." '  1 1  may  be  observed 
that  extrinsic  proof  of  fraud  can  rarely  be  found  unless  it 
be  in  cases  where  the  possession  of  a  debtor  contradicts 
''  the  visible  purport  of  an  absolute  conveyance." 

§  225.  Badges  of  fraud  denned  —  Badges  of  fraud  are 
suspicious  circumstances  that  overhang  a  transaction,7 
or  appear  on  the  face  of  the  papers.8  The  possible  indicia 
of  fraud  are  so  numerous9  that  no  court  could  pretend 
to  anticipate  and  catalogue   them."1     A   single   one    may 


1  Goshorn  v.  Snodgrass,   17  W.  Va.         'Roberta    on    Fraudulent    Convey- 
ances, 546. 
•Craig  v.Fowler.  59  Iowa  203,   13         '  Eelms  v.  Green,  105  N.  C.  265,  II 
N.  W.  Rep.  116.  S.  E.  Rep.  170. 

Water  bur  j      v.      Sturtevant,      18         8  Douglass  Merchandise  Co.  v.  Laird, 
Wend.  (N.  Y.)  853,  362,  per  Co  wen,  J.;      37  W.  Va.  687,  i;  S.  E.  Rep.  188. 
King  v.  Moon,  42  Mo.  555.  "See   Bank   v.   Gilmer,    116   N.  C. 

;  ■■  Rep  80,  2  1  !oke  212).     See  Davis     685.  22  S.  E.  Rep.  2. 

bwartz,   155   U    S.  639,  15  S.   C  ">  Phinizj  v.  Clark,  62. Ga.  623-627; 

!■'•  p  Hickman  v.  Trout,  83  Va.  191,  3  S.  E. 

Rep.  i::i  :  Newman  v.  Kirk,  45  N.  .). 
Eq.  686,  18  All.  Rep.  224. 


§225 


B  UH.I.s    (  if    FRAUD. 


[03 


stamp  the  transaction  as  fraudulent,  and  when  several  are 
found  in  combination,  strong  and  clear  evidence  on  tin- 
part  of  the  upholder  of  the  transaction  will  be  required  to 
repel  the  conclusion  of  fraud.1  "  Badges  are  as  infinite  in 
number  and  form,  as  are  the  resources  and  versatility  of 
human  artifice."  2  The  statutes  of  Elizabeth  produce  the 
most  beneficial  effects,  by  placing  parties  under  a  dis- 
ability to  commit  fraud  in  requiring  for  the  characteristics 
of  an  honest  act  such  circumstances  as  none  but  an  honest 
intention  can  assume.3  A  badge  of  fraud  was  said  by 
Chief-Justice  Pearson,  in  Peebles  v.  Horton,4  to  be  "  a 
fact  calculated  to  throw  suspicion  on  the  transaction," 
and  which  "calls  for  explanation."5  Substantially  the 
same  language  is  used  by  Elliot,  J.,  in  Sherman  v.  Hog- 
land.0     So  in  Pilling  v.  Otis,7  the  court,  in  construing  the 


1  Hickman  v.  Trout,  83  Va.  491,  3 
S.  E.  Rep.  131. 

2  Shealy  v.  Edwards,  75  Ala.  411, 
417. 

3  McKibbin  v.  Martin,  64  Pa.  St. 
356;  Avery  v.  Street,  6  Watts  (Pa.) 
274. 

*  64  N.  C.  376  ;  Shealy  v.  Edwards, 
75  Ala.  417  :  Terrell  v.  Green,  11  Ala. 
213;  Hickman  v.  Trout.  83  Va.  491, 
3  S.  E.  Rep.  131. 

5  In  Hickman  v.  Trout,  83  Va.  491, 
3  S.  E.  Rep.  131,  the  court  says: 
"  Certain  circumstances  are  often 
referedto  as  indicia  of  fraud,  because 
they  are  usually  found  in  cases  where 
fraud  exists.  Even  a  single  one  of 
them  may  be  sufficient  to  stamp  the 
transaction  as  fraudulent.  When 
several  are  found  in  the  same  transac- 
tion, strong  and  clear  evidence  will  be 
required  of  the  upholder  of  the  trans 
action  to  repel  the  conclusion  of 
fraudulent  intent.  In  the  case  here, 
....  quite  a  number  of  the  usual 
badges  of  fraud  are  found  grouped 
together  and  left  unexplained.  These 


are  :  gross  inadequacy  of  price ;  do 
security  taken  for  the  purchase- 
money;  unusual  length  of  credit  for 
the  deferred  instalments  ;  bonds  taken 
payable  at  Ion-  periods,  when  the 
pretence  is  that  the  deferred  instal- 
ments evidenced  by  them  had  already 
been  satisfied  in  the  main  by  ante- 
cedent debts  due  by  the  obligee  to  the 
obligor  :  the  conveyance  made  in  pay- 
ment of  alleged  indebtedness  of 
father  to  son,  residing  together  as 
members  of  one  family:  the  indebt- 
edness and  insolvency  of  the  grantor, 
and  well  known  to  the  grantee;  the 
threats  and  pendency  of  suits:  the 
secrecy  and  concealmenl  of  the  trans- 
action ;  keeping  the  deed  unacknowl- 
edged and  unrecorded  tor  over  a 
year;  grantor  remaining  in  posses- 
sion as  before  the  conveyance,  and 
cautioning  the  kinsman  justice,  who 
took  the  acknowledgment,  to  keep 
the  matter  private,  and  the  relation 
between  grantor  ami  grantee." 

"  7o  I  nd.   lot. 
'  13  Wis.  195. 


404  •  BADGES   I  'I-    FRAUD.  §  225 

meaning  of  the  expression  "badge  of  fraud"  as  used  in 
the  charge  of  a  judge,  said  :  "  It  docs  not  mean  that  the 
evidence  must  be  conclusive,  nor  that  it  must  require  the 
jury  to  find  fraud,  but  only  that  it  is  one  of  the  signs  or 
marks  of  fraud,  and  has  a  tendency  to  show  it.  There 
may  be  great  difference  in  the  weight  to  which  different 
facts,  constituting;  badges  of  fraud,  are  entitled  as  evi- 
dence.  One  may  he  almost  conclusive,  another  furnish 
merely  a  reasonable  inference  of  fraud.  Yet  both  would 
be  badges  of  fraud,  and  either  might  be  so  explained  by 
other  evidence  as  to  destroy  its  effect.  The  books 
accordingly  speak  of  strong  badges  and  slight  badges  of 
fraud,  of  conclusive  badges,  and  badges  not  conclusive, 
meaning  by  the  word  '  badge'  nothing  more  than  that  the 
fact  relied  on  has  a  tendency  to  show  fraud,  but  leaving 
its  greater  or  less  effect  to  depend  on  its  intrinsic 
character."  The  expression  is  used  "to  distinguish  the 
lighter  grounds  on  which  fraud  may  be  established  "  as 
distinguished  from  the  cases  where  the  fraud  is  apparent 
upon  the  lace  of  the  instrument  and  necessarily  involves 
its  invalidity.1  The  circumstances  which  the  law  con- 
siders badges  of  fraud,  and  not  fraud  perse,  should,  as  we 
shall  see,  be  submitted  to  the  jury,  so  that  they  may  draw 
their  own  conclusions.'-'  Where,  then,  a  creditor  shows 
indicia,  or  badges  of  fraud,  the  burden  rests  on  the 
grantee  to  repel  the  presumptions  which  the  facts  so 
shown  generated.8  It  may  here  be  observed  that  when 
the  consideration  for  the  transfer  is  clearly  established, 
and  tin-  transaction  is  in  effect  a  preference,  it  will  not  be 
'ted  by  any  weak,  foolish,  or  even  criminal  conduct  in 
the  way  of  an  attempt  to  sustain  tin;  case  by  manu- 
factured  evidence.* 


Bun-ill  011   Assignments,  §  :J46.  'Mill    v.    Bowman,    35    Midi.    191, 

1    10  T<       133.  per  Cooley,  < '.  J. 

1 1. 11  pll  \.  Mitchell,  ill  Ala.  270 


§§226,227  QUESTION    FOR    THE    URN".  (.05 

>J  226.  Question  for  the  jury. — The  question  of  fraud  in  a 
transfer  must  usually  be  submitted  to  a  jury,'  save  in  a 
few  cases  where  the  transaction  is  manifestly  fraudulent 
upon  its  face.  The  distinction  between  legal  and  equit- 
able jurisdiction  as  to  this  has  already  been  pointed 
out  ;3  and  where  the  suit  is  in  its  nature  purely  equitable, 
the  judge  or  chancellor  is  responsible  for  the  decision, 
though,  of  course,  he  may  secure  the  aid  of  a  jury  to  pass 
upon  framed  issues.'5  Otherwise  the  jury  must  he  per- 
mitted to  consider  and  draw  their  own  inferences  from 
badges  of  fraud,  and  the  court  should  not  interfere  to 
formulate  conclusions  for  them.1  To  say  that  badges  of 
fraud  "constitute  fraud  in  themselves,  would  be  to  carry 
the  doctrine  beyond  the  limits  of  reason  or  authority, 
and  to  shut  out  the  light  of  wisdom  and  truth."  5  Where 
the  entire  suit  is  tried  by  and  submitted  to  the  court, 
without  the  aid  of  a  jury,  as  is  frequently  the  case  in 
equity,  the  same  consideration  and  effect  should  be  given 
by  the  court  to  badges  of  fraud  as  though  ajury  had 
been  summoned. 

§  227.  Circumstantial  and  direct  evidence.— Circumstantial 
evidence  is  often  the  only  kind  of  evidence  of  which  the 
case  admits.0  In  Kempner  v.  Churchill ~  it  appeared  that 
the  purchaser  said  to  the  debtor  :  "  You  had  better  not 
delay  this  matter.      You  had  better  let  me  have  the  goods 


'Weaver   v.   Owens,    16    Ore.  304,  Herkelratli    v.    Stookey,  <;:'.    III.  486; 

18  Pac.  Rep.  579;  State  v.  Mason,  112  Kin-  v.  Russell,  40  Tex.  183. 

Mo.  374,  20  S.  W.   Rep.  629  ;  McKel-  '  Wilson  v.  Lott,  5  Fla.  316. 

lar  v.  Pillsbury,  48  Minn.  396,  51  N.  6  Bartletl    v.  Cleavenger,  35  W.Va. 

W.  Rep.  222 ;  Ferris  v.  McQueen,  94  719,    II   S.    E.    Rep.    273;    Goshonfs 

Mich.  367,  54  N.  W.  Rep  164 ;  Ladnier      Ex'r  v.  S Igrass,    IT  W.    Va.    ?H 

v.   Ladnier,   64  Miss.   373,  t   So.  Rep.  Reynold's  Admr.  v.  Gawthrop,  37  W. 

492.  Va.  L3,  16  S.  E.  Rep.  364  :  Davis  S.  M. 

2  See§  51.  Co.  v.  Dunbar,  29  W.  Va.  617,  622,  2 

3Dunphy   v.  Kleinsmith,  11  Wall.  S.  E.  Rep.  91. 

615.  7  8  Wall.  369. 

4  Leasure   v.   Coburn,   57  End.  274  ; 


FICTITK  »US   CONSIDERATE  IN. 


§  228 


and  put  the  money  in  your  pocket,  and  let  the  creditors 
go  to  the  devil."  The  circumstantial  evidence  which  was 
held  ample  to  confirm  this  direct  evidence  of  fraud  was 
as  follows  :  First,  false  receipts  given  for  full  value  on 
Saturday  ;  second,  account  of  stock  made  out  on  Sun- 
day  ;  third,  removal  of  the  goods  into  a  cellar  on  Mon- 
day. "  It  is  true  the  fraud  must  be  in  the  inception  of 
the  transaction,  but  the  subsequent  acts  of  the  parties  are 
calculated  to  explain  the  motives  which  actuated  them 
in  the  beginning,  and  give  tone  to  the  then  original 
purpose."  ' 

£  228.  Recital  of  fictitious  consideration.  — Let  us  now  pro- 
ceed to  consider  more  minutely  the  particular  circum- 
stances and  surroundings  of  a  transaction  which  constitute 
badges  of  fraud,  or  awaken  suspicions  or  create  presump- 
tions of  the  existence  of  fraud. 

A  false  statement  of  the  consideration  of  a  mortgage, a 
or  of  a    conveyance3  or  transfer,4  or  the  creation   of   a 


•  Adler    v.  Apt,  31    Minn.    348,   350. 

See  Bungerford  v.  Earle,  2  Vein.  261; 

Blennerhassetl  v.  Sherman,  L05  U.  S. 

100;  Blackmail  v.  Preston,  24  111.  App. 

24<i  :  Coates  v.  Gerlach,  44  Pa.  St.  43. 

'  United  States  v.  Griswold,  7  Saw- 

yer  306  .    Stinson  v.  Hawkins,  16 Fed. 

Rep.  B50;  Patrick  v.  Riggs,  in.-)  Midi. 

616      Lynde  v.    McGregor,    13    Allen 

Mass.)  179  .  McKinster  \.  Babcock,  26 

N.    V.   38*2  :    Weeden   v.    Bawes,    10 

I  '..mi    :>o  ;    Units  v.  Peacock,  2:;  Wis. 

v.i      Blakeslee   v.  Rossman,  43  Wis. 

123  ;   Mason  v.    Franklin.    58   la.    507, 

12  N.  W.  Rep.  554  ;  Ferris  v.  McQueen, 

in   Mich.   ::»;:.   :,i    N.   w.    Rep.    164: 

Sanson   <.     Bean.  51  Minn.  546,  53  N 

w    Rep   871  .  Rice  v.  Morner.  64  Wis. 

•  N.  W.  Rep.    668;    Beintze  v. 

Bentley,  ;;i   \.   .1     Eq  562  ;   Benrj  v. 

Barrell,   :.i    Ark    569,   228.  W.   Rep. 

1  .    Berringlon,  7  Ala.  1  12  ; 

•  us,  71  I  ml.  459  :  <  lordes  \  . 


Straszer,  8  Mo.  App.  61  ;  Venable  v. 
Bank  of  U.  S.,  2  Pet.  112,  per  Story, 
J.;  King  v.  Bubbell,  42  Midi.  599,  4 
N.  W.  Rep.  440;  per  Cooley,  J.  If 
the  actual  amount  of  the  debt  in- 
tended  to  be  secured  by  a  deed  of 
trust  is  more  than  the  actual  value  of 
I  lie  property,  it  is  immaterial  that  the 
deed  recites  that  it  is  given  to  secure 
a  Larger  amount  than  is  actually  due. 
Sawyer  v.  Bradshaw,  125  111.  440,  17 
N.  F.  Hep.  812.  See  Keith  v.  Proctor, 
8  Baxt.  (Tenn.)  189  ;  Shin-as  v.  Caig, 
7  Cranch  50;  Dobson  v.  Snider,  70 
Fed.  Hep.  10;  Davis  v.  Schwartz, 
155  U.  S.  644,  15  S. 
Wood  v.  Scott,  55  la. 
Rep.  465;  Taylor  v 
la.   562,  24  N.  W.  Hep.  40. 

:;  Benne  v.  Schnecko    100  Mo.  2*>0, 
13  S.   W.  Rep.  82. 

1  Peebles  v.    Borton,   64  X.  <\  374  ; 
Enders  v.  Swayne,  8  Dana  (Ky.)  105  ; 


C.  Rep.  237  ; 
111,  7  N.  W. 
Wendling,   66 


§228 


i  M  ruious  1 1  >nsii  ii:k.\  rit  i\. 


407 


fictitious  or  exaggerated  '  indebtedness,2  or  a  misleading 
statement  as  to  an  encumbrance3  is  a  badge  of  fraud,  and 
is  a  proper  element  for  the  consideration  of  the  jury  in 
determining  the  bona  fides  of  the  transaction.1  Such  a 
recital  does  not  usually  render  the  instrument  voider 
se,s  and  in  some  instances  the  transaction  will  be  allowed 
to  stand  for  the  amount  of  the  consideration  given,8  and 
will  be  void  only  for  the  excess 7  So  the  issuing  of  an 
execution  for  an  excessive  amount  will,  in  the  absence  of 
bad  faith,  avail  the  plaintiff  to  the  extent  of  the  debt 
remaining  due.8  It  may  be  observed  here  that  the 
recital  of  the  excessive  consideration  must  be  inten- 
tional, and  not  the  result  of  a  mere  mistake  in  computa- 
tion,9 and  both  parties  must  have  participated  in  the 
fraudulent  purpose.10     Hence,  where  a  wife  is  ignorant 


Thompson  v.  Drake,  3  B.  Mon.  (Ky.) 
570  ;  Foster  v.  Woodfin,  11  Ired.  (N. 
C.)  Law  346;  Gibbs  v.  Thompson,  7 
Humph.  (Term.)  179  ;  Perry  v.  Hardi- 
son,  99  N.  C.  29,  5  S.  E.  Rep.  230; 
Turbeville  v.  Gibson,  5  Heisk.  (Tenn.) 
565  ;  Marriott  v.  Giveus,  8  Ala.  694  ; 
Divver  v.  McLaughlin,  2  Wend.  (N. 
Y.)600;  Newman  v.  Kirk,  45  N.  J. 
Eq.  677,  18  Atl.  Rep.  224  ;  Bartlett  v. 
Cleavinger,  35  W.  Va.  719,  14  S.  E. 
Rep.  273  ;  Benne  v.  Schnecko,  100  Mo. 
250,  13  S.  W.  Rep.  82  ;  Seger's  Sons 
v.  Thomas  Bros.,  107  Mo.  644,  18  S. 
W.  Rep.  33 ;  Harris  v.  Russell,  93 
Ala.  59,  9  So.  Rep.  541. 

1  Kellogg  v.  Clyne,  54  Fed.  Rep. 
696,  4C.  C.  A.  557. 

'2  Winchester  v.  Charter,  97  Mass. 
140  :  Newman  v.  Kirk,  45  N.  J.  Eq. 
677,  18  Atl.  Rep.  224. 

3  Newman  v.  Kirk,  45  N.  J.  Eq. 
687,  18  Atl.  Rep.  224. 

4  Miller  v.  Lockwood,  32  N.  Y.  299  ; 
Willison  v.  Desenberg,  41  Mich.  150, 
2  N.  W.  Rep.  201;  Lawson  v. 
Alabama  Warehouse  Co.,  80  Ala. 
343.     Elliott,    J.,    said,    in    Goff  v. 


Rogers,  71  Ind.  461:  "  There  are  no 
cases,  however,  that  we  have  been 
able  to  find,  going  so  far  as  to  hold 
that  a  mortgage  is  to  be  conclusively 
presumed  fraudulent  from  the  bare 
fact  that  it  purports,  on  its  face,  to 
secure  a  sum  in  excess  of  the  debt 
really  due.  The  farthest  thai  any  of 
the  cases  go.  except  those  based  on  an 
express  statute,  is  to  hold  that  the 
fact  that  a  mortgage  expresses  on  its 
face  an  amount  materially  greater 
than  the  true  amount  of  indebtedness, 
is  a  badge  of  fraud." 

5  Frost  v.  Warren,  42  N.  V.  207; 
Barkow  v.  Sanger,  47  Wis.  505,3  N. 
W.  Rep.  16  ;  Cole  v.  Yancey,  62  Mo. 
App.  234. 

•  Coleyv.  Coley,  14  N.J.  Eq.  854. 

"Davenport  v.  Wright,  51  Pa.  St. 
292.     See  g§  192,  195. 

8  Harris  v.  Alcock,  10G.  <&  .1    (Md 
227. 

9Kalk  v.  Fielding,  50  Wis.  340,  7 
N.  W.  Hep.  296. 

10  Carpenter  v .  Muren,  42  Barb.  (N. 
Y.)  300.     See  £199. 


408  FICTITIOUS  CONSIDERATION.  §228 

and  innocent  of  fraud,  the  insertion  of  an  inaccurate  or 
untrue  recital  in  a  settlement  will  not  vitiate  it.1  An 
immaterial  misrecital  will  not  be  regarded.2 

It  is  not  our  purpose,  however,  to  lead  the  reader  to 
consider  an  exaggerated  or  false  recital  of  consideration 
as  an  unimportant  factor  in  proving-  fraud.  Far  from  it. 
In  Hawkins  v.  Alston,3  Chief-Justice  Ruffin  forcibly 
said  :  "  No  device  can  be  more  deceptive  and  more  likely 
to  baffle,  delay,  or  defeat  creditors,  than  the  creating 
incumbrances  upon  their  property  by  embarrassed  men, 
for  debts  that  are  fictitious  or  mainly  so.  The  false  pre- 
tense of  a  debt,  or  the  designed  exaggeration  of  one,  is 
an  act  of  direct  fraud."  Mr.  May  observed,  that  the  fact 
that  confession  of  judgment  "  covers  more  property  than 
is  necessary,  for  satisfying  the  debt,  is  a  suspicious  cir- 
cumstance." 4  Sharswood,  J.,  declared  that  "a  judgment 
confessed  voluntary  by  an  insolvent  or  indebted  man  for 
more  than  is  due,  is  prima  facie  fraudulent  within  the 
statute  of  13  Eliz.  c.  5."5  Then,  in  Warwick  v.  Petty,0 
it  is  asserted  that  a  judgment  laid  upon  property  of  a 
debtor  for  more  than  was  actually  due  and  owing,  is  a 
clear  violation  of  the  policy  of  the  law,  and  is  fraudulent, 
and  subject  to  attack  by  junior  creditors.7  The  judg- 
ment,   however,  must    be    knowingly,   intentionally,    and 

Kevan   v.  Crawford,  L.  R.  6  Ch.  Tolputt    v.    Wells,    1    M.   &    S.    395; 

Benton  v.  Thornhill,  7  Taunt.  149,  2 

•Fetter  v.  Cirode,  4B.  Mon.  (Ky.)  Marsh.    127;    Hodgson    v.    Newman, 

l-l  ;  Norris  v.  Lake,  89  Va.  518,  16  8.  mentioned  in  Holbird  v.  Anderson,  5 

B.    Rep.   663  ;  Schroeder   v.  Bobbitt,  T.  R.  236,  239. 

108  Mo.  290,  188.  W.  Rep.  1093.     In  5  Clark  v.  Douglass,  G2  Pa.  St.  415. 

Keagj    v.  Trout,  85  Va.  399,  7  S.    E.  See  Werner  v.  Zierfuss,  162  Pa.  St. 

Rep    829,  the  court  says  :  "  It   Deed  860,  29  Atl.  Rep.  737. 

onlj  be  added  thai  the  validity  of  a  II  \.  J.  Law  552. 

deed  of   trust   executed  bona  fide  is  '  Clapp  v.   Ely,  27  N.  -J.  Law  555. 

no!    affected    bj     the   fad    thai    the  Compare  Sayre  v.  Hewes,   32  N.  J. 

amount  of  1  be  debl  Becured  is  nol  de-  Eq.  652  ;  Hoag  v.  Sayre,  32  N.  J.  Eq. 

scribed  with  accuracy ."  552;    Holt   v.  Creamer,  34  N.  J.  Eq. 

1  [red.  Eq   (N.  C.)  115.  is;  .  Russell  v.  Wmne,  37  N.  V.  596. 

1  M.i .      Fraud.  <  !onv.   |».  88  ;   1  iting 


§§229,230  ANTEDATING    INSTRUMENT. 

fraudulently  obtained  for  a  greater  sum  than  was  due.1 
The  same  rule  applies  to  a  mortgage  given  lor  more  than 
the  amount  actually  due.3  A  transaction  which,  on  its 
face,  speaks  an  entirely  different  language  from  the  real 
one,  will  always  be  "viewed  by  the  law  with  the  highest 
degree  of  distrust  and  disapprobation,"  3  and  will  be  "  the 
object  of  doubt  and  suspicion,"  '  though,  as  we  have  seen, 
suspicion  alone  is  insufficient  to  establish  fraud."' 

It  results,  then,  from  a  review  of  the  authorities,  that 
a  false  recital  of  consideration  in  an  instrument,  in  the 
absence  of  explanation,  justifies  a  finding  of  fraud  ;  that 
the  misrecital  must  be  intentional  and  not  accidental,  and 
is  subject  to  explanation  ;  and  that  the  evil  design  must 
be  mutual  ;  otherwise  the  transaction  will  stand  against 
creditors  except  as  to  the,  excess. 

§  229.  Antedating  instrument. —  Antedating  an  instru- 
ment seems  to  be  regarded  as  an  indicium  of  fraud,''  and 
testimony  tending  to  establish  a  fraudulent  antedating  of 
a  paper  is  competent.7  Antedating  a  mortgage,  though 
very  improper,  does  not,  however,  affect  a  mortgagee 
who  is  not  privy  to  it.8  It  may  be  remarked  that  the 
date  of  a  deed  is  not  generally  regarded  as  an  essential 
part  of  the  instrument  ;  it  may  be  good  with  an  impos- 
sible date,  or  have  no  date;  and  though  the  date  is  prima 
facie  evidence  of  the  time  of  delivery,  it  may  be  con- 
tradicted. 

§  230.  Description  of  the  property. —  A  suspicion  or 
inference  of  fraud  is  sometimes  predicated  of  a  loose  and 

■Fairfield    v.    Baldwin,     12    Pick.  8  Ayres  v.  Husted,   15  Conn.  513. 

(Mass.)  388  :  Davenport  v.  Wright,  51  4  Pickett  v.  Pipkin,  64  Ala.  520 

Pa.  St.  293.     Compare  Peirce  v.  Part  Sec  §§  5,  <i. 

ridge,  3   Met.    (Mass.)   4-1;  Felton  v.  "Wright   v.  Hencock,  3  Munf.  (Va.) 

Wadswortli,  7  Cush.  (Mass.)  589  521.    Bui  compare  Patterson  v.  Boden- 

-  Hanson  v.  Bean,  51  Minn.  546,  53  hamer,  9  lied.  (N.  ( '.  1  Law  96. 

N.  W.    Rep.    871:    Stuart    v.    Smith  '  Moog  v.  Benedicks,  49  Ala.  513. 

(Tex.  Civ.  App..  A  pi.  5,  1893)21  S.  W.  s  Lindle  v.  Neville,  13  S.  &  R   (Pa.) 

Rep.  1026.  228. 


410  CONVEYANCE    OF    WHOLE    ESTATE.  §23] 

vague  description  of  the  goods  or  property  conveyed. 
••  All  the  entire  stock  of  goods  in  the  possession  of  the 
said  Lee,  in  his  store  in  the  city  of  Williamsburg,"  were 
the  words  used  in  Lang  v.  Lee,1  and,  in  commenting 
upon  the  case,  the  court  said  :  "  Does  this  look  like  a  real 
bona  fide  transaction  ?"  A  clause  in  a  mortage  by  which 
after-acquired  property  was  attempted  to  be  covered,  was 
regarded  as  a  feature  for  the  consideration  of  the  jury  in 
Gardner  v.  McEwen.2  So  in  a  case  in  Tennessee,3  in 
which  the  description  in  the  conveyance  was  so  indefinite 
and  general  that  it  was  impossible  to  designate  the 
property,  this  was  considered  a  circumstance  to  be  taken 
into  account  by  the  jury  as  an  evidence  of  fraud.4  Still, 
it  does  not  follow  by  any  means  that  an  imperfect 
description  of  property  in  an  instrument  is  of  much 
weight  as  a  badge  of  fraud.  Carelessness  in  the  character 
of  the  description  in  conveyances  of  realty,  or  in  bills  of 
sale,  or  mortgages  of  personalty,  is  very  common  in  trans- 
actions concerning  the  good  faith  of  which  no  question 
can  fairly  be  raised.  Misdescriptions  are  often  the  handi- 
work of  honest  but  blundering  scriveners. 

§  231.  Conveyance  of  whole  estate.—  Lowell,  J.,  observes  : 
"  I  have  often  decided  that  the  conveyance  of  the  whole 
property  of  a  debtor  affords  a  very  violent  presumption 
of  a  fraudulent  intent,  so  far  as  existing  creditors  are  con- 
cerned." r°     In    Bigelow   v.    Doolittle,0   however,  the  court 

3  Eland.  1  Va.)  423.  Fredericks,  16  N.  J.  Eq.  2<i7 ;  ('lurk  v. 

19  N.  ?.  125.  Wise,  39  How.    Pr.    (N.    Y.>    !)7  :     re- 

Overton  v.  Holinshade,    5  Hoisk.  versed,  40  N.  Y.  612:  MoneU  v.  Scher- 

T.nn.    683  rick,  54  ill.   270;  Redfield  v.  Buck,  33 

157  Conn  328;   Bradley  v.  Buford,  Si I 

In  re  Alexander,   4  N.   B.   I;.   181  (Ky.),  12;  Reillj  v.  Barr,  34   W.   Va. 

born  \.  Snodgrass,  17  95,    11    s.    E.    Rep.    750;    Benne    v. 

W    Va.  717:  Glenn  v.  Glenn,  17    Iowa  Schnecko,  100  .M<>.  250,  13  S.  W.  Rep. 

01  .  Hartshorn  v.  Barnes,  31  Me.  82;  Daugherty  v.  Daugberty,  104  Cal. 

3arle   \.   Arnold,   7    R.     I     582;  221.  37  Pac.  Rep.  889;  Karll  v  Kuhn, 

Mitchell   v.   Mitchell,  42  8.  C.  475,  20  38  Neb.  589,  57  X    W    Rep.  379. 

H    1.    Rep.  105;  Zimmer  v.  Miller,  64         »36  Wis.  119.     See  r.islmp  v.  Steb- 

00,    1     \tl     Rep.  858;Sayre  v.  bins,  41  Bun  (N.  V.i  246. 


§231  CONVEYANCE    OF    WHOLE    ESTATE.  |il 

refused  to  charge  that  "the  conveyance  of  the  whole 
property  of  a  debtor  affords  a  very  violent  presumption 
of  a  fraudulent  intent,  so  far  as  existing  creditors  arc  con- 
cerned." In  sustaining  the  ruling  the  appellate  court 
observed  that  the  generality  of  the  conveyance  was 
merely  a  circumstance  to  be  considered  by  the  jury  in 
connection  with  all  the  other  facts  of  the  case,  in  deter- 
mining whether  or  not  the  sale  was  fraudulent.  Lyon,  J., 
said:  "Under  some  conditions  the  jury  might  regard 
such  conveyance  as  raising  a  very  violent  presump- 
tion of  fraud,  while  under  other  and  different  conditions 
the  jury  might  properly  determine  that  it  was  but  a  slight 
indication  of  a  fraudulent  intent."  1  Such  a  transfer 
must,  however,  be  regarded  as  altogether  unusual  and 
extraordinary.  The  instances  in  which  such  transactions 
would  occur  in  the  usual  course  of  business  are  very  infre- 
quent, and  when  the  alienation  proceeds  from  an  embar- 
rassed debtor,  it  creates  a  presumption  of  dishonesty  and 
fraud.3  The  transfer,  however,  is  not  to  be  declared  void 
as  matter  of  law  under  such  circumstances.  Hence  a 
sale  by  an  insolvent  debtor  of  all  his  real  and  personal 
estate,  taking  back  notes  payable  in  six,  twelve  and 
eighteen  months,  is  not  per  se  fraudulent ;  to  avoid  it 
there  must  be  a  finding  of  an  actual  fraudulent  intent." 
When  questions  of  relationship  intervene,  the  motive  for 
making  these  absolute  conveyances  becomes  important. 
Hence  where,  pending  a  suit,  a  debtor  transferred  all  his 

1  Bigelow  v.  Doolittle,  36  Wis.  119;  the  burden   in   such  eases    to   prove 

s.  P.  Kerr  v.  Hutchins,   46  Tex.  389-  that  such  debt    was  not    a    bona  fide 

390.  one  is  on  the  creditor.      Basie  v.  Con- 

8  See    Bibb    v.    Baker,    17    B.  Mon.  nor.  5:',  Kan.    71:'.,   :,7   Pac      Rep.  128 

(Ky.),    305;    Wbeelden  v.  Wilson,   44  But  see  contra,  Lehman  v.  Green  hut, 

Me.  30;  Hughes  v.  Roper,  42  Tex.  126;  88    Ala.    47s,  7  So.  Rep.  299. 

Ex  parte    Ames,    1  Low.  501,   1    Fed.  'Clark    v.  Wise,   16  N.  Y     612.     See 

Cases,    746;  Beels    v.   Flynn,  28    Neb.  Bigelow    v.    Doolittle,    36    Wis.     119; 

580,  44 N.  W.  Rep.  732.    Itisotherwise  Alton  v.  Harrison,    I..    R.  4  Ch.    A.pp. 

where  the  conveyance  is  made  to  a  626.     Compare  Bank  of  Ga.   v.   Big 

creditor  in  payment  of   a  debt,  and  ginbottom,  9  Pet.  61. 


412  CONVEYANCE    OB    WHOLE    ESTATE.  .^-31 

property,  save  that  which  was  exempt,  to  his  wife,  and 
hired  out  to  her  for  his  "board,  clothing  and  lodging," 
the  transaction  was  held  to  afford  grounds  for  suspicion, 
and  to  call  for  satisfactory  proof  of  good  faith  and  fair 
consideration.1  Commenting  upon  the  effect  of  the  gen- 
erality of  the  gift,  Mr.  May  says'-  that  it  is,  "when  taken 
in  conjunction  with  other  circumstances,  a  mark  of  fraud3 
for  dolus  versatur  in generalibus  ,A  yet  it  is  no  concluding 
proof  either  under  this  statute  (13  Eliz.  c.  5)  or  by  the 
common  law.""'  Then,  as  we  have  seen6  in  Twyne's 
Case,  the  very  first  mark  of  fraud  specified  was  "  that  the 
gift  was  general,  without  exception  of  the  donor's  apparel, 
or  of  anything  of  necessity."  Chief-Justice  Marshall,  in 
the  leading-  case  of  Sexton  v.  Wheaton,7  observed  : 
"  The  proportional  magnitude  of  the  estate  conveyed 
may  awaken  suspicion,  and  strengthen  other  circum- 
stances ;  but,  taken  alone,  it  cannot  be  considered  as 
proof  of  fraud."  Among  the  prominent  badges  of  fraud 
affecting  a  conveyance  as  to  subsequent  creditors  ma)'  be 
mentioned  the  contracting  of  debts,  and  engaging  in  a 
hazardous  business  or  speculation,  with  the  intention  of 
shouldering  the  risk  of  loss  upon  creditors.  The  cases 
and  principles  appertaining  to  this  subject  have  already 
been  considered/  To  this  class  of  evidence  McCrary,  J., 
adds  another  badge,  viz.:  "  The  fraudulent  disposition  of 
the   remaining  estate  of  the  grantor  verv  soon  after  the 


Dresher   \.  Corson,    23  Flan.  313;         'Citing  Twym  3  Rep.  81a  : 

Booher  \.    Worrill,  ■",:  6a.  235.    See     Stone  v.  Grubham,  2  Bulstr.  225. 

- 1  Sting  Chamberlain   v.  Twyne,  F. 
■a  Fraudulent  Conveyances,     Moo  638;  Nunn  v.  Wilsmore,  8  T.  R. 

[nglise   v.    Grant,   •"">    T.   I;.   ->:;<»: 
Citing     Chamberlain     v.    Twyne     Meux  v.  Bowell,  4   Easl    1;  Janes  v. 
.    1     Moo.  638;    Stile-     Whitbread,   11    < '.    1'..    166;    Alton  v. 
man  v.  Aahdown,  2  Atk.  477;  Mathews     Harrison,    L.    Ft     1    Ch.    App.    622; 
580  .  Ware     Evans  \.  Jones,  11  Jur.  |  N.  S.    784 
irdner,    1..    I:     7    Eq.   :;17.     S 
Blennerh  Sherman,    10513   S.         '  8  Wheat.  229, 250. 

»Se<-  .7  96,  99,  100. 


§§23ia,  232 


CON'IIM   I  D    l'<  >SSESSI<  'N. 


■I  1  5 


conveyance."1      The    conveyance  of   the  greater  part  <>f 

the  assets  of  a  partnership  to  a  corporation  formed  by 
the  partners  in  consideration  of  the  issue  of  stock  was 
held  to  constitute  a  badge  of  fraud  where;  it  was  made 
immediately  before  an  assignment.-' 

§  231a.  Continued  possession.  —  Continued  possession  by 
the  debtor  of  the  property  attempted  to  be  conveyed  is 
a  circumstance  more  or  less  potent  as  evidence  that  the 
debtor  retains  some  hidden  form  of  interest."  But  an 
agreement  with  the  creditor  made;  at  the  time  of.  the  de- 
livery of  the  conveyance  that  the  debtor  should  remain 
upon  the  land  to  care  for  the  stock  kept  thereon  is  not 
necessarily  fraudulent.4  Such  a  compact  may  be  entered 
into  in  perfect  good  faith  and  be  susceptible  of  complete 
explanation. 

£232.  Inadequacy  of  purchase  price. —  As  has  already 
been  shown,  to  enable  a  creditor  to  invalidate  a  sale  of 
property,  tangible  facts  must  be  proved,  from  which  a 
legitimate  inference  of  a  fraudulent  intent  can  be  drawn 
It  will  not  suffice  to  create  a  suspicion  of  wrong,  nor  will 
the  jury  be  permitted  to  guess  at  the  truth.5  Mere  proof 
of  inadequacy  of  price  by  itself  has  been  considered  in- 
sufficient to  implicate  the  vendee  in  the  fraudulent  intent 
or  to  impeach  his  good  faith0  and  inadequacy  of  consid- 


'  Burdick  v.  Gill,  7  Fed.  Rep.  6(38. 
670. 

-  Buell  v.  Rope,  6  App.  Div,  (N.  Y.) 
113,  39  X.  Y.  Supp.  475,  cf.;  First 
Nat.  Bank  v.  Wood,  86  Hun  (N.  Y.) 
491,  33  N.  Y.  Sup]..  777. 

■  See  ('hap.  XVII.  Munson  v.  Ar- 
nold, 55  Mich.  134,  20  N.W.  Rep.  825; 
Foster  v.  Knowles,  42  N.  .1.  Eq.  226,  7 
At  I.  Rep.  290 ;  Zimuier  v.  Miller,  Q4 
Md.  297,  1  Atl.  Rep.  858  ;  Cooper  v. 
Davison.  Si;  Ala.  :!li7,    5   So.   Rep.  650  ; 


Second  Nat.  Bk.  v.   Yeatman,  ■">:'.  Md. 
II:;. 

1  stroii   v.  Swafford,  si    la.  695,  7 1 
N.  W.  Rep.  1023. 
See  §§5,  6. 

'  Jaeger  v.  Kelley,  52  N.  5 
See  Sherman  v.  Bogland,  7-:  [nd.  171  ; 
McFadden  v.  Mitchell,  54  Cal.  629; 
Mathews  v.  Reinhardt,  I  19  III.  635,  37 
N.  E.  Rep.  85  ;  Shober  v.  Wheeler, 
113  X.<\  378,  ISS.  E.  Rep.  328  ;  Bierne 
v.  Ray,  -;  W.  Va.  571,  16  S.  E  Rt  p 
804.     See  §  6. 


414  INADEQUACY    01    PURCHASE    PRICE.  §232 

eration,    unless   extremely   gross,1   does   not  per  se  prove 

fraud."  It  must  appear  that  the  price  was  so  manifestly 
inadequate  as  to  shock  the  moral  sense  and  create  in  the 
mind  at  once,  upon  its  being  mentioned,  a  suspicion  of 
fraud8  It  is  even  considered  that,  in  the  absence  of 
other  evidence  tending-  to  show  fraud,  the  court  would 
not  deem  inadequacy  of  consideration  sufficient  to  do  so.4 
In  North  Carolina  it  has  been  declared  by  recent  decis- 
ions that  inadequacy  of  price,  however  gross,  and  whether 
considered  alone  or  in  connection  with  other  suspicious 
badges,  was  only  a  circumstance  tending  to  show  fraud.0 
Gordon,  ).,  said  :  "  Other  things  being  fair  and  honest, 
mere  inadequacy  of  price  cannot,  of  itself,  beget  even  a 
presumption  of  fraud,  much  less  is  it  per  sc  fraudulent."6 
Still,  authority  is  abundant  to  the  effect  that  where  a 
creditor  or  purchaser  obtains  the  property  or  estate  of  an 
insolvent  debtor  at  a  sacrifice  or  an  under  rate  or  value, 
there  is  a  strong  and  even  violent  presumption  of  a 
fraudulent  intent.7  Thus,  where  a  first  lien  for  $[,200011 
a  farm  worth  $13,000,  was  transferred  for  a  consideration 


1  Archer  v.  Lapp,  12  Ore  202.  6  Pac.  '  Emonds  v.  Termehr,  (in  Iowa  92, 

Rep.  672;   Dawson  \.   Niver,    L9  S.  1 '.  W,  II  X.  W.  Rep.  HIT.     See  Cavender 

606;  Lionberger  v.  Baker,  88M0.  I">1;  v.  Smith,  8  Iowa  360 ;  Boyd  v.  Ellis, 

Witherwas   v.  Riddle,   121  III.  14.").  13  11  Iowa  97. 

Rep.  545  :  Shay  v.   Wheeler,  69  5  Bery  v.  Hall,   L05  N.  C.    154,   10  S. 

Mich   254.  37N.  W.    Rep.  210;  Math  E.  Rep.  903  ;  Hank  v.  Gilmer,  llfiN. 

ews  v.  Reinhardt,    149   111.  635,  37  X.  C.  684,  22  S.  E.  Rep.  2.     bee  Davis  v. 

1;   Rep.  85.  Getchell,  32  Neb.  792,  49  X.  W.  Rep. 

Kenipner  v.  Churchill,  8  Wall.  369  776. 

3e    Rouett  v    Milner,  57  Mo.  App.  50.  »  Schatz   v.    Kirker,    4    East.    Rep. 

1  lark  \    Krause,  2  Mackey  - 1  >.  C.)  (Pa.)  Ill,  1  II. 

566.  In  Liming  v.  Kyle,  31  Neb.  649,  48  'See  She!  ton   v.  Church,  38  Conn. 

X.  W.   Rep.    170,  it    was  held   thai    a  420;  Bartles  v.  Gibson,  IT   Fed.    Rep. 

charge  to  the  effeel    thai    if  the  de-  297;.Brown  v.  Texas  Cactus  Hedge 

fendanl  Bold  g Is  to  paj  biB    lebts,  Co.,  64  Tex.  400  ;  Stern  Auction  &  C. 

the  transaction  should  be  upheld  irre-  Co.  v.  Mason,  16  Mo.   A.pp.    ITT:  Mer- 

tive   ol   the   adequacy  or    inade  tensv   Welsing,  8-1)  Iowa  508, 52 N.  W. 

t|uacy  of  the  consideration,  was  erro  Rep.  362  ;  Sommermeyer v.  Schwartz, 

•     nn.    Mm.    Lit.    In-   Cm.    v.  89  Wis.  66,  61  N.  W.  Rep.  311. 
Smith,  Hi  Mo,  261,  22  S   W.  Rep.  623 


§232 


[NADEQTJ  VCS     i  H    PURCHASE    PRK  I  . 


415 


of  $400,  this  was  considered  evidence  of  fraud  which  must 
be  submitted  to  a  jury.1  Again  it  is  more  strongly  stated 
in  Davidson  v.  Little,2  that  "  the  sale  of  lands  or  goods  by 
an  indebted  person  for  less  than  their  value  is  ipso  facto 
a  fraud  in  both  vendor  and  vendee."3  Where  the  value 
was  $7,700,  and  the  estimated  consideration  $1,537,  't 
was  held  to  be  conclusively  fraudulent.4  The  difference 
was  regarded  as  "so  great  as  to  shock  the  common  sense 
of  mankind,  and  furnish  in  itself  conclusive  evidence  of 
fraud."5  The  question,  however,  is  usually  submitted  to 
the  consideration  of  a  jury,6  to  determine  the  intent  of 
the  parties,7  and  is  almost  always  linked  with  other 
circumstances  or  indicia  of  fraud.8  Inadequacy  of  con- 
sideration is  a  fact  calling  for  explanation,  and  is  often 
treated  as  a  badge  of  fraud.9  Insufficiency  of  price  and 
insolvency  of  a  debtor,  say  the  Supreme  Court  of  Cali- 
fornia, may  be  circumstances  more  or  less  potential  in 
the  determination  of  fraud  as  a  question  of  fact,  but  fail- 
ure of  consideration  is  not  in  itself  sufficient  to  justify  a 
court  in  finding  fraud  as  matter  of  law.10 


1  Rhoads  v.  Blatt,  84  Pa.  St.  32,  1 
Am.  Insolv.  E.  45.  A  conveyance 
by  a  husband  to  his  wife  of  property 
worth  $5,000,  subject  to  a  mortgage 
of  $1,000,  and  for  a  consideration  of 
$1,000  additional,  was  set  aside.  Sand- 
man v.  Seaman,  84  Hun  (N.  Y.)  337, 
32  N.  Y.  Supp.  338. 

*  22  Pa.  St.  252. 

3  See  Doughten  v.  Gray,  10  N.  J. 
Eq.  330. 

4  Wilson  v.  Jordan,  3  Woods  642. 
See  Ratcliff  v.  Trimble,  12  B.  Mon. 
(Ky.)  32;  Borland  v  Mayo,  8  Ala. 
104 ;  Prosser  v.  Henderson,  11  Ala. 
484. 

5  Hoot  v.  Sorrell,  11  Ala   400. 
■Craver  v.  Miller,  (55  Pa.  St.  456. 
'Motley  v.  Sawyer,  38  Me.  OS. 
"Hudgins  v.  Kemp,  20  How.  50. 

9 See    Fisher    v.    Shelver,    53     Wis. 


498,  ION.  W.  Rep.  681;  Williamson 
v.  Goodwyn,  9  Gratt.  (Va.)  503; 
Laidlaw  v.  Gilmore,  47  How.  Pr. 
(N.  Y.)  08  ;  Hudgins  v.  Kemp,  2lJ 
How.  50;  Fuller  v.  Brewster,  53  Md. 
361;  Delaware  v.  Ensign,  21  Barb. 
(N.  Y.)  85;  Ames  v.  Gilmore,  59  Mo. 
537;  Scott  v.  Winship,  20  Ga.  429; 
Apperson  v.  Burgett,  33  Ark.  338; 
Boyd  v.  Ellis,  11  Iowa  97  ;  Barrow  v. 
Bailey,  5  Fla.  9  ;  Loring  v.  Dunning, 
16  Fla.  119;  Bickler  v.  Kendall,  66 
Iowa  703,  24  X.  W.  Rep.  518;  Dout- 
hitt  v.  Applegate,  33  Kan.  396,  6  Pac. 
Rep.  575;Easum  v.  Pirtle,  81  Ky. 
563  ;  Steere  v.  Hoagland,  39  III.  264  ; 
Stevens  v.  Dillman,  86  111.  233.  See 
Metropolitan  Bank  v.  Durant,  22  N. 
J.  Eq.  35. 

'o McFadden v.  Mitchell,  54<  !al  629  . 
Jamison   v.  King,  50  Cal.    133.     See 


4 '  6 


TRANSFER    PENDING   SU1  I. 


§  ?33 


£233.  Transfer  pending  suit. —  The  transfer  of  all,  or, 
according  to  some  authorities,  of  a  portion  of  a  man's 
goods  during  the  pendency  of  a  suit  against  him  is  a 
mark  of  fraud.1  One  of  the  circumstances  specified  in 
Twyne's  case'-'  was  that  the  "  transfer  was  made  pending 
the  writ."3  This  fact  usually  induces  the  suspicion  that 
the  conveyance  was  made  to  secure  the  property  from 
attachment  or  execution  in  the  pending  suit,  and  to  hin- 
der, delay,  or  defraud  creditors.1  This  inference  may, 
of  cotirse,  be  rebutted."'  In  Ray  v.  Roe  ex  don.  Rrown,6 
the  court  said  that  the  pendency  of  a  suit  was  "one  of 
the  many  badges  of  fraud"  which  would  induce  a  court 
of  equity  to  set  aside  a  conveyance,  or  a  jury  to  regard  it 
as  covinous.  In  Shean  v.  Shay7  it  is  characterized  as 
"  only  one  of  the  badges."  The  court  further  said  : 
"  The  deed  may  be  shown  to  be  fraudulent  and  void  as 
to  creditors  when  no  suit  was  pending  to  recover  the  debt 
or  damages  when  it  was  made." 


Motley  v.  Sawyer,  38  Me.  68.  In 
Day  v.  Cole,  11  [owa  152,  the  court 
-ay  that  where  tli'1  incumbrances 
upon  realty,  with  the  consideration 
paid  for  its  conveyance,  very  nearly 
equal  its  reasonable  value,  the  facl 
that  tin-  consideration  is  small  does 
nol  constitute  a  badge  of  fraud. 

'  Redfield  &  Rice  Mfg.  Co.  v. 
Dysart,  ''.'J  Pa.  St.  63 ;  Godfrey  v. 
Germain,  .' 1  Wis.  416;  Babb  v. 
Clemson,  10  S.  >v  I.'.  (Pa.  1  \SA  ; 
Thompson  v.  Robinson,  89  Me.  53; 
Ford  v  Johnston,  7  linn  (N.  Y.)  568; 
I  Ihited  stall-,  v.  Lotridge,  t  McLean 
246  :  Thomas  \  Pyne,  55  (owa  -Is 
7    N.    W.    !,'•  haferman    v. 

O'Brien,  23  Md,  565;  Crawford 
■.  Kni.-  \  50  U-i.  590  :  Hartshorn  v. 
E  hip  -  ::i  Me.  99  ;  Soden  \  Soden, 
::i  \  .1.  Eq  11:.  :  Bean  \  .  Smith,  2 
Ma  1 '. .Man    v.    Statham 

How.  1;;  Stoddard  \  Butler,  20 
Wend.  (N    Y.    501     Booher  v.    Wor- 


rill,  57  Ga.  2:5.-):  Stewart  v.  Wilson, 
12  Pa.  St.  450;  King  v.  Wilcox,  11 
Paige  iX.  Y.)  589;  Cole  v.  Millerton 
Inn,  Co.,  133  N.  Y.  Mil.  30  N.  E.  Rep. 
847  ;  (Sri-gory  v.  Cray,  ^*  (ia.  172,  14 
s.  E.  Rep.  187;  Dent  v.  Ferguson, 
132  I'.  s.  50,  10  S.  C.  Rep.  13;  Low 
v.  Wort  man,  44  X.  J.  Eq.  200,  7  At  I. 
Rep.  654,  14  Id.  586;  Christie  v. 
Bridgman,  51  X.  J.  Eq  334,  25  At  I. 
Rep.  939,  30  Id.  420:   Morris  Canal   & 

Banking  Co.  v.  Stearns,  23  X.  J.  Eq. 
110. 

3  Rep.  80  :    1  Smith's  Lea..  Cas.  33. 
See  ;  22 

'  See  Merrill  v.  Locke,  41  X.  II.  490; 
Dorr  v.  Beck,  76  Hun  (N.  Y.)  540,  28 
V  Y    Shim,.  200. 

8  Sipe  v.  Earman,  26  Gratt.  (Va.) 
563.  See  Skipwith  v.  Cunningham, 
8  Leigh  1  Va.)271. 

»2  Blackf.  1  In. 1. 1  258. 

1  12  I  ml.  377. 


§234  EVIDENCE   OF    SECRECY.  41  7 

The  pendency  of  a  suit  is  a  warning  to  a  dishonest 
debtor  to  make  haste  to  alienate  and  cover  up  his  assets. 
While  the  service  of  process  in  a  suit  does  not  usually 
create  a  lien  upon  the  defendant's  property,  and  the  doc- 
trine of  lis  pendens  is  limited  in  its  application,  yet  trans- 
fers pending  a  suit  are  justly  scanned  with  very  greal 
suspicion  ;  and  where  it  is  certain  that  judgment  would 
be  rendered  against  the  vendor,  and  evidence  of  inade- 
quacy of  consideration  is  adduced,  the  courts  will  conclude 
that  the  conveyance  is  colorable,  and  made  with  a  view  to 
hinder,  delay,  and  defraud  creditors.1  Mr.  May~  states 
the  rule  to  be  that  where  the  conveyance  is  made  pendente 
lite,  it  is,  "when  coupled  with  other  circumstance,  sugges- 
tive of  fraud,  but  where  the  consideration  is  adequate, 
not  a  strong  mark  of  a  fraudulent  intention."  This,  how- 
ever, can  scarcely  be  regarded,  under  the  American 
authorities,  as  giving  this  important  element  of  proof  its 
proper  weight. 

§  234.  Evidence  of  secrecy.— An  unusual  degree  of  secrecy 
observed  between  the  parties  in  the  making  of  the  sale  is 
a  badge  of  fraud  ;3  and  the  secret  removal  of  the  property 
immediately  after  the  sale  indicates  a  dishonest  purpose.4 
Circumstances  indicative  of  concealment,  or  of  a  design 
to  give  a  man  the  appearance  of  possessing  property 
which   he  does   not  own,  are  evidences  of  fraud,  and  are 


1  Jaffers  v.  Aneals,  91  111.  487,493.  ance   were    it    shown   to    have  been 

2  May's  Fraudulent  Conveyances,  done  directly  or  indirectly  for  the 
p.  83.  benefit  of  Schwartz;    bul  the  goods 

3  Fishel  v.  Ireland,  52  Ga.  632  ;  seem  to  have  been  taken  away  in  a 
Stewart  v.  Mills  Co.  Nat.  Bk.,  76  Iowa  sleigh  by  some  of  the  clerks,  who 
571.  41  N.  W.  Rep.  318.  See  Callan  took  this  method  of  paying  them- 
v.  Statham,  23  How.  480;  Corlett  v.  selves  for  the  amounts  due  them  for 
Radcliffe,  14  Moo.  P.  C.  140.  In  Davis  wages.  *  *  *'  There  is  no  evidence 
v.  Schwartz,  155  U.  S.  642,  15  S.  C.  to  connect  either  Schwartz  or  the 
Rep.  237,  the  court  says  :    "The  fact  mortgagees  with  it." 

that  goods  were  spirited  away  front  4  Delaware   v.  Ensign,  21    Barb.  (N. 

the  store  on  Sunday  night  would  tin-  Y.)  88. 
doubtedly  assume  a  serious  import- 
27 


4i8 


I  VIDENCE    I  »1     SECRECY 


§  234 


proper  for  a  jury  to  weigh.1  Secrecy  "is  a  circumstance 
connected  with  other  facts  from  which  fraud  may  be 
inferred. " a  An  agreement,  however,  to  conceal  the  fact 
of  a  purchase  is  not  perse  fraudulent,  but  is  merely  matter 
of  evidence  in  favor  of  avoiding-  the  sale,  which,  although 
perhaps  very  strong,  is  still  capable  of  explanation3  In 
Haven  v.  Richardson,'  the  court  said:  "  Secrecy  is  not 
of  itself  evidence  of  fraud.  It  is  likely  to  accompany 
fraud,  and  may  give  force  to  other  evidence,  under  par- 
ticular circumstances."  Thus  it  is  held  in  Massachusetts 
that  an  arrangement  or  understanding  in  regard  to  with- 
holding mortgages  from  record  until  the  mortgagors 
should  have  trouble,  did  not  render  the  mortgages  void, 
but  was  a  matter  entitled  to  consideration  by  the  jury  in 
passing  upon  the  question  of  fraud  at  common  law.5  On 
the  other  hand,  an  agreement  that  the  transaction  is  to  be 
kept  secret  until  the  debtor  has  an  opportunity  of  escap- 
ing beyond  the  reach  of  process  issued  by  his  other  cred- 
itors, or  by  which  the  deed  is  not  to  be  offered  for  record 
until  the  other  creditors  threaten  suit,  will  render  it  fraud- 
ulent'1    Secrecy  in  such  cases  is  a  part  of  the   considera- 


l;  »ss    \.   ( Irutsinger,    ?    Mo.    249  ; 
I  >obson  v.  Snider,  70  F<  d.  Rep.  10. 

Warner  \  Norton,  30  Bow.  460. 
In  Small  \.  Small,  56  Kan.  8,  '.),  42 
Pac.  Rep.  323,  thi  court  says:  "Secrecy 
is  often  « - ;  *  1 1  •  -<  1  a  badge  of  fraud,  bul  it 
i-  not  fraud  itself.  I f  a  man's  dispo- 
sit  ion  of  his  property  is  fair  and  law- 
ful, the  concealment  of  the  trans- 
action cannot  render  it  fraudulent." 

Gould    v.    Ward,     I    Pick.  (Mass.) 

104     Da)  v.  Q Ibar,  69  .Miss.  687    \-: 

So.  Rep.  80. 

'  5  X.   II.  127.     See  Blennerhassetl 
v.  Sherman,  105  is.  117. 

Folsom    \     Clemence,    ill    Mass. 

1  houron  \     Pearson,  29  V 

.1     Eq  eei  v.   <  >'Brien,  30  W. 

i      Rep,   14  .   Reynolds 


v.  Gawthrop.  :57  W.  Va.  3,  10  S.  E. 
Rep.  364  :  White  v.  Benjamin,  '■*>  Misc. 
(N.  Y. )!!»(),  23  N.  V.  Supp.  981.  Bui 
where  there  is  no  evidence  that  any 
one  was  induced  to  give  credit  to  the 
grantor  on  the  faith  of  his  apparent 
ownership,  the   failure  to   promptly 

register  the  deed  was  held  to  I E  no 

importance.  Nadal  v.  Britton,  112  N. 
C.  180,  16  s.  E.  Rep.  914.  See  Insur- 
ance  •  '<».    v.  Shoemaker.  95  Tenn.  72, 

::i  s.  W.  Rep.  270.  The  presumption 
of  fraud  arising  from  failure  to  record 
is  overcome  by  proof  t  hat  the  grantee 
was  an  alien,  ignoranl  of  the  fact  thai 
registration  was  required.  Tryon  v. 
Flournoy,  so  Ala.  321. 

'See  Hutchinson  v.  First  Nat.  Bk., 
I:;:;  I ii< I   284,  30  N.  E.  Rep.  952;  Blen- 


§§  234a,  23s 


SECRET   TRUST 


419 


tion  ;    the  transaction   is  contaminated   by   it,   and   ought 
not  to  be  regarded  as  bona  fide} 

§  234a.  Secret  trust.— Of  course,  any  form  of  a  secret 
trust  originating  from  the  property  of  and  created  or 
reserved  for  the  benefit  of  the  debtor,  vitiates  the  transfer 
as   to  creditors"  entitled  to  attack  it.3 

§  235.  Suppression  or  concealment— Not  recording — Subse- 
quent fraud. — As  long  ago  as  the  case  of  Hungerford  v. 
Earle,4  it  was  held  that,  "  a  deed  not  at  first  fraudulent 
may  afterwards  become  so  by  being  concealed,  or  not 
pursued,  by  which  means  creditors  are  drawn  in  to  lend 
their  money."  This  doctrine  has  been  repeatedly  recog- 
nized and  reaffirmed  indifferent  forms  in  State  and  Fede- 
ral tribunals.5  In  Coates  v.  Gerlach0  it  appeared  that  a 
deed  of  land  had  been  made  by  a  husband  directly  to  his 
wife.  The  deed  was  dated  March  23,  1857,  but  was  not 
filed  for  record  until  December  2,  1857,  over  eight  months 


nerhasset  v.  Sherman,  105  U.  S.  100  ; 
Hilliard  v.  Cagle,  46  Miss.  309  ;  Stock 
Growers'  Bk.  v.  Newton,  13  Col.  245, 
22   Pac.    Rep.  444 ;    Putnam   v.   Rey- 
nolds, 44  Mich  113,  6  N.  W.  Rep.  198 
Folsom  v.  Clemence,    111  Mass.   273 
Stewart  v.  Hopkins,  30  Ohio  St.  502 
Dickson  v.  McLarney,  97  Ala.  383,  12 
So.  Rep.  398. 

1  Hafner  v.    Irwin,   1  Irerl.  (N.  C.) 
Law,  499.     Mr.  May  regards  secrecy 
as  always  evidence,  but  not  of  itself 
conclusive  evidence  of  fraud.     May's 
Fraudulent  Conveyances,  p.  83.     See 
Griffin    v.    Stanhope,  Cro.   Jac.  454 
Worseley  v.  Demattos,  1  Burr.  467 
Leonard   v.  Baker,   1    M.   &  S.   251 
Corlett  v.  Radcliffe,  14  Moo.  P.  C.  139. 

9  Bostwick  v.  Blake,  145  111.  85.  34 
N.  E.  Rep.  38  ;  Plimpton  v.  Goodell, 
143  Mass.  367,  9  N.  E.  Rep.  791  :  Plun- 
kett  v.  Plunkett,  114  Ind.  484.  16  N. 
E.  Rep.  612,  17  Id.  562;  Pattison  v. 
Letton,   56  Mo.  App.    331  ;  Vietor  v. 


Levy,  72  Hun  (N.    Y.)  263,  25   X.    Y. 
Supp.  644. 

3  It  was  not  regarded  as  a  secret 
trust  as  to  subsequent  creditors  for  a 
debtor  to  provide  a  home  for  his  fam 
ily  by  a  conveyance,  through  a  third 
person,  to  his  wife,  but  this  case  is 
certainly  on  the  border  line.  Edgerly 
v.  First  Nat.  Bk.,  30  111.  App.  425. 

4  2  Vera.  261. 

5  Hildreth  v.  Sands,  2  Johns.  Ch. 
(N.  Y.)  35 ;  Scrivenor  v.  Scrivenor,  7 
B.  Mon.  (Ky  )  374  ;  Bank  of  the  U.S. 
v.  Housman,  6  Paige  (N.  YT.  t  526; 
Beecher  v.  Clark,  12  Blatchi 
Blennerhassett  v.  Sherman,  105  U.  S. 
100;  Coates  v.  Gerlach,  4  1  Pa.  St.  48  , 
Hafner  v.  Irwin,  1  Ired.  (N.  C.)  Law 
490  ;  Blackman  v.  Preston,  24  III.  App. 
240.  See  Hildeburn  v.  Brown,  17  B. 
Mon.  (Ky.)  77!);  Thouron  v.  Pearson, 

29  N.  .1.  Eq.487  ;  Stewart  v.  Bopkins, 

30  Ohio  St.  502. 

6  44  Pa.  St.  43,  46. 


420  SUPPRESSION  OR  CONCEALMENT.  §235 

thereafter.  On  January  21,  1858,  the  husband,  professing 
to  act  as  the  agent  of  the  wife,  effected  a  sale  of  the  lands 
to  a  third  part)-.  The  creditors  of  the  husband  attached 
the  moneys  in  the  hands  of  the  vendees,  and  a  contest 
arose  as  to  which  had  the  better  right  to  the  proceeds  of  the 
sale.  Touching  this  controversy,  Strong,  J.,  said  :  "There 
is  .mother  aspect  of  this  case,  not  at  all  favorable  to  the 
claim  of  the  wife.  It  is  that  she  withheld  the  deed  of 
her  husband  from  record  until  December  2,  1857.  In 
asking  that  a  deed  void  at  law  should  be  sustained  in 
equity,  she  is  met  with  the  fact  that  she  asserted  no  right 
under  it  ;  in  fact,  concealed  its  existence  until  after  her 
husband  had  contracted  the  debts  against  which  she  now 
seeks  to  set  it  up.  There  appears  to  have  been  no  aban- 
donment of  possession    by  the   husband Even   if 

the  deed  was  delivered  on  the  day  of  its  date,  the  supine- 
ness  of  the  wife  gave  to  the  husband  a  false  credit,  and 
equity  will  not  aid  her  at  the  expense  of  those  who  have 
been  misled  by  her  laches."  i  In  Blennerhassett  v.  Sher- 
man," Woods,  J.,  in  delivering  the  unanimous  opinion  of 
the  United  States  Supreme  Court,  observed  :  "  Hut  where 
a  mortgagee,  knowing  that  his  mortgagor  is  insolvent, 
for  the  purpose  of  giving  him  a  fictitious  credit,  actively 
conceals  the  morteaee  which  covers  his  entire  estate  and 
withholds  it  from  the  record,  and  while  so  concealing  it 
represents  the  mortgagor  as  having  a  large  estate  and 
unlimited  credit,  and  by  these  means  others  are  induced  to 


DfcWilliams    v.     Rodders.     .Vi  rord.      In   Jeffrey  v.    Brown,   2\)    IV<I. 

Ala,  ST.  Rep.  481,  thecourl  said  :  "  The  niort- 

•  105  r.  S.    11T;   Saner  v.    Behr,  49  gages  to  all  the  relatives  of  the  de- 

M"    X 1  - 1  • .  s»'> ;  Wafer  v.   Harvey  Co.  faulting  linn  ....  were  recorded 

Bk.,  Mi  Kan.  598,  '.'<;   Pac    Rep    1032.  October  lltli.  three  days  before  the 

Sternbach  v.  Leopold,  50  111  A.pp.  assignment.   The  suppression  of  these 

176;  Baker  v.    Pottle,    is    Minn.  479,  mortgages  until  this  critical  moment 

51  N   W.  Rep.  388 ;  Dobsoa  \    Snider,  is  a   badge  of  fraud   as  to  creditors, 

'■"  1  •  1  R<  p.  11      In  iIm-  latter  case  it  and  they  will   be  denied  validity  and 

id  that   forgetfulness  maj  be  ac-  effectiveness  as  linns  upon  the  prop- 

cepted  1-  an  excuse  for  failure  t<>  re-  erty  of  debtors." 


§  236  I'A  1 1  il  M  1      \IH   NDE.  42  I 

give  him  credit,  and  lie  fails  and  is  unable  to  pay  the 
debts  thus  contracted,  the  mortgage  will  be  declared 
fraudulent  and  void  at  common  law,  whether  the  motive 
of  the  mortgagee  be  gain  to  himself  or  advantage  to  his 
mortgagor." ]  But  there  must  be  some  evidence  of  a 
preconcerted  and  contrived  purpose  to  deceive  and 
defraud  the  other  creditors  8  of  the  mortgagor,  of  which 
scheme  the  withholding  of  the  instrument  from  the  record 
constitutes  a  part.  The  non-filing  of  the  deed  is  a  cir- 
cumstance to  be  considered  on  the  question  of  fraud.11 
It  is  said  in  Curry  v.  McCauley  :  l  "When  the  mortgage 
was  executed  and  delivered  nothing  further  was  necessary 
to  its  validity  as  a  complete  transaction.  It  has,  there- 
fore, been  held  in  Pennsylvania,  by  a  long  series  of  deci- 
sions, that,  as  between  the  parties,  a  mortgage  takes  effect 
upon  delivery,  and  that  an  unrecorded  mortgage  is  good 
against  an  assignee  for  the  benefit  of  creditors."  So  it  is 
decided  that  new  creditors  cannot  follow  the  proceeds  of 
a  sale  of  property  made  under  the   undisclosed  security.6 

§  236.  Evidence  aliunde.— In  a  controversy  which  arose  in 
Mississippi6  it   was  decided  that  a  deed  of  trust   in   the 

1  In  cases  where  the  statute  re-  Sav.  Bank  v.  Buck,  123  Mo.  153,  2?  S. 
quires  that  a  deed  should  be  recorded  W.  Rep.  341;  Second  Nat.  Bk.  v. 
within  a  certain  period,  and  the  gran-  Merrill,  81  Wis.  142,  50  N.  W.  Rep 
tee  neglects  so  to  record  it,  a  cred-  503;  Tryon  v.  Flouruoy.  80  Ala.  321. 
Ltor  of  the  grantor  may  pursue  the  3  Day  v.  Goodbar,  69  Miss.  690,  12 
ostensible  title  of  the  grantor,  even  So.  Rep.  30  ;  Klein  v.  Richardson,  04 
though  it  may  not  be  the  real  title  of  Miss.  41,  8  So.  Rep.  204  ;  Dobsou  v. 
the  debtor.  Nelson  v.  Henry,  2  Snider,  70  Fed.  Rep.  11  ;  Stock  Grow- 
Mackey  (D.  C.)  259.  The  creditor  ers'  Bank  v.  Newton,  13  Col.  256 ;  Haas 
must  not,  however,  lose  sight  of  the  v.  Sternbach,  150  111.  14.  41  N.  E. 
general  rule  that  a  judgment  is  not  Rep.  51  ;  Mull  v.  Dooley,  89  Iowa  312, 
usually  good  against  an  unrecorded  56  N.  W.  Rep.  513. 

conveyance.      If    the  conveyance    is  4  20  Fed.  Hep.  584. 

made  with   a  fraudulent  design  the  '  W.  O.  Tyler  Paper   Co.  v.  Orcutt- 

mere  recording  of  it  will  not  make  it  Killick   Lith.  Co.,    35  111.   App.  502  ; 

valid.     Carver  v.  Barker,  73  Hun  (N.  Field  v.   Ridgelj  ,   116  111.  424,  G  N.  E. 

Y.),  418,  26  N.  Y.  Supp.  919.  Rep.  156. 

2  See  Hegeler  v.  FirstNat.  Bk.,  129  8  Hilliard  v.  I  lagle,  46  Miss.  B09. 
111.    157,   21    N.    E.  Rep.    812  ;    State 


422  CONCI  \l  MENT.  §  237 

nature  of  a  mortgage,  valid  on  its  face,  and  not  made  or 
received  with  any  intent  to  defeat  existing  or  future  cred- 
itors, may  nevertheless  be  held  to  be  fraudulent  and  void 
as  to  all  creditors,  existing  and  future,  by  evidence  aliunde 
showing  the  conduct  of  the  parties  in  their  dealings  in 
reference  to  the  deed.  The  principal  circumstances  relied 
on  in  this  case  to  avoid  the  deed  were  the  facts  that  the 
grantor  retained  possession  of  the  property,  and  that  the 
deed  was  withheld  from  record.  This  enabled  the  mort- 
gagor to  contract  debts  upon  the  presumption  that  the 
property  was  unincumbered.  The  court  said  :  "  The 
natural  and  logical  effect  of  the  agreement  and  assign- 
ment, and  the  conduct  of  the  parties  thereto,  was  to  mis- 
lead and  deceive  the  public,  and  induce  credit  to  be  given 
to  Baggett  [the  mortgagor],  which  he  could  not  have 
obtained  if  the  truth  had  been  known,  and  therefore  the 
whole  scheme  was  fraudulent  as  to  subsequent  creditors, 
as  much  so  as  if  it  had  been  contrived  with  that  motive 
and  for  that  object."  ' 

i  237.  Concealment  in  fraud  of  bankrupt  act.— In  Blenner- 
hassett  v.  Sherman,'  a  very  important  case,  reviewing  the 
authorities  concerning  suppression  and  concealment  of 
transfers,  the  court  held  that  a  mortgage  executed  by  an 
insolvent  debtor  with  intent  to  give  a  preference  to  his 
creditors,  was  void  under  the  bankrupt  act.      It  appeared 


'.ill  v.  Griffith,  2  Mil.  Ch.  the  last  renewal  upon  record,  to  the 
Dec  -J7<).  In  this  rase  fche  court  de-  prejudice  of  the  other  creditors  who 
d  thai  a  part]  could  not  be  per-  had  trusted  the  debtor  on  the  strength 
mitted  to  take  for  bis  own  securitya  of  the  possession  and  ostensible  owner- 
hill  of  sale  or  mortgage  of  chattels  si  up  of  the  mortgaged  property.  The 
from  another,  leaving  the  mortgagor  mortgage  which  was  in  controversy 
at  his  request  in  possession  and  osten-  was  declared  void,  and  the  decree 
Biblj  the  owner,  and  keep  the  public  was  affirmed  on  appeal.  See,  further, 
from  a  knowledge  of  the  existence  of  Bafner  v.  Irwin,  1  Ired.  (N.  C.)  Law 
the  mortgage  bj  withholding  it  from  490;  Worseley  v.  Demattos,  1  Burr. 
record  for  an  indefinite  period,  renew-  107;  Tarback  v.  Marbury,  2  Vern. 
ing  1!  periodically,  and  then  receiving  •">  1 0  ;  Neslin  v.  Wells,  104  U.  8.  428. 
the  benefit  of  the  security  by  placing        •  105  U.  S.  100-121. 


§  238  ABSOLUTE   t'o\\  EYANCS.  [2  j 

that  the  creditor  had  reasonable  grounds  to  believe  the 
mortgagor  insolvent,  and  knew  that  the  instrument  whs 
made  in  fraud  of  the  provisions  of  the  bankrupt  act;  and 
that  the  mortgagee  had,  for  the  purpose  of  evading  the 
bankrupt  law,  actively  concealed  the  existence  of  the 
instrument,  and  withheld  it  from  record  for  a  period  of 
more  than  two  months.  The  security  was  avoided,  not- 
withstanding it  was  executed  over  two  months  before  the 
filing  of  the  petition  in  bankruptcy.1 

£  238.  Absolute  conveyance  by  way  of  security. —  It  is 
familiar  learning  that  a  deed  absolute  on  its  face  may, 
despite  the  statute  of  frauds,  be  shown  by  extrinsic  evi- 
dence to  be  a  mortgage,2  and  that  the  relationship  of 
mortgagee  and  mortgagor  with  all  the  usual  incidents  may 
thus  be  established.  If,  however,  the  transfer  was  not 
devised  by  the  debtor  to  defraud  or  delay  his  creditors, 
or  if  it  was  so  designed,  and  the  trustee  or  mortgagee 
afforded  no  aid  in  carrying  out  the  intention  of  the  prin- 
cipal, the  transaction  is  valid,3  though  perhaps  open  to 
suspicion.4  A  conveyance  by  way  of  security  must  be  in 
all  respects  as  clean  and  clear  as  a  conveyance  for  perma- 


1  The  repeal  of  the  Federal  Bank-  Stultz,  60  Ind.  170:  MeCarron  v.  Cas 
rupt  Act  renders  unimportant  the  con-  sidy,  18  Ark.  34  ;  Kitts  v.  Wilson.  ISO 
sideration  of  cases  arising  exclusively  Ind.  492,  29  N.  E.  Rep.  401  :  Wrighl  \ . 
under  its  provisions.  Mahaffey,    76  Iowa  96,  40  N.  W.  Rep. 

2  Horn  v.  Keteltas,  46  N.  Y.  605  ;  112  ;  Kemp  v.  Small,  32  Neb.  318,49 
Carr  v.  Carr,  52  N.  Y.  251  ;  Murray  v.  N.  W.  Rep.  169. 

Walker,    31  N.    Y.  399  ;  McBurney  v.  3 Stevens  v.    Hinckley,   43  Me.  411  ; 

Wellman,    42    Barb.     (N.      Y.)     390;  Reed   v.    Woodman,    4  Me.  400;  Firs! 

sub   nomine   Dodge    v.    Wellman,    43  Nat.    Bank   v.   Jaffray,    41    Kan.    694, 

How.  Pr.  (N.  Y.)  427  ;  Odell  v.  Mont-  21    Par.     Rep.      242;    Carey-Hallidaj 

ross,    68  N.  Y.   499;  Hassam  v.  Bar-  Lumber   Co.    v,   Cain,    70    .Miss    628 

rett,      115     Mass.      256;    Henley    v.  L3  So.  Rep.  239  ;  Beidler  v.  Crane,  135 

Hotaling,  41  Cal.  22 ;  Sedg.  and   Wait  111.  92,  25  N.    E.  Rep.     655  :   Ruse   v. 

on    Trial    of    Title   to    Land,  2d  ed.,  Bromberg,  88    Ala.    620,    7   So.    Rep. 

§337;  Gayv.  Hamilton,  33  Cal.  686;  384.     Sec    Pattisoti  v.    Letton,  56  Mo. 

French  v.  Burns,  35  Conn.  359  ;  Clark  App.  325. 

v.    Finlon,    90    111.    245;    Butcher   v.  *  Smith  v.  Onion,  19  Vt.  129. 


4-4 


Al;Si  (LUTE   CONVEYAN<  I  . 


§238 


nent  ownership.1  If  no  fraud  was  in  fact  intended,  the 
security  may  be  enforced  ;  *  but  if  the  debtor  made  a 
secret  reservation,3  or  the  creditor  comes  into  court  with 
a  fraudulent  claim  of  an  absolute  title,"4  other  creditors 
may  avoid  the  transaction.5  Williams,  Ch.  J.,  said  in 
Barker  v.  French  : 6  "  Although  it  is  true  that  a  person 
may  take  security  for  a  debt  by  a  deed  absolute,  or  by  a 
bill  of  sale,  when  it  was  intended  for  security,  yet  there 
should  be  no  disguise,  nor  dissembling,  nor  falsehood; 
and  if  the  party  claims  an  absolute  purchase  when  the 
sale  was  only  intended  for  security,  and  thereby  seeks  to 
protect  from  the  creditors  the  property  of  the  vendor,  and 
endeavors  to  conceal  the  true  nature  of  the  transaction,  it 
is  evidence  of  fraud."  Probably  the  weight  of  the  better 
authority  and  the  sounder  reasoning  is  to  the  effect  that 
an  absolute  conveyance  by  way  of  security  is  a  badge  of 
fraud  as  regards  creditors  which  may  be  removed  by  evi- 
dence  of  an  honest  intent.7     It  may  be  noted  with  refer- 


1  Phinizy  v.  (Mark,  62  Ga.  623-627  : 
Palmour  v.  Johnson,  84  Ga.  100,  10  S. 
E.  Rep.  500. 

Gaffney's  Assignee  v.  Signaigo,  1 
Hill.  158  :  Chickering  v.  Batch,  3  Sum- 
ner 174;  Smith  v.  Onion,  19  Vt.  427. 
Lukins  v.  Ainl.  •;  Wall.  78.  See 
Oriental  Bank  v.  Haskins,  3  Mete. 
(Mass, 

*  Thompson  v.  Pennell,  07  Me.  162. 
The  law  is  settled  in  Alabama  1  hal 
an  absolute  conveyance  of  lands 
intended  as  3ecurity  for  a  debt,  or,  in 
other  words,  designed  to  operate  as  a 
mortgage,  is  fraudulent  and  void  as 
to  existing  creditors.  The  court  say 
that  the  parties  may  uol  intend  fraud, 
there  may  be  no  actual  intent  to 
hinder,  delay,  <»r  defraud  creditors, 
because  BUch  is  it-  im-\  [table  con- 
sequence, the  law  condemns  it.  Sims 
\ .  <  l-aines,  <it  Ala.  396.  See  Bryant  v. 
Young,  21  Ala.  264  ;  Eartshorn  v. 
William^.   :;i    Ala.   1 19.    To  the  Bame 


general  effect,  see  Ladd  v.  Wiggin,  35 
X.  EL  426,  and  cases  cited.  Compare 
Prescott  v.  Hayes,  43  N.  H.  593  ;  Chen- 
ery  v.  Palmer,  6  Cal.  122. 

8  18  Vt.  460  ;  Spence  v.  Smith,  34 
W.  Va.  697,  12  S.  E.  Rep.  828. 

1  Ross  v.  Duggan,  5  Col.  85,  100  ; 
Stevens  v.  Hinckley,  43  Me.  440; 
Emmons  v.  Bradley,  56  Me.  333  ; 
Moore  v.  Roe,  35  N.  J.  Eq.  90.  See 
Gibson  v.  Seymour,  4  Vt.  522  ;  Co- 
lumbia Bank  v.  Jacobs,  10  Mich.  349  ; 
Harrison  v.  Trustees  of  Phillips  Aca- 
demy, 12  .Mass.  156 ;  McClure  v.  Smith, 
14  Col.  299,  23  Pac.  Rep.  786;  Puller 
v.  Griffith,  91  Iowa  632,  60  N.  W.  Rep. 
247,  citing  the  text  ;  Stralton  v.  Put- 
ney, 63  N.  H.  577.4  Atl.  Rep.  876  ; 
Watkins  V.  Arms.  04  N.  H.  99,  6  Atl. 
Rep.  92.  In  Connecticut  a  deed 
intended  as  a  mortgage  is  not  valid 
against  attaching  creditors,  the  de- 
feasance not  being  recorded.  Ives 
v.  Stone,  51  Conn.  446. 


§  238a  EXCESS    OF    PROPERTY     MORTGAGED. 

ence  to  the  law  upon  this  subject,  that  an  absolute 
conveyance  by  way  of  security  affords  a  convenient  and 
tempting  cover  for  fraud  upon  creditors,  and  the  tendency 
to  regard  transactions  of  this  kind  with  suspicion  should 
be  encouraged.  Where  the  security  is  corrupted  with 
fraud,  not  only  can  creditors  secure  it  to  be  avoided,1  but, 
as  is  elsewhere  shown,  the  parties  themselves  can  get  no 
relief,2  and  in  some  courts  a  disposition  is  manifested  to 
declare  void  as  to  creditors  absolute  conveyances  taken  as 
security.3  Certainly  such  conveyances  are  calculated  to 
mislead  creditors. 

§  238a.  Excess  of  property  mortgaged. —  The  United 
States  Supreme  Court  recently  declared  that  it  was  not 
even  a  badge  of  fraud  that  a  mortgage  was  made  to  cover 
more  property  than  would  secure  the  debt  due.4  In 
Downs  v.  Kissam,5  Mr.  Justice  McLean  said  :  "  It  is 
no  badge  of  fraud  for  a  mortgage,  which  is  a  mere  secu- 
rity, to  cover  more  property  than  will  secure  the  debt 
due.  Any  creditor  may  pay  the  mortgage  debt,  and  pro- 
ceed against  the  property."  But  the  cases  upon  this 
feature  of  the  law  are  not  entirely  in  harmony,  and  the 
taking  of  greater  security  than  is  needed  is  a  circum- 
stance that  is  often  considered,0  in  connection  with  other 
facts  as  bearing  upon  the  intent  and  good  faith  of  the 
parties. 

'Jones  v.  Light,  86  Me.  437,  30  Atl.  King,   90  Iowa   345,    57    X.   W.    Rep. 

Rep.  71.  8G4;  Smith  v.  New  York  Life  \n>.  Co. 

-  Hassam  v.  Barrett,  115  Mass.  258.  57  Fed.  Rep.  133  ;  Smith    v.    Boyer,  29 

3  Beidler  v.  Crane,  135  111.  98,  25  N.  Neb.  76,  45  X.  W .  Rep.  265  :  Thomp- 
E.  Rep.  655.  son  v.    Richardson  Drug  Co.,  '■)'■'>  Neb. 

4  Davis  v.Schwartz,  155  U.  S.  641,  714.  50  X.  W.  Rep.  948;  Showman  v. 
15  S.  C.  Rep.  2;;:.  SeeMcKinney  v.  Lee,  86  Midi.  556.  I!)  N.  \Y  Rep.  578 
Wade,  43  Mo.  App.  152;  Colbern  v.  Hardt  v.  Heidweyer,  152  U.  S.  547,  14 
Robertson,  80  Mo.  541  ;  Grand  Island  S.  C.  Rep.  671  ;  Kilpatrick-Koch  D.  G. 
Banking  Co.  v.  Costello,  45  Xeb.  139,  Co.  v.  Strauss.  45  Neb.  793,  64  X.  W. 
63  N.  W.  Rep.  376.  Rep.  223;  Clinton  Hill  Lumber  &  Mfg. 

5  10  How.  108.  Co.   v.    Strieby,   52    N.   .1.    Eq.  571 

6  See  McKinney   v.  Wade,    43  Mo.  Atl.  Rep.  589. 
App.   152;  Lycoming    Rubber   Co.  v. 


tjn  INSOLVENCY  .  §  239 

§  239.  Insolvency.  —  Insolvency,  as  we  have  seen,  does 
not  deprive  the  owner  of  the  power  to  sell  or  mortgage 
his  property  1  to  pay  or  secure  his  debts,  whether  to  one 
or  more  of  his  creditors.'  Indebtedness  or  hopeless 
insolvency  is,  however,  an  important  element  of  proof  in 
marshalling  badges  of  fraud  to  overturn  a  covinous  trans- 
action.3 The  distinction  between  the  right  of  existing 
and  subsequent  creditors  which,  of  course,  has  an  import- 
ant bearing  upon  this  subject,1  is  elsewhere  considered. 
The  conveyance,  to  be  fraudulent,  should  bear  such  a 
ratio  to  the  indebtedness  as  to  tend  directly  to  defeat  the 
claims  of  creditors.5  It  is  not  necessary  that  the  con- 
veyance should  leave  the  grantor  entirely  without  prop- 
erty, but  the  amount  transferred  and  the  part  retained 
are  all  circumstances  to  be  weighed.0  A  heavy  indebt- 
edness of  the  grantor,  together  with  a  sale  to  a  relative, 
of  necessity  form  strong  badges  or  indications  of  collusion 
and  fraud,7  but  are  not  in  themselves,  unsupported  by 
other  material  facts,  deemed  conclusive  proofs  of  fraud.8 
Again,  it  is  said  that  insolvency  of  the  grantor,  although 
a  circumstance  which  may  be  taken,  together  with  other 


•Singer     v.     Goldenburg,    17    Mo.  69  ;  Blodgett  v.  Chaplin,  48  Me.  322  ; 

A  pp.  549  ;  Sanger  v.  Colbert,  84  Tex.  Clark  v.  Depew,  25  Pa.  St.  509  ;  Bar- 

(568,  19  S.  W.  Rep.  863.  row   v.    Bailey,    5   Fla.    9.     Compare 

•-'  Crawford  v.  Kirksey,  50  Ala.  591;  Cox  v.   Fraley,  26  Ark.  20;  State  ex 

Stover    v.    Herrington,    7    Ala.    142;  rel.    Peirce   v.    Merritt,    70   Mo.   277; 

Samuel  v.   Kittenger,    6   Wash.    261,  Fuller  v.  Brewster,  53  Mil.  358  ;  Earn- 

38  Pac.  Rep.  509.     See  §§  52,  95.     In-  shaw  v.  Stewart,  64  Mil.  513,  2  Atl. 

solvency  of  a  corporation   does  not  Rep.  734. 

necessarily    entitle    stockholders     to  4  See  Chaps.  V,  VI. 

secure  ;i  receiver.     Denike  v.  N.  Y.  &  5  Clai'k  v   Depew,  25  Pa.  St.  509. 

Rosendale  I-  A:.  C  <'<>.,  so  N.   Y.  599.  6  Citizens'  ^at.  Bank  v.  Hodges,  so 

Wail  on  Insolv.  Corps.  §  178.  Hun  (N.  Y.)  471,  30  N.  Y.  Supp.  445  ; 

Hudgins  v.    Kemp,   20  How.  45;  Kain  v.  Larkin,   141  N.  Y.  144,  36  N. 

McRea  v.  Branch  Bank  of  Alabama,  E.  Rep.  9;  cf.,  Phillips  v.  Eesterson, 

19  How.   377;  Bibb   v.    Baker,   17  B.  154  111.  572,  39  N.  E.  Rep.  599. 

Mon  1  K  v.)  292  ;  Bulkley  v.  Burlington,  '  Mertens  v.  Welsing,  85  Iowa  508, 

5  McLean   451     Purkitt  v.  Polack,  17  52  N.  W.  Rep.  362. 

I  al.  827  ;   Eartshorn  v.  Eames,  31  Me.  »  Merrill  v.  Locke,  41  N.  H.  490. 
9:5  ;    Ringgold  v,  Waggoner,   14  Ark. 


§  240  SALES    UPON    CREDIT.  427 

material  facts,  to  show  a  fraudulent  design  in  disposing  of 
property,  is  not  regarded  as  sufficient  of  itself  to  establish 
it.1  The  sale  of  all  the  effects  of  an  insolvent  copartner, 
ship  upon  credit  at  a  fair  valuation,  to  a  responsible 
vendee,  who  knew  of  the  insolvency,  is  not  per  se  fraudu- 
lent ;2  nor  does  proof  of  a  sale  upon  credit,  by  a  party  in 
failing  circumstances,  to  one  who  had  knowledge  of  these 
circumstances,  necessarily  establish  fraud.3 

§  240.  Sales  upon  credit.  —  It  must  be  remembered  that 
every  delay  to  which  a  creditor  is  subjected  in  the  collec- 
tion of  his  debt  is  not  necessarily  fraudulent.4  Insolvency 
as  is  elsewhere  shown,  does  not  deprive  a  debtor  of  the 
right  to  sell  his  property  ; 5  and  if  the  sale  is  made  in 
good  faith,  and  without  any  intent  to  hinder,  delay,  or 
defraud  creditors,  the  mere  fact  that  it  was  made  upon 
credit  does  not  require  that  it  should  be  declared  invalid.0 
The  court,  in  Roberts  v.  Shepard,  said  :7  "  A  sale  upon 
credit  of  part  of  their  property,  by  an  insolvent  firm,  is  a 
circumstance  which  may  be  considered,  with  others,  bear- 
ing upon  the  question  of  fraudulent  intent,  but  alone  does 
not  necessarily  establish  it."  Certainly  it  will  not  do  to 
say  that  the  law  presumes  that  every  man  who  sells  on 
credit  does  so  with  intent  to  hinder  and  delay  his  cred- 
itors.8 In  Ruhl  v.  Phillips,11  the  New  York  Commis- 
sion of  Appeals,  reversing  the  court  below,10  held  that 
the  sale  of  the  entire  effects  of  an  insolvent  copartnership 
at  a  fair  valuation,  upon  a  credit  ranging  from  four  to 
twenty-four    months,    to    a    responsible    vendee,     having 


1  Leffel    v.  Schermerhorn,  13  Neb.  5  See  $  52.     Beasley  v.  Bray,  98  X. 
342.  C.  266,  3  S.  E.  Rep.  497. 

2  Ruhl   v.   Phillips.    48    N.   Y.   125,  6  Beasley    v.  Bray,  98  N.  C.  266,  3 
8  Am.  Rep.  522.  S.  E.  Rep.  497. 

3  Loeschigk  v.  Bridge,  42  N.  Y.  421.  7  2  Daly  (N.  Y.)   112. 

4  Loeschigk  v.  Bridge,  42  Barb.  (N.  N  Gillet  v.  Phelps,  12  Wis.  899. 
Y.)  173  :  affi'd  42  N.  Y.  421.  s  48  N.  Y.  125. 

10  2  Daly  (N.  Y.)  45. 


428  UNUSUAL    ACTS   AND    TRANSACTIONS.  §  24] 

knowledge  of  the  insolvency,  was  not  fraudulent  per  se. 
In  the  New  York  Court  of  Appeals1  the  principle  is 
enunciated  that  the  mere  fact  of  a  sale  of  his  property  by 
a  party  in  failing  circumstances,  to  a  purchaser  having 
knowledge  of  his  condition,  upon  an  average  credit  of 
sixteen  months,  did  not  per  ^'establish  fraud,  or  an  intent 
to  hinder  or  delay  creditors.2  Where,  however,  it  appears 
upon  the  face  of  the  transaction  that  the  parties  contem- 
plated a  large  surplus,  and  the  property  is  practically  pro- 
tected from  forced  sales  or  attachments  or  levies  for  two 
years,  the  instrument  will  be  declared  void  as  hindering 
and  delaying  creditors.3  A  sale  upon  a  long  credit  to  an 
irresponsible  purchaser  with  no  security  is  declared  in 
Tennessee  to  be  a  badge  of  fraud.4  So  in  Texas  a  sale 
on  an  indefinite  credit  is  a  badge.5 

§  241.  Unusual  acts  and  transactions. —  Courts  and  juries 
are  often  influenced  in  favor  of  creditors  by  slight  circum- 
stances connected  with  the  transaction  indicating  exces- 
sive efforts  to  give  the  conveyance  the  appearance  of 
fairness,0  or  by  facts  which  are  not  the  usual  attendants 
of  business  transactions.7  Honesty  requires  no  strata- 
gem or  subterfuge  to  support  and  aid  it.8  In  Adams  v. 
1  )avidson 9  the  assignee  took  a  fellow-clerk  with  him 
to  witness  an  attempted  transfer  of  possession,  and 
requested  him  to  "  pay  attention  and  recollect  what  he 
heard."     The  court   were  plainly  influenced   by  the   evi- 


1  Loeschigk    v.    Bridge,    42   N.    Y.  5  Jacobs  v.  Totty,  76  Tex.  343,   13 

421.  S.  W.  Rep.  372. 

<  !ompare  Brinley  v.  Spring.  7  Me.  6  Hart   v.  Sandy,  39  W.  Va.  G44,  20 

241;    Harris    v.    Burns,  50  Cal.  140;  S.  E.  Rep.  665. 

Lewis  v.  Caperton,  8  Gratt.  (Va.)  148.  "Stevens   v.  Pierce,  147  Mass.  510, 

Bigelow    v.  Stringer,    40  Mo.    195.  18  N.  E.  Rep.  411  :   Danjean  v.  Black- 

Compare  Reynolds  v.  Crook,  31   Ala.  eter,  13  La.   Ann.   597;    Peabody   v. 

634     Jacobs  v.  Totty,  76  Tex.  343,  13  Knapp,  15:;  Mass.    242,   26  N.  E.  Rep. 

S.  W.  Rep.  372.  696. 

1  Robinson  \.  Frankel,  85Tenn.484,  B  Comstock  v.  Ray  ford,  20  Miss.  391. 

3  S.  W.  Rep.  652.  »  10  N.  Y.  309,  312. 


§241  UNUSUAL    ACTS    AND   TRANSACTIONS.  429 

dence  of  this  request,  and  observed  that  it  was  wholly 
unnecessary  if  the  parties  intended  to  comply  with  the 
exactions  of  good  faith  in  taking  and  holding  possession 
of  the  property  assigned.  To  a  similar  effect  is  the  case 
of  Hartshorn  v.  Eames.1  In  that  case  the  court  said 
that  there  was  no  indication  of  great  formality  in  trans- 
acting business  between  the  parties,  except  on  the  occa- 
sion in  question,  when  great  precision  was  resorted  to  ; 
an  accurate  calculation  and  valuation  gone  into,  and  the 
claim  of  the  grantee  made  to  overbalance  the  valuation. 
These  with  other  facts  led  the  court  to  believe  that  the 
transaction  resembled  a  farce  rather  than  a  bona  fide 
transaction.  Painstaking  legal  formalities  may  be  a 
badge  of  fraud.3  Again  it  is  said  that  "  bona  fide  trans- 
actions do  not  need  to  be  clothed  with  the  extraordinary 
pretense  of  prompt  payment."3  In  Langford  v.  Ply4  the 
deed  of  grift  contained  this  clause  :  "  Now  this  indenture 
is  not  to  hinder  or  delay  the  collection  of  any  of  my  just 
debts,  but  the  same  are  to  be  paid."  A  suit  for  slander 
was  pending  at  the  time.  The  court  said  that  this  clause 
was  evidently  the  result  of  a  consciousness  on  the  part  of 
the  assignor  that  others  might  think  the  deed  was  made 
with  a  fraudulent  design,  and,  as  he  was  otherwise  free 
from  debt,  it  indicated  that  his  purpose  in  making  the 
transfer  was  to  defeat  the  judgment  which  might  possibly 
be  recovered  in  the  action  for  slander.5  "  Studied  for- 
mality and  apparent  fairness  "  will  not  save  a  fraudulent 


1  31  Me.  100.  go  through  with  the  formality  of  pro- 

*  Higgins  v.  Spahr,  145  Ind.  167,  43  curing,  executing  and   delivering   a 

N.  E.Rep.  11.  hill  of  sale  of  the  property  :  conducl 

3  King  v.  Moon,  42  Mo.  551,  561;  unusual  in  respect  to  property  of  this 
Hart  v.  Sandy,  39  W.  Va.  644,  20  S.  character  where  the  sale  is  honestly 
E.  Rep.  665.  made."    This  was  regarded  as  one  of 

4  7  Humph.  (Tenn.)  587.  the  circumstances  attending  the  sale 
•IH  Mead   v.  Noyes,  44  Conn.  491,  which  tended    strongly  to   show   the 

"the  parties  took   the  precaution  to  existence  of  actual  fraud. 


430  UNUSUAL   ACTS    AND   TRANSACTIONS.  £24! 

transaction.1  In  Crawford  v.  Kirksey2  it  was  contended 
1)}-  counsel  that  very  great  and  unusual  particularity  fur- 
nished badges  of  frauds  The  court  observed  that  if  the 
transaction  was  consummated  quietly  and  without  wit- 
nesses, then  the  complaint  would  be  that  it  was  secretly 
effected.  If  unusual  publicity  or  particularity  character- 
ized the  transaction,  this  would  be  urged  as  a  badge  of 
fraud.  This,  it  was  said,  savored  of  the  water  test  which 
in  former  years  was  applied  to  those  suspected  of  witch- 
craft. If  they  sank  they  were  innocent,  but  they  incurred 
great  hazard  of  losing  their  lives  by  drowning  ;  if  they 
swam  they  were  adjudged  witches  and  perished  at  the 
stake. 

It  may  be  observed  that  the  absence  of  memoranda,  or 
of  any  record  of  the  consideration;4  the  failure  to  take 
an  account  of  the  stock  and  no  agreement  as  to  the  exact 
terms  of  settlement  ;"'  a  false  admission  of  the  receipt  of 
the  consideration  ; ,;  unusual  clauses  in  the  instrument  ; r 
giving  the  vendee  power  to  prefer  other  creditors  to  the 


1  First    Nat.    Hank    v.    Snowies,   67  The  act,   therefore,    would   rather  he 

Wis.  385,  28  N.  W.  Rep.  235.  evidence  of   caution,    like  the  direc- 

1  55  Ala.  300.  tion  sometimes  given  to  scriveners  to 

The  tacts  in    Lake    v.    Morris,    30  draw  up  strong  writings,    which,  to 

Conn.  '204.  afford   illustration   of  the  say  the  least,  would  furnish  as  much 

general  subject.    The  vendee  was  in  ground  to  suspect  the  honesty  of  a 

actual  possession  of  the  property  pur-  transaction  as  it   would   evidence  of 

chased.      Hence    counsel    contended  its  bona  fides." 

that  the  sale  was   void   because  there  'Hubbard    v.    Allen,   59    Ala.  300; 

bad  hecn  no  actual  delivery  of  posses-  Alexander  v.  Todd,  1    Bond   179;  Mc- 

Bion.     The  court,    in   overruling   the  Carty   v.  Fletcher,  12  Wash.  244,  40 

argument,  said:  "No  such  delivery  Pac.  Rep.  939. 

■"ill. I  have   taken    place    without  first  Wlieelden  v.    Wilson,   44    Me.    20; 

taking  the  horses  from  the  plaintiff's  Frisk  v.   Reigehnan,  75  Wis.  499.43 

»ion  for  the  mere  purposeof  re-  N.  W.  Rep.  1117,  44  Id.  766. 
delivering  them  to  him  again.     But  a         fi  Alexander  v.  Todd,  1  Bond  180: 

merely  formal  act    like    this    we  pre-  Balto.  &  O.  R.  R.  Co.  v.  Hoge,  34  Pa. 

BU would     never     occur     between  St.  214  ;    Watt  v.  drove.  2  Sch.  &  Lef. 

parties    whose    only    object     was    t<>  501. 

place  the  purchased  property   in  the  Pilling  v.  Otis,  13  Wis. 496  ;  Gibba 

hands  of  the  purchaser  for   his  use.  v.  Thompson,  7  Humph.  (Tenn.)  179. 


§  24i 


UNUSUAL    i.CTS    A.ND    TRANSACT!*  >NS. 


43  > 


extent  of  the  surplus;1  a  sale  to  a  creditor  without  a 
surrender  of  the  evidence  of  indebtedness;-  a  sale  not 
conducted  in  the  "  usual  and  ordinary  course  of  busi- 
ness ; 8  conduct  of  the  parties  which  is  "exceptional  and 
peculiar  ;  "  4  a  conveyance  of  real  estate  without  adequate 
security  ;5  a  sale  of  a  horse  on  the  Sabbath  without  trying 
the  same;'"'  absence  of  authentic  evidence  of  indebted- 
ness, considerable  in  amount,  other  than  a  pencil  memo- 
randum ;7  contradictory  and  irreconcilable  accounts  of  the 
transaction  given  by  the  vendor  and  vendee  ;8  receiving 
the  rents  and  managing  the.  estate  by  the  vendor  after 
the  alleged  sale,0  under  an  assumed  agency  from  the 
vendee,  but  without  any  evidence  of  a  genuine  agency 
other  than  the  uncorroborated  assertion  of  the  party ; 10 
absence  of  means  in  the  vendee;11  preparation  of  the 
deed  at  the  sole  instance  of  the  grantee;12  leaving  the 
business  sign  the  same;13  continuing  to  act  as  owner," 
employment  of  the  vendor  after  the  sale;1'    sacrificing 


1  Seger's  Son  v.  Thomas  Bros.,  107 
Mo  643,  18  S.  W.  Rep.  33  ;  Barnum 
v.  Hempstead,  7  Paige  (N.  Y.)  568. 

2  Gardner  v.  Broussard,  39  Tex.  372 ; 
Webb  v.  Ingham,  29  W.  Va.  389,  1  S. 
E.  Rep.  816. 

3  State  ex  rel,  Peirce  v.  Merritt,  70 
Mo.  283  ;  Snell  v.  Harrison,  104  Mo. 
158,  16  S.  W.  Rep.  152  ;  Godfrey  v. 
Miller,  80  Cal.  420,  22  Pac.  Rep.  290. 

4  Brinks  v.  Heise,  84  Pa.  St.  253  ; 
Gollober  v.  Martin,  33  Kan.  255,  6 
Pac.  Rep.  267  :  Hart  v.  Sandy,  39  W. 
Va.  644,  657,  20  S.  E.  Rep.  665. 

6  Owen  v.  Arvis,  26  N.  J.  Law  32. 

6  Godfrey  v.  Miller,  80  Cal.  420,  22 
Pac.  Rep.  290. 

7  Brinks  v.  Heise,  84  Pa.  St.  253. 

8  Marshall  v.  Green,  24  Ark.  419. 

9  Banner  v.  May,  2  Wash.  St.  221, 
26  Pac.  Rep.  248  ;  Mertens  v.  Welsing, 
85  Iowa  510,  52  N.  W.  Rep.  362. 


"'  Sands  v.  Codwise,  4  Johns.  (N.  V.) 
536. 

11  Danby  v.  Sharp,  2  MacAr.  (D.  C.) 
435  ;  Stevens  v.  Dillman,  86  111.  233. 
See  Castle  v.  Billiard,  23  How.  186. 
In  Morford  v.  Dieffenbacker,  51  Mich. 
593,  607,  20  N.  W.  Rep.  600,  Cooley, 
C.  J.,  said  :  "  A  sale  to  a  person  with- 
out means,  when  ready  money  was 
the  nominal  purpose,  must  neces- 
sarily be  suspicious." 

12 Sears  v.  Shafer,  1  Barb.  (N.  Y.) 
408. 

13  Danby  v.  Sharp,  2  MacAr.  (D.C.) 
435;  Wright  v.  McCorniick,  6'i  Mo 
430. 

14Second  Nat.  Bk.  v.  Yeaton,  •">::  Md. 
443. 

If,McKibbin  v.  .Martin.  64  Pa.  St. 
352:  Eurlburd  v.  Bogardus.  in  Cal. 
518:  Rothgerber  v.  Gough,  52  [11.438. 

See   Bird   v.    Andrews,    10  <  'mill.  ■>  12 


45- 


UNUSUAL    \(    rS    AND    TRANSACTIONS. 


;  241 


property  for  one-fourth  of  its  value;1  deeding  property 
to  relatives  without  their  knowledge;'"  concealment;3 
absence  of  evidence  which  is  supposed  to  be  within  the 
reach  of  the  party  charged  with  the  fraudulent  act ; 4  vague 
and  partial  explanations;5  taking  goods  in  excess  of  a 
debt;6  neglect  to  testify;7  or  to  offer  explanation;8 
destruction  of  letters  relating  to  the  controversy;'-' 
tendering    security    without    solicitation;10    transferring 


'  Stevens  v.  Dillman,  36  111.  235; 
Frisk  v.  Reigelman,  75  Wis.  499,  43 
X    W.  Rep.  HIT.  11  Id.  766. 

Lavender  v.  Boaz,  17  111.  App. 
421;  Omaha  Hardware  Co.  v.  Dun- 
can, 31    Neb.  217.  47  N.  W.   Rep.  846. 

»Hoffer  v.  Gladden,  75  Ga.  538. 

4  Newman  v.  Cordell,  43  Barb.  (X. 
Y.)  148-461  ;  Peeblee  v.  Horton,  64  X. 

• :.  374. 

Smith  v.  Brown,  34  Mich.  455; 
Helms  v.  Green,  105  XT.  C.  252.  11  S. 
E.  Rep.  470. 

"McVeagh  v.  Baxter.  82  Mo.  518  ; 
Hart  v.  Sandy,  39  W.  Va  644,  657, 
■mi  s.  E.  Rep.  665. 

"  Graham  v.  Furber,  14  C.  B  410  ; 
Goshorn  v.  Snodgrass,  17  W.  Va.  770; 
Conn.  Mutual  Life  Ins.  Co.  v.  Smith, 
117  Mo.  261,  22  S.  \V.  Rep.  023;  Ham 
v.  Gilmore,  7  Misc.  (N.  Y.)  596, 
59  X.  Y.  St.  Rep.  291,  28  X.  Y. 
Sii|»|i.  126;  Throckmorton  v.  Chap- 
man, 65  Conn.  454,  32  Atl.  Rep. 
930;  Whitney  v.  Rose,  43  Mich.  27.  1 
X.  W.  Rep.  557  :  Second  Nat.  Bk.  v. 
Yeaton,  53  Md.  4 17 ;  Henderson 
v.  Henderson,  55  Mo.  559.  See 
Harrell  v.  Mitchell, 61  Ala.  270.  "The 
omission  of  Johnson  t<>  testily  as  a 
witness  for  himself,  in  reply  to  the 
evidence  againsl  him,  is  of  greal 
n  eight ."  Bom  den  v.  Johnson,  101  1 '. 
2  S.  I !.  Rep  246.  See  Clark 
\.  Van  Riemsdyk,  '.t  Cranch  L53 ; 
Clements  v.  Moore,  6  Wall.  299; 
Hoffer    v.     Gladden,    75    Ga.     538; 


Schwier  v.  N.  Y.  Cent,  &  H.  R.  R. 
R.  Co.,    90  N.    Y.    564.     In   Bleecker 

v.  Johnston,  69  N.  Y\  311,  the 
court  says:  "The  non-attendance 
of  the  absent  defendant  at  the  trial 
may  have  been  a  proper  subject  of 
remark  and  for  consideration  by  the 
jury,  and  if  they,  under  all  the  cir- 
cumstances, thought  his  absence  sus- 
picious, they  might  take  a  less  favor- 
able view  of  the  testimony  on  the 
part  of  the  defense  ;  but  this  was  the 
extent  to  which  the  plaintiff  was  en- 
titled to  any  benefit  from  the  circum- 
stance. (People  v.  Dyle,  21  N.  Y. 
578).  It  was  not  a  case  for  the  ap- 
plication of  the  stringent  maxim, 
'Omnia  presumatur  contra  spoliato- 
/•<///."  That  is  applied  in  its  rigor  to 
cases  of  a  tortious  destruction  or  sup- 
pression of  documents,  or  other  in- 
struments of  evidence,  or  resorting  to 
improper  means  to  get  or  keep  wit- 
nesses away  from  the  trial.  If  a  party 
by  his  own  tortious  act  withhold  the 
evidence  by  which  the  nature  of  the 
case  would  be  made  manifest,  a  pre- 
sumption to  his  disadvantage  may  be 
indulged  by  the  jury."  But  see  Clark 
v.  Krause,  2  Mackey  (D.  C.)  570. 

a  Schumacher    v.    Bell,  164  111.    184, 
15  X.  E.  Hep.  428. 
'  Burke  v.  Burke.  31  Mich.  155. 
10  Kellogg  v.  Root,  23  Fed   Hep.  525; 
Wis.'  v.  Wilds.  77  Iowa  592,  42  X.  W. 
Rep.  553. 


§241  UNUSUAL   ACTS    A.ND    TRANSA \S.  (.33 

professedly  to  prevent  the  sacrifice  of  the  property;1 
circuitous  and  evidently  covinous  series  of  transfers 
through  relatives;2  doing  things  for  effect;3  taking 
additional  security  by  way  of  chattel  mortgage  on  a  claim 
already  secured  by  mortgage  on  real  estate;4  extending 
unusual  credit;5  taking  currency  in  payment  instead  of  a 
check;6  all  these  are  indicia  of  fraud  upon  creditors 
proper  for  the  consideration  of  the  jury,  or  of  a  court  of 
equity  in  cases  where  a  jury  trial  is  not  had. 

On  the  other  hand,  the  purchase  of  land  by  an  attorney 
without  making  an  abstract  of  title  is  not  necessarily  evi- 
dence of  fraud ; 7  nor  is  a  sale  by  an  insolvent  of  his  whole 
stock  in  trade  upon  credit  always  covinous,8  though  it  is 
circumscribed  by  fraudulent  presumptions.  It  has  been 
even  held  that  evidence  of  a  sale  by  a  party  indebted,  of 
an  uninventoried  stock  of  goods,  on  credit,  to  a  near  rela- 
tive failed  to  establish  fraud  ;  nor  is  a  trust  void  because 
not  particularly  declared.9  Then  the  fact  that  the  pur- 
chaser has  no  use  for  the  property  is  not  evidence  of 
fraud.10  The  want  of  minute  accuracy  of  language,  and 
the  disregard  of  the  usual  forms,  will  not  render  an 
assignment  void,11  nor  is  it  affected  by  a  failure  to  file 
schedules,12  nor  by  the  failure  to  record  it  for  a  few  days.13 
The  failure  to  describe  the  debt  secured  by  a  chattel 
mortgage  will  not  invalidate  it.1* 

In  a  Massachusetts  case  it  was  decided  that  a  party  was 

1  German    Ins.  Bank  v.  Nunes,  80  9  Forbes  v.  Scannell,  13  Cal.  287. 
Ky.  334.                                                              '"Grubbs  v.  Greer,  5  Coldw.  (Tenn.) 

2  Greer  v.   O'Brien,  36  W.  Va.  287,      548. 

15  S.  E.  Rep.  74.  "Meeker  v.   Saunders,   6  Iowa  67. 

3  Comstock  v.  Rayford,  20  Miss.  370.      Compare    State    v.    Keeler,    49    Mo. 

4  Crapster  v.  Williams,  21  Kan.  109.      548. 

6  Cowling  v.  Estes,  15  111.  App.  260.  1S  Produce  Bank  v.  Morton,  67  N.  Y. 

6  Smith   v.  White,   50  Hun  (N.  Y .),  203.     See  Brennan  v.  Wilson,  1    Am. 
603,  2  N.   Y.  Supp.  855.  Insolv.  Rep.  77. 

7  Jenkins  v.  Einstein,  3  Biss.  129.  13Hoopes  v.  Knell.  31  Md.  553. 

8  Scheitlin  v.  Stone,  43  Barb.  (N.  Y.)  14Magirl  v.  Magirl,  89  Iowa  342,  56 
634,  Sutherland,  J.,  dissenting.  N.  W.  Rep.  510. 

28 


434 


RELATIONSHIP. 


§242 


not  entitled  to  offer  the  testimony  of  witnesses  to  the 
effect  "that  the  giving  of  a  mortgage,  such  as  the  mort- 
gage in  question,  would  not  be  in  the  usual  and  ordinary 
course  of  such  business."  That  was  considered  to  be  the 
question  for  the  jury  to  decide.1 

>f  242.  Effect  of  relationship  upon  debtor's  transactions. — 
The  cases  relating  to  the  effect  of  proof  of  relationship 
of  parties  dealing  with  the  debtor  to  him  are  numerous. 
A  clearly  formulated  rule  on  the  subject  is  not  possible. 
It  is  said  by  the  Supreme  Court  of  Pennsylvania  that 
"  there  is  no  law  prohibiting  persons,  standing  in  near 
relations  of  business  or  affinity,  from  buying  from  each 
other  ;  or  requiring  them  to  conduct  their  business  with 
each  other  in  special  form.1'  ~  The  sale  of  property  by  a 
father  to  his  son,  or  by  the  son  to  his  father,  cannot  in 
itself  be  considered  as  a  badge  of  fraud,3  and  sometimes 
the  strongest  considerations  of  duty  may  prompt  a  son  to 
prefer  the  claim  of  a  widowed  mother.4  The  court  may 
require  a  mother  to  show  that  she  had  the  means  to 
make  advances  as  claimed  to  her  son.5  "  The  relation- 
ship of  assignor  and  assignee,"  says  Finch,  J.,  "and  their 


Buffum  v.  Jones,  144  Mass.  29,  31, 
10  N.  E.  Rep.  471. 

Dunlap  v.  Bournonville,  26  Pa. 
St.  ?:i.  See  Reehling  v.  Byers,  94  Pa. 
si.  333  .  McVicker  v.  May,  :i  Pa.  St. 
224  ,  Forsyth  v.  Matthews,  14  Pa.  St. 
100;  Bumpas  v.  Dotson,  7  Humph. 
(Tenn.)  310;  Shearon  v.  Henderson, 
38  Tex.  '-'■")') ;  Wilson  v.  Lott,  5  Fla 
305  ;  Bowman  v.  Houdlette,  is  Me. 
245  :  Tyberandl  v.  Raucke,  96  111.  71  ;' 
Pusej  v.  Gardner,  21  W.  Va.  477  ; 
Lininger  \.  Berron,  18  Neb.  452,  25 
N.  W.  Rep.  578;  Oherholtzer  v. 
Bazen,  92  [owa  602,  til  N.  \V.  Rep. 
365 ;  Rockland  County  v.  Summer 
vill.-.  1  i'.i  I  ml.  lilt:..  :!'.»  X.  E  Rep.  307; 
Barr  v.  Church,  82  Wis.  382,  52  N.  W. 
Rep.  591  :  Gray  \.  Galpin,  98  Cal.  633, 


33  Pac.  Rep.  725  :  Bierne  v.  Ray,  37 
W.  Va.  577,  16  S.  E.  Rep.  804  ;  Steel 
v.  De  May,  102  Mich.  274,  60  N.  W. 
Rep.  684  ;  Leppig  v.  Bretzel,  48  Mich. 
321,  12  N.  W.  Rep.  199;  Kelly  v. 
Fleming,  113  N.  C.  133,  18  8.  E.  Rep. 
81  :  Reehling  v.  Byers,  94  Pa.  St.  316  ; 
Kitchen  v.  McCloskey,  150  Pa.  St. 
384,  .'I  AH.  Rep.68S;  Bank  v.  Bridgers, 
114  N.  C.  383,  19  S.  E.  Rep.  666. 

Shearon    v.    Henderson,    38  Tex. 
251  ;    Fleischer   v.     Dignon.   53    Iowa 

2S8;   Wl lden  v.  Wilson,  44  Me.  11  ; 

s.  p.,  Drmarst  v.  Terhune,  18  N.J.  Eq. 
49:    Low   v.   Wortman,   44   N.  J.  Eq. 
193,  7  Atl.  Rep.  654  :  14  Id   586. 
1  Colej    v.   Coley,  14  N.  J.  Eq.  350. 

Thompson    v.    Tower    Mfg.    Co., 

101    Ala.   110,    Iti  So.   Rep.   116. 


§  242 


RELATIONSHIP. 


435 


intimacy  and  friendship,  and  the  preference  given  to  the 
latter  as  a  creditor  prove  nothing  by  themselves.  They 
are  consistent  with  honesty  and  innocence,  and  become 
only  important  when  other  circumstances,  indicative  of 
fraud,  invest  them  with  a  new  character  and  purpose,  and 
transform  them  from  equivocal  and  ambiguous  facts  into 
positive  badges  of  fraud."  l  The  majority  of  the  cases 
hold  that  relationship  of  the  parties,  however,  is  cal- 
culated to  awaken  suspicion,2  and  the  transaction  will  be 
closely  scrutinized,3  if  there  are  any  facts  which  tend  to 
indicate  fraud,  though  the  relationship  is  not  of  itself 
sufficient  to  raise  a  presumption  of  fraud.*      It  may  be 


1  Shultz  v.  Hoagland,  85  N.  Y.  468  ; 
s.  p.,  Clark  v.  Krause,  2Mackey(D.  C.) 
566  ;  Gottlieb  v.  Thatcher,  151  U.  S. 
271,  14  S.  C.  Rep.  319  ;  Kitchen  v. 
McCloskey,  150  Pa.  St.  376,  24  Atl. 
Rep  688  :  Barr  v.  Church,  82  Wis. 
382,  52  N.  W.  Rep.  591  ;  First  Nat. 
Bk.  v.  Smith,  93  Ala.  99,  9  So.  Rep. 
548;  Shober  v.  Wheeler,  113  N.  C. 
370,  18  S.  E.  Rep.  328 ;  Smith  v.  Reid, 
134  N.  Y.  568,  31  N.  E.  Rep.  1082  ; 
Bierne  v.  Ray,  37  W.  Va.  571,  16  S. 
E.  Rep.  804 ;  Martin  v.  Fox,  40  Mo. 
App.  664.  See  Renney  v.  Williams, 
89  Mo.  145,  1  S.  W.  Rep.  227 

2  Bumpas  v.  Dotson,  7  Humph. 
(Tenn.)  310;  Forsyth  v.  Matthews,  14 
Pa.  St.  100;  Harrell  v.  Mitchell,  61 
Ala  271  ;  Engraham  v.  Pate,  51  Ga. 
537;  Sherman  v.  Hogland,  73  Ind. 
473  ;  Moog  v.  Farley,  79  Ala.  246 ; 
Gregory  v.  Gray,  88  Ga.  172,  14  S.  E. 
Rep.  187  ;  Fisher  v.  Moog,  39  Fed.  Rep. 
665;  Davis  v.  Schwartz,  155  U.  S. 
638,  15  S.  C.  Rep.  237 ;  First  Nat.  Bk. 
v  Moffatt,  77  Hun  (N.  Y. )  468, 28  N.  Y. 
Supp.  1078;  Robinson  v.  Frankel,  85 
Tenn.  478.  3  S.  W.  Rep.  652. 

3  Marshall  v.  Croom,  60  Ala.  121: 
Fisher  v.  Shelver,  53  Wis.  501,  10  N. 
W.  Rep.  681  ;  Seitz  v.  Mitchell,  94  U. 


S.  580 ;  Simms  v.  Morse,  4  Hughes 
582  ;  Fisher  v.  Herron,  22  Neb.  185,  34 
N.  W.  Rep.  365;  Bartlett  v.  Chees- 
brough,  23  Neb.  771,  37  N.  W.  Rep. 
652;  Farrington  v.  Stone,  35  Neb. 
456,  53  N.  W.  Rep.  389  ;  Middleton  v. 
Sinclair,  5  Cranch,  C.  C.  409,  17 
Fed.  Cas.  275 ;  McEvony  v.  Row- 
land, 43  Neb.  97,  61  N.  W.  Rep. 
124  ;  Archer  v.  Long,  32  S.  C. 
171,  11  S.  E.  Rep.  86  ;  Livey  v.  Win- 
ton,  30  W.  Va.  554,  4  S.  E.  Rep.  451  ; 
Shauer  v.  Alterton,  151  IT.  S.  607,  14 
S.  C.  Rep.  442.  Mr.  May  says:  "A 
settlement  or  other  conveyance  in  fa- 
vor of  a  near  relative  is  open  to  more 
suspicion  than  one  to  a  mere  stran- 
ger, inasmuch  as  it  is  more  likely  t<> 
be  intended,  not  as  a  real  transfer  of 
property  by  which  the  donor  puts  it 
out  of  his  own  reach,  but  a  feigned 
and  collusive  arrangement  by  which 
it  is  secretly  understood  thai  tli" 
donee  shall  hold  the  property  against 
the  claims  of  creditors  or  purchasers, 
and  still  let  the  donor  receive  benefits 
from  it."  May's  Fraudulent  Convey- 
ances, p.  236. 

*  King  v.  Russell,  40  Tex.  13*2  ;  Mar- 
shall v.  Croom,  60  Ala.  121.  Bierne 
v.  Ray,  :)7  W.  Va.  .-,70.  16  S.  E.  Rep. 


436  RELATIONSHIP.  §  242 

considered,  with  the  other  facts,  by  the  jury,1  and  rather 
tends  to  aid  the  creditors, ~  for  it  is  regarded  as  highly 
probable  that  a  party  intending  to  perpetrate  a  fraud 
would  look  for  aid  and  connivance  to  a  relative  rather 
than  to  a  stranger.  Still  an  instruction  to  a  jury  that  a 
deed  given  to  a  brother  to  secure  a  debt  is  prima  facie 
fraudulent  is  erroneous.3  When  relationship  is  coupled 
with  secrecy  in  the  transaction,  it  may,  unless  explained 
or  justified,  be  regarded  as  fraudulent.4  The  same  rule 
applies  when  the  transfer  conveys  the  debtor's  entire 
estate,  and  other  badges  accompany  it.5  In  some  cases 
it  is  held  that  in  transactions  between  relatives  no  clearer 
proof  of  good  faith  is  required  than  in  transactions 
between  strangers.0  It  may  be  observed  here-  that  the 
fact  that  the  creditors  who  obtained  judgments  by  con- 
fession bore  intimate  relations  to  the  debtors,  the  delay 
in  the  levy  of  the  execution,  the  unusual  time  and  order 
under  which  the  assignee  took  possession,  and  the  agency 
of  the  same  attorney  in  all  the  proceedings,  though,  per- 
haps, casting  suspicion  upon  the  proceedings,  are  not  in 
themselves  sufficiently  strong  to  sustain  an  imputation  of 
bad  faith,  or  a  charge  of  fraudulent  preference.7  We 
may  here  advert  to  the  rule  of  the  common  law  that  a 
debtor  has  a  right  to  prefer  one  class  of  creditors  to 
another,  and  that  it  is  error  "to  encourage  a  jury  to  take 
into  consideration  the  exercise  of  this  right  as  'a  circum- 


804  :  Ridge  \.  Greenwell,  r>8  Mo.  App.  C.  883,  19  S.  E.  Rep.  666.     See  Gott- 

179;   Bleiler   v.   Moore,  88  Wis.  438,  lieb  v.  Thatcher,  151   U.S.  27!).  14  S. 

60    X.    W.    Rep.    792;    Robinson    v.  C.  Rep.  319 ;  Bleiler  v.  Moore.  88  Wis. 

I  rank(  I.  85  Tenn    175,  8  8.    W.  Rep.  138,  60 N.  W.  Rep.  792. 

Ml.  n   v.    Kirk,  si    [0wa  658,47  l  Reiger  v.  Davis,  67  N.  C.  189. 

X    W.  Ren  006.                  .  Embury   v.  Klemm.  30  N.  J.  Eq. 

Engrahaoi   \.   Pate,    51   Ga.  537;  523;  Johnston  v.  Dick.  27  Miss.  277. 

Burton  \    Boyd,  7  Kan.  17.  'Teague  v.   Lindsey,    106  Ala.  266, 

1  Demares!    v    Terhune,    is    n.  J.  17  So.  Rep.  538. 

Baldwin    v.    Freydendall,    10   111. 

Citj    Nat.   I'.k    v.  Bridgers,  II  I  X.  App.  L07. 


§  242 


RELATIONSHIP. 


In- 


stance of  suspicion  '  in  deciding  upon  the  fairness  of  the 
transfer." ' 

The  case  of  Salmon  v.  Bennett2  has  exerted  a  potent 
influence  over  decisions  in  this  country  concerning 
voluntary  conveyances.  In  the  course  of  the  opinion 
Swift,  C.  J.,  said  :3  "  Mere  indebtedness  at  the  time  will 
not,  in  all  cases,  render  a  voluntary  conveyance  void  as  to 
creditors,  where  it  is  a  provision  for  a  child  in  considera- 
tion of  love  and  affection;  for  if  all  gifts  by  way  of 
settlement  to  children,  by  men  in  affluent  and  prosperous 
circumstances,  were  to  be  rendered  void  upon  a  reverse 
of  fortune,  it  would  involve  children  in  the  ruin  of  their 
parents,  and  in  many  cases  might  produce  a  greater  evil 
than  that  intended  to  be  remedied."  This  rule  has  been 
applied  to  conveyances  to  wives,4  as  well  as  to  children,5 
grandchildren,0  and  other  near  relatives.7 


1  Born  v.  Shaw,  29  Pa.  St.  292. 

2  1  Conn.  525.  See  24  Am.  Law 
Reg.  N.  S.  496. 

3  Salmon  v.  Bennett,  1  Conn.  525, 
542.  • 

4  See  Clayton  v.  Brown,  17  Ga.  217  ; 
s.  c.  again  30  Ga.  490  ;  Weed  v. 
Davis,  25  Ga.  684  ;  Goodman  v.  Wine- 
land,  18  Reporter  (Md.)  622  ;  Kipp  v. 
Hanna,  2  Bland  Ch.  (Md.)  26  ;  Filley 
v.  Register,  4  Minn.  391  ;  Walsh  v. 
Ketchum,  12  Mo.  App.  580  ;  Patten  v. 
Casey,  57  Mo.  118 ;  Potter  v.  Mc- 
Dowell, 31  Mo.  62  ;  Amnion's  Appeal, 
03  Pa.  St.  284  ;  Carl  v.  Smith,  8  Phila. 
(Pa.)  569;  Perkins  v.  Perkins,  1 
Tenn.  Ch.  537  ;  Yost  v.  Hudiburg,  2 
Lea  (Tenn.)  627  ;  Morrison  v.  Clark, 
55  Tex.  437  ;  Belt  v.  Raguet,  27 
Tex.  471  ;  Smith  v.  Vodges,  92  U. 
S.  183  ;  Lloyd  v.  Fulton,  91  U.  S. 
479  ;  French  v.  Holmes,  67  Me.  186 ; 
Winchester  v.  Charter,  12  Allen 
(Mass.)  606. 

5  See  Dodd  v.  McCraw,  8  Ark.  83  ; 


Smith  v.  Yell,  8  Ark.  470  ;  Clayton  v. 
Brown,  17  Ga.  217  ;  Patterson  v.  Mc- 
Kinney,  97  111.  41  ;  Worthington  v. 
Bullitt,  6  Md.  172;  Worthington  v. 
Shipley,  5  Gil]  (Md.)  449  :  Smith  v. 
Lowell,  6  N.  H.  67 ;  Brice  v.  Myers,  5 
Ohio  121  ;  Crumbaugh  v.  Kugler,  2 
Ohio  St.  373;  Grotenkemper  v.  Harris, 
25  Ohio  St.  510;  Miller  v  Wilson,  L5 
Ohio  108;  Posten  v.  Posten,  1  Wharl. 
(Pa.)  27  ;  Chambers  v.  Spencer,  5 
Watts  (Pa.)404  Mateer  v.  Hissim,  3 
P.  &  W.  (Pa.)  160  ;  Burkey  v.  Self,  I 

Sn 1  (Tenn.)  121  ;  Hinde's  Lessee  v. 

Longworth,  11  Wheat.  L99  ;  Bracketl 
v.  Wait.',  4  Vt.  39,  6  Vt.  Ill  ; 
Church  v.  Chapin,  35  Vt.  223  ;  Lerow 
v.  Wihnarth,  9  Allen  (Mass  386 
Laughton  v.  Harden,  68  Me.  208; 
Stevens  v.  Robinson,  72  Me.  381. 

6  Bird   v.  BoMiir,    1    Mo.  701  ;   Wil- 
liams v.  Banks.  11   Md.    198. 

7  Pomeroy   v.  Bailey,   13   N.  11.    118. 
See  24  Am.  Law  Reg.  N.  S.  497. 


438  PRIMA   FACIE   CASES   OF   FRAUD.  §  243 

§  243.  Prima  facie  cases  of  fraud. — Taking  a  deed  for  prop- 
erty in  the  name  of  the  wife,  which  property  was  purchased 
and  paid  for  by  the  husband,  who  was  involved  in  debt  at 
the  time,  was  said  to  make  a  prima  facie  case  of  fraud 
against  creditors.1  In  Purkitt  v.  Polack 2  the  court 
observed :  "  The  control  of  the  property  after  the  alleged 
sale,  the  indebtedness  of  the  grantor  at  the  time,  the 
absence  of  the  grantee  from  the  State,  and  the  failure  on 
the  part  of  the  latter  to  show  any  payment  of  considera- 
tion, were  amply  sufficient  to  raise  a  prima  facie  intend- 
ment of  fraud  in  the  transaction."  In  Reiger  v.  Davis,3 
the  court  remarked  that  when  a  much-embarrassed  debtor 
conveyed  property  of  great  value  to  a  near  relative,  and 
the  transaction  was  secret,  no  one  being  present  to  witness 
it  but  relatives,  it  was  to  be  regarded  as  fraudulent.  In 
Wilcoxen  v.  Morgan4  the  court  said  that  in  addition  to 
the  evidence  of  certain  declarations  made  at  the  time  of  the 
preparation  of  the  conveyance,  "  the  relationship  of 
the  parties  ;  the  fact  that  the  conveyance  was  made  with- 
out the  knowledge  of  the  grantee ;  the  absence  of 
consideration,  and  the  subsequent  long-continued  posses- 
sion and  dominion  cf  the  premises  by  the  grantor, 
sufficiently  manifest  that  the  purpose  of  G.  in  this  con- 
veyance was  to  put  the  estate  beyond  the  reach  of  his 
creditors."  When  it  appeared  that  after  the  conveyance 
the  debtor  had  no  other  property  subject  to  execution, 
that  the  grantee  was  his  brother  and  had  not  means 
sufficient  to  enable  him  to  pay  for  the  property,  that  the 
debtor  remained  in  possession  and  the  grantee  removed 
out  of  the  State,  these,  and  certain  admissions  of  the  cov- 
inous nature  of  the  transfer,  were  considered  sufficient  to 
show  that  the  conveyance  was  made  to  protect  the  prop- 


:  Alston  v.  Rowles,  L3  Fla.  117.  3  67  N.  C.  186. 

17  Cal.  327-332.  «  2  Col.  477,  478. 


§  244  COMMENTS.  439 

erty  from  creditors.1  In  Danby  v.  Sharp  8  it  is -said  that 
a  sale  of  an  entire  stock-in-trade  to  a  clerk  in  the  employ- 
ment of  the  vendor  is  colorable  and  fraudulent  as  to  the 
creditors  of  the  vendor,  when  the  vendee  has  no  means 
except  that  he  receives  ten  dollars  a  week  for  his  services, 
and  where  he  pays  nothing  at  the  time  of  the  sale,  but 
gives  his  unsecured  promissory  notes  for  the  whole 
amount  of  the  purchase-money,  and  no  public  notice  is 
given  of  the  change,  but  the  business  sign  remains  the 
same,  and  the  vendor  is  frequently  about  the  premises. 
In  Moore  v.  Roe3  the  court  held  that  the  transfer  of  all 
a  debtor's  property  pending  a  suit  against  him  ;  the  taking 
of  an  absolute  deed  as  security  for  money  owing  by  the 
debtor,  and  looseness  or  incorrectness  in  stating  the  con- 
sideration of  the  conveyance,  or  in  determining  the  value 
of  the  property  conveyed,  were  indications  of  fraud. 

The  further  multiplication  of  these  illustrations  is  a 
work  of  doubtful  utility.  Indeed  the  resources  of  fraud- 
ulent debtors  are  too  great,  the  color  and  variety  of  the 
devices  to  elude  creditors  too  numerous,  to  render  classi- 
fication of  the  different  schemes  by  attempted  recitals  of 
details  practicable.  It  is  to  be  noticed  that  the  illustra- 
tions last  given  combine  different  badges  of  fraud,  and  it 
is  very  common  in  creditors'  suits  to  find  many  of  these 
indicia  existing  in  a  single  case. 

§  244.  Comments.  —  Frequent  comment  is  made  upon  the 
extreme  difficulty  of  the  task  of  defining  and  establishing 
fraud,  and  it  seems  to  be  regarded  as  impossible  to 
formulate  exact  rules  as  to  what  is  and  what  is  not  fraud. 
"  To  do  so  would  be  to  give  to  persons  fraudulently 
inclined  the  power  of  evading  the  jurisdiction  of  the  courts 
by  fresh  contrivances  which  might  be  invented  to  elude 

'McDonald    v.    Farrell,    60    Iowa  *2  MacAr.  (D.  C.)  435. 

337,  14  N.  W.  Rep.  318.  3  35  N.  J.  Eq.  90. 


44<->  '  '  "MMENTS.  §  244 

any  invariable,  inflexible  rule."  '  "  As  to  relief  against 
frauds,"  says  Hardwicke,  "  no  invariable  rules  can  be 
established.  Fraud  is  infinite,  and  were  a  court  of  equity 
once  to  lay  down  rules  how  far  the)  would  go,  and  no 
further,  in  extending  their  relief  against  it,  or  to  define 
strictly  the  species  or  evidence  of  it,  the  jurisdiction 
would  be  cramped  and  perpetually  eluded  by  new  schemes, 
which  the  fertility  of  man's  invention  would  contrive." 
Vice-Chancellor  Kindersley  expressed  the  modern  doc- 
trine in  these  terms  :  "  It  was  at  one  time  attempted  to 
lay  down  rules  that  particular  things  were  indelible  badges 
of  fraud,  but  in  truth,  every  case  must  stand  upon  its  own 
footing,  and  the  court  or  the  jury  must  consider  whether, 
having  regard  to  all  the  circumstances,  the  transaction 
was  a  fair  one,  and  intended  to  pass  the  property  for  a 
good  and  valuable  consideration."2  In  Jones  v.  Nev- 
ers,3  Allen,  C.  J.,  said  :  "  Every  case  must  stand  on  its 
own  footing."  But  this  leads  to  unsatisfactory  and  uncer- 
tain results.  The  profession  are  not  given  sufficient 
fixed  rules  with  which  to  guide  their  actions,  or  advise 
clients,  and  must  resort  to  the  wilderness  of  single 
instances  and  complicated  facts  contained  in  the  reports 
to  discover  analogous  cases.  The  courts  protest  that  it 
is  not  permissible  to  guess  at  the  truth  in  the  pursuit  and 
attempted  discovery  of  fraud  ;  that  fraud  must  be  proved 
and  not  presumed,  and  that  speculative  inferences  are 
not  the  proper  foundation  of  a  legal  judgment.4  Yet  the 
most  casual  reading  of  many  reported  decisions  will 
demonstrate  that  transfers  of  property  have  been  avoided, 
especially  in  equity,  upon  the  most  shadowy  and  intangi- 
ble grounds,  and  that  in   many  instances   innocent   pur- 


M.iv  -    Fraudulenl     Conveyances,         •'Hale    v.    Metropolitan     Omnibus 
l»    80;    Parke'a   Hiatorj   of  Courl  of     Co.,  28  L.  J.  Ch.  777. 
Chancer;    p  508      8e<    §18  and  note.         3  18  New  Brunsw.  629. 

J  See  §§  5,  6. 


§  244  <  OMMENTS.  44  l 

chasers  have  been  the  victims  of  unfortunate  circum- 
stances. That,  on  the  other  hand,  fraudulent  alienees 
have  constantly  escaped  the  meshes  of  the  law,  and 
secured  their  ill-gotten  gains,  though  the  defrauded 
creditors,  and  in  some  cases  the  courts,  were  inwardly 
conscious  of  the  fraud  which  both  were  powerless  to 
establish,  is  a  matter  of  common  experience.  The 
impulse  "  to  color  more  strongly  the  constructive  indica- 
tions of  fraud,  for  the  protection  of  valuable  rights,"  is  to 
be  encouraged.  The  degrees  of  weight  to  be  attached  to 
particular  classes  of  indicia  should  be  carefully  considered, 
for,  in  the  present  aspect  of  the  law,  the  marks  of  fraud 
which  assume  such  prominence  in  this  class  of  litigation 
often,  like  a  two-edged  sword,  injure  both  creditors  and 
bona  fide  alienees. 


CHAPTER  XVII. 


CHANGE  OF  POSSESSION  —  DELIVERY. 


Change  of  possession  must  be 
continuous. 

Temporary  resumption  of  pos- 
session. 

Concurrent  possession  insuffi- 
cient. 

Possession  of  bailee. 

No  delivery  where  purchaser 
has  possession. 

When  technical  delivery  is  not 
essential. 

Excusing  want  of  change  of 
possession. 

Change  of  possession  of  realty. 

Change  of  possession  on  judicial 
sale. 

Delivery  of  growing  crops. 

Possession  with  power  of  sale. 

'  '  By  the  possession  of  a  thing  we  always  conceive  the  condition  in  which  not  only  one's  own 
dealing  with  the  thing  is  physically  possible,  but  every  other  person's  dealing  with  it  is  capable 
of  being  excluded." — Von  Savigny's  Treatise  on  Possession,  translated  by  Sir  Erskine  Perry, 
p.  2. 

§245.  Concerning  possession.—  Possession,  or  "  the  own- 
ing or  having  a  thing  in  one's  own  power,"  !  with  the  right 
to  deal  with  it  at  pleasure,  to  the  exclusion  of  others,2  is 
said  to  be  a  degree  of  title,  although  the  lowest.3  The 
effect  of  a  failure  to  change  possession,  more  especially 
as  relating  to  sales  of  personalty,  will  be  found  upon 
investigation  to  occupy  a  very  prominent  place  in  the  law 
regulating  fraudulent  conveyances.  Indeed  some  of  the 
writers  seem  to  lose  sight  of  the  other  characteristics  of 


§245. 

Concerning  possession. 

§257. 

246. 

Change  of  possession. 

247. 

Possession  as  proof  of  fraud. 

258. 

248. 

Transfers      presumptively      or 

prima  facie  fraudulent. 

259. 

249. 

The  New  England  cases. 

250. 

Rule  in  New  York  and  various 

260. 

other  States. 

261. 

251. 

Fraudulent  per    se   or  conclu- 

sive. 

262. 

252. 

Practical  results  of  the  conflict- 

ing policies. 

263. 

253. 

Actual  change  of  possession  re- 

quired. 

264. 

254. 

Question  for  the  jury. 

265. 

255. 

Overcoming  the  presumption. 

256. 

Possession  within  a  reasonable 

266. 

time. 

267. 

1  Brow  i)   v.  Yolkening,  64  N.  Y.  80. 

Compare  Pope  v.  Allen,  90  N.  Y.  298. 

••  Sullivan  v.   Sullivan,  66   N.  Y.  41. 


3  Swift  v.  Agnes,  33  Wis.  240  ;  Raw- 
ley  v.  Brown,  71  N.  Y.  85  ;  Mooney  v. 
Olsen,  21  Kan.  691. 


§  245  CONCERNING    POSSESSION.  443 

Twyne's  Case,1  and  mistakenly  treat  the  question  of  the 
failure  to  change  possession  of  the  property  as  not  only 
the  controlling  but  the  exclusive  feature  of  the  case.  In 
Twyne's  Case3  the  court  said  :  "  The  donor  continued  in 
possession  and  used  the  goods  as  his  own,  and  by  reason 
thereof  he  traded  and  trafficked  with  others,  and 
defrauded  and  deceived  them."3  Hence  Coke,  in  com- 
menting upon  this  case,  gives  the  following  advice  to  a 
donee  :  "  Immediately  after  the  gift  take  possession  of 
the  goods,  for  continuance  of  possession  in  the  donor  is 
a  sign  of  trust."  It  will  be  at  once  manifest  from  this 
statement  that  the  modern  law  upon  the  subject  must 
have  undergone  a  very  material  change  since  Coke  wrote, 
for  the  failure  to  consummate  the  sale  or  gift  by  change 
of  possession  was  then  considered  to  be  merely  a  mark, 
sign,  or  badge  of  fraud.4  We  cannot  but  regard  this 
feature  of  the  law  as  occupying  too  prominent  a  place, 
and  as  receiving  too  great  attention  as  applied  to  trans- 
actions which  it  is  sought  to  annul  as  fraudulent  under 
the  statute  of  Elizabeth.5  The  theory  is  that  a  sale  or 
gift,  unaccompanied  by  possession,  is  not  apparent  to  third 
parties,  but,  on  the  contrary,  is  contradicted  by  the  con- 
tinued visible  possession  of  the  vendor.     Yet,  in  the  case 


1  See  §  22.  deceive  and  to  defraud  creditors  and 

8  3  Rep.  80,  81«  ;  Davis  v.  Schwartz,  purchasers  ;  and  the  law  always  pre- 

155  U.  S.  639,  15  S.  C.  Rep.  237.  sumes,  even  in  criminal  matters,  that 

3  See  Putnam   v.   Osgood,  52  N.  H.  a  person  intends  whatever  is  the  natu- 

156  :  Wright  v.  McCormick,  67  Mo.  ral  and  probable  consequence  of  his 
430  ;  Barr  v.  Reitz,  53  Pa.  St.  256;  own  actions."  Uriswold  v.  Sheldon,  4 
Manton  v.  Moore,  7  T.  R.  72 ;  also  N.  Y.  593.  For  exceptions  to  the  gen- 
Twyne's  Case,  1  Smith's  Lea.  Cas.  1  ;  eral  rule  see  Bissell  v.  Hopkins,  SCow. 
"  Sales  and  Conveyances  without  De-  (N.  Y.)  166,  in  notis. 

livery  of  Possession,"    18  Am.    Law  5  In  Davis  v.  Turner,  4  Gratt.  (Va.) 

Reg.  (N.  S.)137.     See  §  22.  441,  the  court  observed  :  "Thetruth 

4  "  The  statute  does  not  introduce  a  is,  there  is  something  rather  loose  and 
new  rule,  nor  does  it  make  a  forced  indefinite  in  the  idea  of  a  delusive 
or  unnatural  presumption.  The  direct  credit  gained  by  the  possessii  m  1  »f  per 
tendency   of  a  conveyance  of  goods  sonal  property." 

without  a  change  of  possession  is  to 


444  CONCERNING    POSSESSION.  £-45 

of  bailments  in  their  many  forms,  the  possession  is  held 
by  parties  who  are  not  the  owners,  but  this  feature  of  the 
relationship  is  not  regarded  as  giving  rise  to  any  pre- 
sumption of  fraud.  Any  one  can  safely  put  his  personal 
property  in  another's  possession,  or  give  another  the  use 
of  it  without  imperilling  his  title.1  It  is  said  that  "  the 
possession  of  property  never  owned  by  the  possessor 
raises  no  .  ...  presumption "  of  ownership.2  This 
surely  is  an  unsatisfactory  explanation  of  the  distinction. 
The  acts  of  ownership  exercised  over  property  by  a  bailee 
and  by  an  owner,  either  before  or  after  sale,  are  not 
necessarily  dissimilar.  Inquiry  in  either  case  would  gen- 
erally be  necessary  to  ascertain  the  status  of  the  title. 
The  exercise  of  these  very  acts  of  ownership  constitute 
the  mischief  sought  to  be  obviated  by  the  rule  calling  for 
change  of  possession.  Chattels  are  not  negotiable. 
Possession  is  not,  as  in  the  case  of  mercantile  paper  and 
money,  an  assurance  of  title,  or  of  authority  or  power  of 
disposition.  "The  servant,"  said  Woodruff,  J.,  "intrusted 
with  the  possession  of  his  master's  property,  does  not 
thereby  get  authority  to  sell  it,  or  to  authorize  another 
to  sell  it.  The  borrower  of  a  chattel,  or  the  ordinary 
bailee,  does  not,  by  his  possession,  gain  any  such  power."  : 
A  man  cannot  be  deprived  of  his  property  without  his 
consent. 


1  Capron    v.    Porter,    43  Conn.   389  gaged,  and  yet  of  which  lie  retained 

Dillon,  J.,  observes,  that   "  the  rule,  the  possession,  enjoyment  and  appar- 

deducing  fraud  as  a  conclusion  of  law  ent    ownership.    The    statute  of    13 

from  the  simple  retention  of  pusses-  Elizabeth  did  not  declare  that  such 

siuii    by    th«-   vendor   or    mortgagor,  retention  would  he  fraudulent.    This 

originated  in  England  in  a  very  early  was    ;i     doctrine    of    the    courts." 

day,    when    there    were    no   registry  Hughes  v.   Cory,  20   Iowa  402.     See 

laws,  or  none  requiring  such   instru-  Bullock  v.  Williams,  H>  Tick.  (Mass.) 

tnente     to    be    registered.     It     was  33. 

founded    upon    public    policy.     That  'Capron  v.   Porter,  43  Conn.    389. 

policj  was  to  prevent  a   part}  from  See  Davis  v.  Bigler,  62  Pa.  St.  242. 

acquiring  a  false  and  deceptive  credit  BSpraighte   v.    Hawley,   39  N.   Y. 

"ii  the  strength  of  the  possession  of  446. 
property  which  he  had  Bold  <n  mort- 


§246  CHANCE    OF    POSSESSION.  445 

Surely  it  is  obvious  that  to  prohibit  altogether  the  sepa- 
ration of  the  title  from  the  possession  of  personal  property 
would  be  incompatible  with  an  advanced  state  of  society 
and  commerce,  and  productive  of  great  inconvenience  and 
injustice  in  the  pursuits  and  business  of  life.1  It  would 
be  "  a  remedy  worse  than  the  disease." 

§246.  Change  of  possession.  — It  is  believed  that  the  rule 
of  the  common  law  had  its  foundation  in  the  doctrine 
already  noticed,  that  possession  of  personal  property  is 
prima  facie  evidence  of  ownership.2  To  allow  the  owner 
of  such  property  to  transfer  the  title  by  a  secret  convey- 
ance, while  retaining  the  possession  and  assuming  to  act 
as  the  owner,  was  regarded  as  permitting  a  fraud  upon 
all  persons  who  should  deal  with  him  upon  the  faith  of 
his  ownership.3  As  we  have  said,  the  theory  was  that 
his  possession  and  apparent  ownership  gave  him  credit, 
and  afforded  him  the  means  of  defrauding  others.4  An 
agreement  to  let  a  vendor  retain  the  possession  and  use 
of  the  property  after  an  absolute  sale  is  not  considered  to 
be  a  common  and  ordinary  transaction  in  the  usual  course 
of  business.  Such  an  arrangement,  it  is  urged,  excites 
suspicion,  and  it  is  regarded  in  many  of  the  cases  as  the 
bounden  duty  of  the  courts,  for  the  safety  and  protection 
of  creditors,  to  call  upon  and  hold  the  vendee  in  all  such 

1  Davis  v.  Turner,  4  Gratt.  (Va.)  Justice  Kent  said,  in  Sturtevant  v. 
441.  Ballard,  9  Johns.    (N.  Y.)  337,   339  : 

2  Wallace  v.  Nodine,  57  Hun  (N.  "  Delivery  of  possession  is  so  much  of 
Y.)  239,  10  N.  Y.  Supp.  919.  the  essence   of   the   sale   of    chattels 

3  Roe  v.  Meding,  53  N.  J.  Eq.  350,  that  an  agreement  to  permit  the  ven- 
33  Atl.  Rep.  394.  dor  to  keep  possession  is  an  extraordi- 

4  See  Crooks  v.  Stuart,  2  McCrary,  nary  exception  to  the  usual  course  of 
15.  "  The  controlling  argument ....  is  dealing,  and  requires  a  satisfactory 
the  danger  of  false  credit  and  fraudu-  explanation."  Again  it  is  observed: 
lent  evasion  of  debt  whenever  delivery  "Retention  of  possession  not  only 
and  change  of  possession  do  not  ac-  tends  to  give  false  credit  to  the  seller, 
company  and  follow  change  of  prop-  but  it  is  a  sign  of  a  secret  trusl  in  his 
erty  whether  absolute  or  qualified,"  favor."  Brawn  v.  Keller,  43  Pa  St. 
per   Verplanck,    Senator,    in   Cole  v.  106. 

White,  26  Wend.  (N.  Y.)  523.     Chief- 


446 


CHANGE    OF   POSSESSION. 


246 


cases,  to  explain  clearly  and  satisfactorily  how  an  abso- 
lute sale  could  have  been  bona  fide,  and  yet  the  vendor 
retain  the  use  and  possession.1  The  change  of  which  we 
are  speaking  must  be  open  and  visible,  and  apparent  by 
the  changed  appearance  of  the  property  or  of  its  cus- 
tody.- In  these  controversies  regard  must  be  had  as  to 
the  character  of  the  property,  the  nature  of  the  trans- 
action, the  position  of  the  parties,  and  the  intended  use  of 
the  property.3 

Such  is  the  general  condition  of  the  law  relating  to 
this  branch  of  the  subject,  whatever  may  be  the  force  of 
the  criticisms  suggested.  The  subject,  by  reason  of  its 
prominence,  calls  for  consideration,  and  for  some  discus- 
sion of  the  many  exceptions,  real  and  apparent,  to  the 
general  rule,  arising  from  the  necessities  incident  to  par- 
ticular cases  and  from  other  causes.4 


1  Coburn  v.  Pickering,  3  N.  H.  427. 
It  must  be  remembered  tbat,  by  the 
common  law,  delivery  was  not  consid- 
ered necessary  upon  a  sale  of  chattels 
to  vest  the  title  in  the  vendee  (Miller 
ads.  Pancoast,  39  X.  J.  Law  253  ;  Fra- 
zier  v.  Fredericks,  24  N.  J.  Law  169  ; 
Meeker  v.  Wilson,  1  Gall.  424;  Mon- 
roe v.  Hussey.  1  Oreg.  190  :  Davis  v. 
Turner,  4  Gratt.  [  Va.]  426),  as  between 
the  parties.  Philbrook  v.  Eaton,  134 
Mass.  398,400;  Parsons  v.  Dickinson, 
11  Pick.  (Mass.)  858:  Packard  v.  Wood, 
)  Gray  (Mass.)  307. 

•  Shauer  v.  Alterton,  L51  U.  S.  623, 
use.  Rep.  442. 

iwford  v.  Davis,  99  Pa.  St.  576; 
Renninger  v,  Spat/.,  12s  pa.  St.  526, 
18  \tl.  Rep.  10:, ;  Garretson  v.  Back- 
enberg,  144  Pa.  St.  113.  22  A 1 1  Rep. 
The  possession  which  will  be 
equivalent  to  actual  notice  to  a  subse- 
quent purchaser,  must  be  an  open  and 
risible  occupation.  Holland  v.  Brown, 
1  in  N.  V   848.35  N.  E.  Rep.  577. 

1  Mr.     May     -a\  -    in    his    1  reatise   "ii 


Fraudulent  Conveyances.  2d  ed.,  p. 
118  :  "It  by  no  means  follows,  though, 
that  because  there  is  no  possession 
given  therefore  a  transfer  is  fraudu- 
lent ;  for  those  cases  where  the  judges 
have  said  that  if  possession  was  not 
given  it  was  fraudulent  (Edwards 
v.  Harben,  2  T.  R  587 :  Wordall  v. 
Smith,  1  Camph.  332;  Macdona  v. 
Swiney,  8  Ir.  C.  L.  R.  86)  must  be 
taken  with  reference  to  the  circum- 
stances of  each  case.  The  question 
of  possession  is  one  of  much  import- 
ance, but  that  is  with  a  view  to  ascer- 
tain the  good  or  bad  faith  of  the 
transaction  (Abbott,  C.  J.,  in  Latimer 
v.  Batson,  4  B.  &  C.  652;  and  see 
Wundell  v.  Phipps,  10  Yes.  139  ;  Kidd 
v.  Rawlinson,  2  Ii.  &  P.  .19;  Hoffman 
v.  Pitt,  5  Esp.  22.  25  ;  Eastwood  v. 
Brown,  Ry.  &  Mood.  312).  In  Arun- 
del! v.  Phipps  (10  Yes.  139,  145),  Lord 
Eldon  said  that  the  mere  circum- 
stance   of    tlie    possession    of   chattels. 

however  familiar  it  might   !»•  to  say 
that   it    proves  fraud,  amounts  to  no 


§247  POSSESSION    AS    PROOF   OF    FRAUD.  447 

§  247.  Possession  as  proof  of  fraud. —  As  we  shall  pres- 
ently show,  it  is  commonly  stated  in  some  of  the  reported 
cases  that  the  continued  possession  of  the  subject-matter 
of  the  sale  by  the  grantor  or  vendor  is  prima  facie  evi- 
dence of  fraud,  while  other  authorities  regard  it  as  con- 
clusive proof  that  the  transaction  is  covinous.  A  learned 
writer1  has  declared  this  to  be  a  loose  method  of  refer- 
ring to  the  matter,  and  has  ventured  to  assert  that  "  a 
careful  examination  of  this  branch  of  the  law  will  show  that 
neither  of  the  views  so  expressed  is  correct."  The  argu- 
ment advanced  by  the  writer  is  that  bald  possession  is  not 
conclusive  evidence  of  fraud  ;  it  is  only  a  circumstance 
admissible  in  evidence  with  other  circumstances  as  bear- 
ing upon  the  question  of  the  actual  existence  of  fraud. 
The  conclusion  drawn  in  the  article  mentioned  is  that 
"  possession  is  a  link  in  a  chain  of  circumstances,  perti- 
nent in  proving  fraud,  having  greater  or  less  weight 
according  to  the  circumstances  of  each  case,"  and  "  is  not 
necessarily  either  conclusive  or  prima  facie  evidence  of 
fraud."  Some  accompanying  circumstances  attending  the 
possession  or,  so  to  speak,  coloring  it,  must  be  shown  to 
establish  fraud. 

The  statutory  policy  introduced  in  a  number  of  the 
States,  under  which  a  failure  to  effect  a  change  of  pos- 
session   is    made    either    presumptively    or    conclusively 

more  than  that  it  is  prima  facie  evi-  and  disposition  of  a  bankrupt).  There 
dence  of  property  in  the  man  possess-  is  no  sufficient  authority  for  Baying 
ing,  until  a  title  not  fraudulent  is  that  the  want  of  delivery  of  posses- 
shown  under  which  that  possession  sion  makes  void  a  bill  of  sale  of  goods 
has  followed  ;  that  every  case,  from  and  chattels  ;  it  is  prima  facie  evi- 
Twyne's  Case  (3  Rep.  80  b;  see  the  dence  of  a  fraudulent  intention,  and 
remarks  of  Littledale,  J.,  in  Martin-  if  it  be  a  badge  of  fraud  only,  in  order 
dale  v.  Booth,  3  B.  &  Ad.  498,  505)  to  ascertain  whether  a  deed  be  fraudu- 
downwards,  supports  that,  and  there  lent  or  not,  all  the  circumstances  musl 
was  no  occasion  otherwise  for  the  be  taken  into  consideration.  (Per 
statute  of  King  James  (21  Jac.  1  C.  Patteson,  J.,  in  Martindala  v.  Booth, 
19,  §g  10,  11,  which  originated  the  3  B.  &  Ad.  498,  587.)" 
law  with  respect  to  property  remain-  '  Possession  as  Evidence  of  Fraud, 
ing  in  the  reputed  ownership  or  order  11  Cent.  L.  J.  21. 


448  FRAUDULENT   TRANSFERS.  §  248 

fraudulent,  has  robbed  the.  question  of  much  of  its  import- 
ance as  a  general  proposition  independent  of  local  enact- 
ment. We  cannot  but  regard  the  theory  advanced  by 
the  writer  referred  to  as  sound,  but  we  fail  to  discover  that 
the  cases  are  in  line  with  his  arguments. 

§  248.  Transfers  presumptively  or  prima  facie  fraudulent. — 
The  question  of  how  far  retention  of  possession  of  the 
property  by  the  vendor  is  to  be  considered  as  evidence  of 
fraud  in  its  sale  has  been  a  subject  of  much  consideration 
by  the  courts  and  in  legislative  bodies  in  the  United 
States.1  In  some  States  the  matter  is  regulated  by 
statute,  but  the  statutes  and  the  rules  for  their  interpre- 
tation vary  in  the  different  States.  In  other  States  the 
question  is  left  to  be  disposed  of  by  the  rules 
and  principles  which  obtain  at  common  law  The  gen- 
eral subject  is  capable  of  extended  discussion,  both 
because  of  its  importance  and  for  the  reason  that  the 
authorities  relating  to  it  are  full  of  subtle  distinctions. 
We  can  only  consider  its  general  outlines  and  notice  the 
leading  cases  and  the  important  exceptions  to  the  general 
rule  in  the  principal  States.  The  main  struggle  is 
between  two  policies  and  rules  of  evidence  or  proof,  viz.: 
whether  the  neglect  to  change  possession  of  the  property 
shall  be  considered  presumptively  or  conclusively  fraudu- 
lent as  to  creditors.  The  prevalent  policy  is  to  consider 
the  absence  of  a  change  of  possession  as  prima  facie  or 
presumptive  evidence  of  fraud.a 


ii  must  i"-  remembered  thai  "the  (N.    ?.)    156;   Beals    v.   Guernsey,  8 

statute  with  its  presumptions  founded  Johns.  (N.  T.)  446  ;  Barrow  v,  Paxton, 

11 1 »« » 1 n-delivery   and    absence    of  5  Johns.  (N.  Y.)  258 ;  Curtin  v.  Isaac- 

rhanged  possession  draws  no  distinc-  sen,  36  W.  Va.  891,  15  S.  E.  Rep.  171  ; 

tion    between    modes    of    transfer."  Bartletl    v.   Cleavenger,   85   \Y.    Va. 

Stimson  v.  Wrigley,  86  N.  Y.  387.  71!),   MS.    E.   Rep.  373.     [n  Bissell  v. 

•See  Crawford    v.  Kirksey,  55  Ala.  Hopkins,   :*  Cow.   (N.    Y)    L66,     188, 

800;    Mayer   v.   Clark,   40    Ala.   259;  Savage,   Chief   .lustier.    s:ii.l  :    "The 

Vredenbergh  v.  White,  1  Johns.  Cas.  possession  by  the  vendor  of  personal 


§  249 


THE    NEW    ENGLAND    CASES. 


I  \9 


£  249.  The  New  England  cases.—  The  cases  supporting 
the  former  theory  will  be  first  noticed,  giving  brief  ((no- 
tations from  leading  authorities.  In  Massachusetts, 
"possession  of  the  vendor  is  only  evidence  of  fraud, 
which,  with  the  manner  of  the  occupation,  the  conduct  of 
the  parties,  and  all  other  evidence  bearing  upon  the  ques- 
tion of  fraud,  is  for  the  consideration  of  the  jury. "  '  In 
New  Hampshire  it  is  said  that  "  in  cases  of  absolute  sales, 
possession  and  use  by  the  vendor,  after  the  sale,  is  always 
prima  facie,  and,  if  unexplained,  conclusive  evidence  of  a 
secret  trust."2  So  in  Maine  failure  to  change  possession 
is  presumptive  evidence  of  fraud,  and  the  jury  are  to 
determine   the  good  faith  of  the  transaction.3     In   Roth- 


chattels  after  the  sale  is  not  conclu- 
sive evidence  of  fraud.  The  vendee 
may,  notwithstanding,  upon  proof 
that  the  sale  was  bona  fide  and  for  a 
valuable  consideration,  and  that  the 
possession  of  the  vendor  after  such 
sale  was  in  pursuance  of  some  agree- 
ment not  inconsistent  with  honesty  in 
the  transaction,  hold  under  his  pur- 
chase against  creditors."  See  Davis 
v.  Turner,  4  Gratt.  (Va.)  422,  where 
the  doctrine  of  fraud  per  se  is  exam- 
ined and  repudiated.  See  Forkner  v. 
Stuart,  6  Gratt.  (Va.)197;  Howard  v. 
Prince,  1 1  N.  B.  R.  322. 

1  Ingalls  v.  Herrick,  108  Mass.  354 ; 
Shurtleff  v.  Willard,  19  Pick.  (Mass.) 
202  ;  Brooks  v.  Powers,  15  Mass.  244  ; 
Hardy  v.  Potter,  10  Gray  (Mass. )  89  : 
In  Dempsey  v.  Gardner,  127  Mass. 
381,  Gray,  C.  J.,  said:  "By  the  law 
as  established  in  this  commonwealth, 
it  was  necessary,  as  against  subse- 
quent purchasers  or  attaching  cred- 
itors, that  there  should  be  a  delivery 
of  the  property.  No  such  delivery, 
actual  or  symbolical,  was  proved. 
The  buyer  did  no  act  by  way  of  tak- 
ing possession  or  exercising  owner- 
ship, and  the  seller  did  not  agree  fco 
29 


hold  or  keep  the  horse  for  him 

There  was  no  evidence  of  delivery  for 
the  consideration  of  the  jury,  excepl 
such  as  might  be  implied  from  tin- 
execution  and  delivery  of  the  bill  of 
sale.  That  was  not  enough.  Carter 
v.  Willard.  19  Pick.  (Mass.)  I  ; 
Shumway  v.  Rutter,  7  Pick.  (Mass.) 
56,  58,  8  Pick.  (Mass.)  443.  147; 
Packard  v.  Wood,  4  Gray  (Mass. )  307  ; 
Rourke  v.  Bullens,  8  Gray  (Mass.) 
549  ;  Veazie  v.  Somerby,  5  Allen 
(Mass.)  280,  289;  Ashcrofl  v.  Sim- 
mons, 163  Mass.  437,  40  N.  E.  Rep. 
171." 

2  Coburn  v.  Pickering,  3  N.  H.  428  ; 
Doucet  v.  Richardson  1 X  II.  1892) 
29  Atl.  Rep.  635.  See  Lang  v.  Stock- 
well,  55  N.  H.  561  ;  Cutting  v.  Jack- 
son, 56  N.  H.  253;  Sumner  \  Dal  tun, 
58  N.  H.  295;  Stowe  v.  Tall,  58  N. 
H.  445;  Shaw  v.  Thompson,  43  V  II. 
130  ;  Harrell  v.  Godwin,  102  N.  (  .  330, 
8  S.  E.  Rep.  925;Rawson  Mfg.  Co. 
v.  Richards,  69  Wis.  643,  35  N.  W. 
Rep.  40. 

8  Shaw    v.    Wilshire,    65    Me    485; 
Bartlett  \.    Blake,  37   Me.    [24  .    Fair 
field  Bridge  Co.  v.   Nye,   60  M< 
( roogins  v.  » lilmore,    IT  Me.  9  ;  Reed 


450 


i;i    |]     in    NEW    YORK    AND    OTHER   STATES. 


§  ?5o 


child  v.  Rowe  '  the  Supreme  Court  of  Vermont  said  : 
"  The  law  is  well  settled  in  this  State  that  there  must  be 
a  substantial  and  visible  change  of  possession  to  protect 
property  from  attachment  by  the  creditors  of  the  vendor. 
.  .  .  .  The  vendee  must  acquire  the  open,  notorious  and 
exclusive  possession  of  the  property,  and  this  implies  that 
the  vendor  is  divested  of  the  use,  possession,  or  employ- 
ment of  the  property."2  The  rule  that  non-delivery  of 
possession  is  prima  facie  evidence  of  fraud  obtains  in 
Rhode  Island.3 

S  250.  Rule  in  New  York  and  various  other  States.  —  After 
much  fluctuation  and  discussion,  the  general  rule  is  now 
established  by  statute  in  New  York,  that  the  retention  of 
possession  by  the  vendor  is  presumptively  fraudulent. 
This  presumption  may  be  overcome  by  proof  satisfactory 
to  a  jury  that  the  retention  of  possession  was  in  good 
faith,  for  an  honest  purpose,  and  with  no  design  to 
defraud  creditors.1       In   other    words,    evidence    may    be 


v.  Reed,  To  Me.  506.  In  the  latter 
tin-  omrt  says  :  "Without  de- 
livery  the  title  does  doI  pas-  as 
against  an  attaching  creditor.'1  Rob- 
.  n-  v  Bawn,  20  <  '"I.  77,  36  Pac.  Rep. 
Barkness  v.  Russell,  118  U  S 
663,  7S.  C  Rep.  51  ;  cf.,  Stephens  v. 
Gifford,  137  Pa  St.  319,  20  Atl.  Rep. 
542. 

11  Vt.  389, 

1  Sompare   Kendall  v.   Samson.   12 
Vt.   515;    Ridoul    v.    Burton,    27    Vt 
Jewetl    v.  Guyer,   38    VI     209; 
Fish  v.  Clifford.  .->l  Vt.  34  I  ;  Weeksv. 
Preucott.  58  VI 

Sarle    v.    Arnold,    7   R.    I.    582  ; 

Head  v    Gardiner,  1:;  R.   I.  257.     See 

[with  v    Burrough,    L3   R.  I   294  ; 

1.  II   v    Fairbrother,   L2   R.    I    '.':;:{ 

\-    to   tin-    rule   in  Connecticul 

.'  251 

1    v.    Loomis,     29    N     Y    U2 ; 


Blaul  v.  Gabler,  77  X.  Y.  461  :  Stark 
v.  Grant, 42  X.  Y.  St.  Rep.  36,  16  N.  Y 
Supp.  526  ;  Parmenter  v.  Pitzpatrick, 
60  Hun  (N.  Y.)  580,  11  N.  Y.  Supp. 
71s:  Wallace  v.  Nodine,  57  linn 
(N.  Y.)  250,  10  N.  Y.  Supp.  919; 
Siedenbach  v\  Riley,  ill  N.  Y.  .")60, 
20  X.  Y.  St.  Rep.  124,  L9  N.  E  Rep. 
275  ;  Preston  v.  Southwick,  115  X.  V. 
139,  21  X.  E.  Rep.  1031;  PrentissToolA 
Supply  Co.  v.  Schirmer,  136  X.  Y.  305, 
32  N.  E.  Rep.  849.  The  facl  thai  a 
valuable  consideration  was  paid  does 
m»t  shift  the  burden  <>('  proof.  Wal- 
lace v.  Nodine,  57  Hun  (N.  Y.  1  239, 
in  N.  Y.  Supp.  919;  Miller  v.  Lock- 
wood,  32  N.  Y.  293 ;  Ford  v.  Wil- 
liam-. 24  X.  Y.  359;  Hollacher  v. 
I  '  Brien,  5  Bun  (N.  Y.)  277  ;  Burn- 
ham  \.  Brennan,  71  N.  Y.  V)7 ; 
Thompson  v.  Blanchard,  I  X.  V.  303  ; 
Mumper  v.  Rushmore,  79  X.  Y.  1«J. 


§250 


RULE    TN    NEW    VdkK    A.ND    OTHER    S'l  V.TES. 


I-Si 


given  to  repel  the  arbitrary  inference  of  fraud  resulting 
from  the  neglect  to  change  possession.1  If  good  faith  is 
established,  it  is  not  essential  in  that  State  to  show  "a 
good  reason  for  the  want  of  change  of  possession,"8  which 
is  certainly  crowding  the  rule  to  an  extreme  limit  hostile 
to  the  creditor  interests.  The  principle  that  the  possession 
may  be  explained  is  extensively  recognized.  In  addition 
to  the  States  already  named,  it  obtains  in  New  Jersey,3 
Rhode  Island,4  West  Virginia,5  Virginia,6  Alabama,7 
Louisiana,8  Ohio,9  Indiana,10  Michigan,11  Minnesota,1"  Wis- 


1  Stark  v.  Grant,  42  N.  Y.  St.  Rep. 
36,  16  N.  Y.  Supp.  526. 

2  Mitchell  v.  West,  55  N.  Y.  107  ; 
Hanford  v.  Artcher,  4  Hill  (N.  Y.)  271. 

3  Miller  ads.  Pancoast,  29  N.  J. 
Law    253 ;    Sherron    v.    Humphreys, 

14  N.  J.  Law  220.  "  The  possession 
by  the  vendor  of  personal  chattels, 
after  the  sale,  is  not  conclusive  evi- 
dence of  fraud.  The  vendee  may, 
notwithstanding,  upon  proof  that  the 
sale  was  bona  fide  and  for  a  valuable 
consideration,  and  that  the  possession 
of  the  vendor  after  sale  was  in  pur- 
suance of  some  agreement  not  incon- 
sistent with  honesty  in  the  trans- 
action, hold  under  his  purchase 
against  creditors."  Miller  ads.  Pan- 
coast,  29  N.J.  Law  253.  But  see  Roe 
v.  Meding,  53  N.  J.  Eq.  356,  33  Atl. 
Rep.  394,  and  Fletcher  v.  Bonnet,  51 
N.  J.  Eq.  618,  28  Atl.  Rep.  601,  as  to 
the  necessity  for  and  effect  of  filing 
mortgages  on  chattels. 

4  Harris  v.  Chaffee,  17  R.  I.  193,  21 
Atl.  Rep.  104 ;  Mead  v.  Gardiner,  13 
R.  I.  257  ;  Sarle  v.  Arnold,  7  R.  I.  582. 

5  Curtin  v.  Isaacsen,  36  W.  Va.  391, 

15  S.  E.  Rep.  171. 

6  Howard  v.  Prince.  11  N.  B.  I." . 
322  ;  Davis  v.  Turner,  4  Gratt.  (Va.  ) 
423,  a  leading  case  of   international 


repute;  Norris   v.   Lake,  89  Va.  513, 
16  S.  E.  Rep.  663. 

7  Mayer  v.  Clark,  10  Ala,  259; 
Crawford  v.  Kirksey,  55  Ala.  282; 
Moog  v.  Benedicks,  49  Ala.  512  ;  Mc- 
Ghee  v.  Importers'  &  T.  Nat.  I '.aide,  93 
Ala.  192,  9  So.  Rep.  734. 

8  Keller  v.  Blanchard,  19  La.  Ann. 
53;  Guice  v.  Sanders,  21  La,  Ann.  463  ; 
Devonshire  v.  Gauthreaux,  32  La.  Ann. 
1132;  Yale  v.  Bond,  45  La.  Ann.  997, 
13  So.  Rep.  587. 

9  Hombeck  v.  Vanmetre,  9  Ohio 
153  :  Collins  v.  Myers,  16  Ohio  547  : 
Thorne  v.  Bank,  37  Ohio  St.  254. 

111  Kane  v.  Drake.  27  Ind.  29  ;  Rose 
v.  Colter,  76  Ind.  590;  New  Albany 
Ins.  Co.  v.  Wilcoxson,  21  Ind.  355; 
Seavey  v.  Walker,  108  Ind.  78,  9  N.  E. 
Rep.  347. 

11  Molitor  v.  Robinson,  40  Mich.  800, 
perCooley  J.  ;  Kipp  v.  Lamoreaux,  81 
Mich.  304,45  N.  W.  Rep.  1002;  Buhl 
Ironworks  v.  Teuton,  67  Mich.  623, 
35  N.  W.  Rep.  804. 

'•  Blackmail  v.  Wheaton,  L3  Minn. 
326;  Benton  v.  Snyder,  22  Minn.  247; 
Lathrop  v.  Clayton,  15  Minn.  104,  47 
N.  W.  Rep.  544  ;  Mack,  liar  v  Pills- 
bury,  48  Minn.  399,  51  N.  W.  Rep.  222; 
( lamp  v.  Thompson,  25  Minn.  l?">. 


FRAl  I  'i   I  1  NT    PER    SI  .  §  25 1 


consul,1  Nebraska,"  Nevada,'  Arkansas,1  Kansas,"'  South 
Carolina,"  Texas,7  in  the  Federal  tribunals,8  and  the 
District  of  Columbia.9 

S251.  Fraudulent  per  se  or  conclusive.  —  The  cases  just 
considered  give  what  may  be  termed  the  equitable  and 
charitable  view  of  the  question.  But  the  policy  embodied  in 
many  of  these  cases,  and  in  the  statutes  upon  which  they 
are  in  certain  instances  founded,  is  not  considered  in  some 
of  the  States  rigid  or  severe  enough  to  suppress  the  evils 
supposed  to  be  engendered  by  this  class  of  transactions. 
Thus,  in  Connecticut,  Loomis,  J.,  in  delivering  the  opinion 
of  the  court  in  the  case  of  Capron  v.  Porter,10  observed  : 
"That  the  retention  of  the  possession  of  personal  property 
by  the  vendor  after  a  sale  raises  a  presumption  of  fraud 
which  cannot  be  repelled  by  any  evidence  that  the  trans- 
action was  bona  fide  and  for  valuable  consideration,  is 
still  adhered  to  and  enforced  by  the  courts  in  this  State 
with  undiminished  rigor,  as  a  most  important  rule  of  public 
policy.  The  reason  of  the  rule  is  that  as  against  a  person 
who  was  once  the  owner  of  the  property,  and  all  who 
claim  by  purchase  from   him,  the  continued  possession   is 

1  Wheeler    v.   Konst,   46    Wis.   398,  Rep.   835:  Stix  v.  Chaytor,  ■">•'..  Ark. 

1   X.  W.  Rep.  96;    BlakesJee  v.  Ross-  117.  1?  S.  W.  Rep.  707. 

man,  13  Wis.  116;   Osen  v.  Sherman,  Phillips  v.  Reitz,  16  Kan.  396. 

27  Wi-    505;    Manufacturers'    Bk.   v.  « Pregnall    v.  Miller,   21   S.   C.   335. 

Rugee,    59   Wis.  221,18   X.    W.  Rep.  'Traders'    Nat.    Bank   v.   Day.    87 

251;    Norwegian   Plow   ('<>.  v.   Han-  Tex.  in:;,   jus.  W.  Rep.  1019;  Gibson 

thorn,  71  Wis.  529,  37  N.  W.  Rep.  825.  v.    Hill,    21    Tex.    225;    Edwards    v. 

»  Uhl     v.     Kol>is«m,     8     Neb.     272:  Dickson,  66   Tex.  613,   2  S.   W.  Rep. 

Densi •    F.Tomer,  11  Neb.  392,   15  71*. 

N.  W   Rep    731  :  Paxton  v.  Smith,   II  s  Warner  v.   Norton,  20    How.  448. 

Neb.  56,  59  N.  W    Rep.  690.  But   Bee  Hamilton  v.  Russel,  1  Cranch 

Conway  v.  Edwards,  <;  Nev.  190.  310:  Traversv.  Ramsay,  3  Cranch  »'. 

Compare  Doak   v.   Brubaker,  1   Nev.  C.  354,  24  Fed.  Cas.   1 13. 

nini   v.   Kyle,   17   Nev,    209  » Justh  v.  Wilson,  19  Dist.  Col.  529. 

43  I lonn.  383  ;  Gilbert    v.   Decker, 

Norris,  28   \rk.  128.     It  53  Conn.  405,  1   \tl.   Rep.  685 ;    Hueb- 

is  held  in  that  State  thai   a  construe-  ler  v.   Smith.   62   Conn.    191,  25  Atl. 

tive  delivery  i-  sufficient.     Shaul  v.  Rep.    658;    Batetal    v.    Blakeslee,    II 

Harrington,  54   Ark,   805,    15  S.  W.  Conn.  302. 


§  J51  FRAUDULENT    PER    SE.  45  5 

to  be  regarded  as  a  sure  z'ndz'czum  of  continued  ownership, 
and  that  the  possessor  would  obtain  by  such  continued 
possession  a  false  credit  to  the  injury  of  third  persons, 
if  there  was  no  such  rule  to  protect  them." 1  Clow  v. 
Woods2  is  the  leading-  case  in  Pennsylvania.  Gibson,  J., 
said  :  "  Where  possession  has  been  retained  without  any 
stipulation  in  the  conveyance,  the  cases  have  uniformly 
declared  that  to  be,  not  only  evidence  of  fraud,  but  fraud 
per  sc.  Such  a  case  is  not  inconsistent  with  the  most 
perfect  honesty  ;  yet  a  court  will  not  stop  to  inquire 
whether  there  be  actual  fraud  or  not  ;  the  law  will  impute 
it,  at  all  events,  because  it  would  be  dangerous  to  the 
public  to  countenance  such  a  transaction  under  any  cir- 
cumstances. The  parties  will  not  be  suffered  to  unravel 
it  and  show  that  what  seemed  fraudulent  was  not  in  fact 
so."3  In  Born  v.  Shaw,4  the  court  observed:  "When 
possession  is  retained  by  the  vendor,  it  is  not  only 
evidence  of  fraud,  but  fraud  per  se."  In  Maryland5  a  bill 
of  sale  may  be  recorded,  and  the  title  of  the  grantee  is  then 
as  effectually  protected  as  if  the  sale  had  been  accom- 
panied by  delivery.0      It  is  a  well-settled  doctrine  in  Ken- 

1  Compare    Osborne    v.    Tuller,    14  Shaw   v.    Levy,   IT   S.  &  R.  (Pa.)  99 ; 

Conn.   529;  Norton    v.    Doolittle,    32  Born  v.  Shaw,  29  Pa.  St.  288  ;  Young 

Conn.  405  ;  Elmer  v.  Welch,  47  Conn.  v.  McClure,    2    W.    &    S.  (Pa.)    151. 

56;  Hull  v.  Sigsworth,  48  Conn.  258;  "Clow  v.  Woods,  5  S.  &   R.  (Pa.)  275, 

Hatstat   v.   Blakeslee,   41   Conn.  301  ;  decided  by    this  court   inl819,  is  the 

Seymour  v.   O'Keefe,    44  Conn.  128;  magna   charta  of  our  law   upon  this 

Meade  v.   Smith,  16  Conn.  346.     See  subject,"     per     Sharswood,     J.,     in 

especially    Hamilton      v.     Russel,     I  McKibbin   v.  Martin,  64   Pa.  St.    356 

Cranch  310  ;   and  compare  Warner  v.  Stephens  v.  Gifford,    IS7  Pa.    Si    219, 

Norton,  20  How.  448  ;  Gibson  v.  Love,  20   Atl.    Rep.    542.     But  as   to  Bubse- 

4    Fla.    217;    Monroe    v.    Hussey,   1  quent      creditors,    actual     intent     to 

Oregon  188.  defraud    must  be  shown.     Ditman  v. 

J5S.  &R.  (Pa.)  280.  •  Raule,   124  Pa.    St.    225,16  Atl.  Rep 

3  See  Thompson  v.  Paret,  94  Pa.  St.  819. 

275  ;    Pearson   v.    Carter,  94  Pa.  St.  4  29  Pa.  St.  292, 

156;    McKibbin    v.     Martin,    61   Pa.  B  Kreuzer  v.  Cooney,  45  Md.  582, 

St.  352;  Garman   v.    Cooper,    72  Pa.  «  Clary  v.  Prayer.  8  G.  &  J.   (Md.) 

St.  37  ;  Worman  v.  Kramer,  73  Pa.  St.  416.     See  Price  v.  Pitzer,  11  Md.  527. 

378  :  Dawes   v.    Cope,    4   Binn.  (Pa.)  But  see  Smith  v.  Hunter,  5  Cranch  < ! 

258  ;  Davis  v.    Bigler,  62    Pa.  St.  242  ;  C.  467,  22  Fed.  Cas.  574. 


454 


<  ONFL1CTING    POLICIES. 


§252 


tucky  that  where  there  is  an  absolute  sale  of  movable 
property,  the  possession  must  accompany  the  title,  or  the 
sale  will  be  void  in  law  as  to  creditors  or  subsequent  pur- 
chasers, even  though  the  contract  contain  a  stipula- 
tion that  the  vendor  is  to  retain  the  possession  till  a 
future  day.1  After  much  conflict,'  the  rule  seems  to  be 
established  in  Missouri  that  a  sale  without  delivery  of 
possession  is  conclusively  presumed  to  be  fraudulent.8  In 
Illinois  it  is  fraud  per  se  to  leave  the  vendor  in  posses- 
sion.4 Much  the  same  policy  is  pursued  in  Iowa,5  Cali- 
fornia,0 Colorado,7  and  Delaware.8 

§  252.  Practical  results  of  the  conflicting  policies.  —  Brush- 
ing aside  for  the  present  the  objections  already  outlined 
to  the  prominence  accorded    the  question  of  change  of 


Robbins  v.  Oldham,  1  Duv.  (Ky.) 
28  ;  Brummelv.  Stockton,  3  Dana  (Ky.) 
135;  Bradley  v.  Buford,  Sneed 
(Ky.)  12;  Morton  v.  Ragan,  5  Bush 
K\  .  I  334;  cf.  Vanmeter  v.  Estill,  78 
K  j  456.  See  Cummins  v.  Griggs,  2 
DuvalliKv      -: 

8  See  Claflin  v.  Rosenberg,  42  Mo. 
448:  Rocheblave  v.  Potter,  1  Mo.  561; 
Foster  v.  Wallace,  2  Mo.  231;  Siblej  v. 
Bood,  :;  Mo.  290;  King  v.  Bailey,  6 
Mo  575;  Shepherd  v.  Trigg,  7  Mo.  151. 
Claflin  \.  Rosenberg,  4-2  Mo,  448 ; 
Bishop  v.  O'Connell,  56  Mo.  158;  Bur- 
gerl  v.  Borchert,  59  Mo.  80;  Wrighl 
v.  McCormick,  67  Mo.  426.  See  state 
ex  ril.  Baumunk  v.  Goetz,  131  Mo. 
33  s   w.  Rep.  161. 

•Thompson  \.  Seek,  2]  III.  73; 
Ticknor  v.  McClelland,  84  111.  471  ; 
Deering  \  Washburn,  ill  111.  153,  29 
N.  E.  Rep.  558  Buschle  v.  Morris, 
131  111.  588,  ,':;  N.  E.  Rep.  648;  Rozier 
v.  Williams.  92  III.  is?  ;  Johnson  v. 
Holloway,  82  III.  :'.:JI  .  Richardson 
\  Rardin,  88111.  124;  ( Ireenebaum  v. 
Wheeler,90  III.  296  ;  Hart  v.  Win-.  II 
III.  1 !  1      I'.nt  the  rule  'Iocs  not  apply 


when  the  possession  of  the  vendor  is 
consistent  with  the  deed  of  sale,  or 
where  the  sale  is  of  such  a  public 
character  as  to  give  notoriety  thereto. 
Lowe  v.  Matson,  140  111.  108,  29  N.  E. 
Rep.  1036. 

5  Prather  v.  Parker,  24  Iowa,  26; 
Boothby  v.  Brown,  40  Iowa  104  ;  Hes- 
ser  v.  Wilson,  36  Iowa  152  ;  Sutton  v. 
Ballou,  46  Iowa  517.  See  Wessels  v. 
McCann,  85  [owa  424,  52  N.  W.  Rep. 
346. 

,;  See  Lay  v.  Neville,  25  Cal.  552  . 
Hesthal  v.  Myles,  53  Cal.  623  ;  Woods 
v.  Bugbey,  29  Cal.  466;  Brown  v. 
O'Neal,  95  Cal.  262,  30  Pac.  Rep.  538  ; 
Howe  v.  Johnson,  107  Cal.  67,  40  Pac. 
Hep.  42  ;  Rohrbough  v.  Johnson,  107 
Cal.  149,  40  Pac.  Rep.  37. 

1  Allen  v.  Steiger,  17  Col.  552,  31 
Pac.  Rep.  226;  Ray  v.  Raymond,  8 
Col.  167,  9  Pac.  Hep.  15;  Finding  v. 
1 1  art  man,  14  Col.  596,  23  Pac.  Rep. 
1004  ;  Roberts  v.  Hawn,  20  Col.  77,  36 
Pac.  Rep.  886. 

■  Mill.-r  v.  Lacey,  7  Houst.  (Del.)  8, 
30  Atl.  Hep.  640. 


§252  CONFLICTING    POLICIES.  455 

possession  in  controversies  of  the  class  under  con- 
sideration, it  becomes  important  to  consider  which  of 
the  two  rules  or  policies  just  instanced  is  the  more 
salutary  in  practice.  Possibly  the  creditor  class  would 
oftener  effect  a  recovery  when  the  presumption  of 
fraud  from  failure  to  change  possession  is  absolute. 
It  does  not  follow,  however,  that  the  latter  rule  is 
a  wise  one,  or  the  recovery  in  such  cases  always  just.  "  In 
seeking  to  catch  rogues"  it  is  not  the  proper  function  of 
the  courts  to  "  ensnare  honest  men.  We  may  become  so 
zealous  against  fraud  as  to  restrain  the  free  action  of 
honesty,  a  result  that  would  be  most  disastrous.  Better 
is  it  that  many  frauds  should  go  undetected  than  that  the 
means  of  detection  or  prevention  should  treat  honest  men 
as  guilty,  or  teach  them  to  be  always  suspicious  of  their 
neighbors,  and  watchful  that  honest  acts  be  precisely 
measured  according  to  the  standard  of  legal  morality."  ' 
Parties  designing  to  make  covinous  alienations  will  so 
frame  their  actions  as  to  endeavor  to  leave  no  indicia,  or 
to  create  no  presumptions  of  fraud.  Honest  people,  on 
the  other  hand,  conscious  of  no  design  to  wrong  others, 
and  giving  little  thought  to  the  appearance  or  form  of  the 
transaction,  are  often  the  victims  of  unfortunate  circum- 
stances, and  suddenly  discover  that  the  law  imputes  to 
their  innocent  acts  or  omissions  wicked  designs,  than 
which  nothing-  was  further  from  their  minds.  Hence 
Cabell,  J.,  in  commenting  upon  the  mischievous  operation 
of  the  absolute  rule  as  to  change  of  possession,  said  :  "  I 
have  found  myself  compelled  as  judge  to  pronounce 
transactions  to  be  fraudulent  and  void  as  to  creditors 
which  were  known  to  be  perfectly  fair  and  bona  fuh\  and 
were  not  intended  or  calculated  to  delay,  hinder,  or 
defraud     creditors."2     The     rule     creating    a    fraudulent 


1  Hugus    v.    Robinson,    24  Pa.  St.  2  Davis   v.    Turner,    t    GJratt.    (Va.) 

11.  422.  471. 


456  CONFLICTING    POLICIES.  §252 

presumption  in  these  cases  seems  to  be  sufficiently  severe 
in  its  operation.  A  policy  which  blindly  ignores  the  real 
intent  of  the  parties,  practically  excludes  all  evidence 
concerning  the  transaction  or  its  underlying  motives,  and 
conclusively  brands  it  as  fraudulent  by  closing  the 
mouths  of  the  witnesses,  should  be  adopted  with  great 
reluctance.  In  such  cases  "the  question  is  not  whether 
the  transaction  was  honest  or  otherwise,  but  whether 
there  is  not  that  evidence  of  fraudulent  intent  which  pre- 
cludes inquiry  into  its  integrity  as  a  question  of  morals." 
It  is  a  rule  of  policy  as  well  as  of  evidence.1  It  seems 
clear  that  :  "  The  statute  of  frauds  ought  not  to  be  con- 
strued to  make  innocent  parties  sufferers."  2  That  such 
is  often  the  result  cannot  be  questioned.  It  was  found  in 
Virginia  that  the  cases  of  honest  transfers  in  which  the 
vendor  retained  possession  were  too  numerous  and  too 
frequent  to  allow  of  a  further  adherence  to  the  old 
arbitrary  rule  of  fraud  per  se.  It  resulted  in  the  decision 
of  Davis  v.  Turner,3  repudiating  the  rule  as  to  absolute 
presumptions.  The  court  said  :  "  It  seems  to  be  carrying 
a  distrust  of  juries  too  far  to  suppose  them  incapable, 
with  the  aid  of  a  wholesome  prima  facie  presumption,  to 
administer  justice  on  this  subject,  in  the  true  spirit  of  the 
statute,  and  it  is  better  to  confine  the  interposition  of  the 
court  to  guiding,  instead  of  driving  them  by  instructions, 
and  to  the  power  of  granting  new  trials  in  cases  of  plain 
deviation."  In  the  same  case  the  court  observe  that  the 
conclusive  presumption  as  a  test  of  a  fraudulent  purpose 
has  no  claim  to  certainty  ;  on  the  contrary,  it  concedes 
its  own  fallibility,  by  crushing  mercilessly  the  most 
convincing  evidence  of  fairness  and  good  faith.4 

Kirtland  \.  Snow,  20  ('nun.  28.  4  Cole,   v.   White.  —  "But  when  we 

1  Sydnor  v.  Gee,  4  Leigh  (Va.)  545  ;  lookatthe  daily  business  of  life,  out 

Cadogan    v.    Kennett,    2  Cowp.   132,  of  court,  another  aspect  of  this  ques- 

I"  1    Lord  Mansfield  tion    presents   itself.      Mortgages   of 

I  Gratt.  (Va.)  428,  111  personal     property,     as     ships,    lake 


§253 


CHANGE    I  IF    Pi  ISSESSION. 


45/ 


i<  253.  Actual  change  of  possession  required.  —  The  words 
"  actual  and  continued  change  of  possession  "  in  the  stat- 
ute in  New  York,  are  construed  to  mean  "an  open  pub- 
lic change  of  possession,  which  is  to  continue  and  be 
manifested  continually  by  outward  and  visible  signs,  such 
as  render  it  evident  that  the  possession  of  the  judgment- 
debtor  has  ceased."  l  In  Crandall  v.  Brown,2  the  court 
observed  that  "  possession  cannot  be  taken  by  words  and 
inspection."  It  must  be  unequivocal,  carrying  with  it  the 
usual  marks  and  indications  of  ownership  by  the  vendee.3 
In  Otis  v.  Sill,4  Paige,  J.,  said  :  "  It  has  been  repeatedly 
decided  that  '  if  an  assignee  or  morteaeee  leaves  o-oods 
assigned  or  mortgaged  in  the  possession  of  the  assignor 
or  mortgagor  as  his  agent,  this  is  not  an  actual  change  of 


vessels,  canal  boats,  and  river  craft ; 
the  stock  and  implements  of  the 
mechanic  or  small  manufacturer  ;  the 
furniture  of  the  innkeeper ;  assign- 
ments for  the  benefit  of  creditors, 
leaving  the  goods  and  debts  assigned 
publicly  to  be  managed  and  disposed 
of  by  the  original  owner  as  an  agent, 
best  acquainted  with  the  business, 
and  acting  for  the  benefit  of  creditors 
who  have  full  confidence  in  his 
integrity  :  all  these  have  grown  out 
of  the  usages  of  modern  society  ;  the 
necessities  of  commerce  ;  the  conven- 
iences of  daily  life  ;  the  wants  and 
usages  of  trade  and  industry.  They 
have  followed  in  the  train  of  com- 
merce, credit,  and  enterprise.  Like 
them,  they  have  been  largely  produc- 
tive of  benefits  to  society  ;  yet  those 
benefits,  like  the  results  of  all  other 
human  action,  are  not  unmixed  with 
evil.  By  such  means  the  adventure, 
capacity,  acquirements,  and  industry 
of  the  young  or  needy  have  been  aided 
and  stimulated  ;  large  concerns  of 
honorable  but  unfortunate  merchants 
have  been  settled  to  the  greatest 
advantage  of  the  creditors  and  the 


least  possible  loss  of  the  insolvent  ; 
and  the  kindness  of  parents  or  the 
generosity  of  friends  has  been  enabled 
to  preserve  the  comforts  of  a  home  to 
the  wife  and  children  of  a  bankrupt 
without  the  slightest  injury  or  fraud 
(save  in  legal  fiction)  to  prior  creditors 
or  subsequent  purchasers.  Society 
reaps  nothing  but  unquestioned 
benefit  from  nine -tenths  of  such 
assignments  or  securities  occurring  in 
actual  life."  Cole  v.  White,  26 
Wend.  (N.  Y.)  52:5. 

1  Topping  v.  Lynch,  2  I  Job.  (N.  Y.) 
488;  approved  in  Steele  v.  Benham, 
84  N.  Y.  638.  Compare  Hale  v. 
Sweet,  40  N.  Y.  97;  Cutter  v.  <  ope- 
land,  18  Me.  127;  Osen  v.  Sherman. 
27  Wis,  501;  Lesem  v.  Herriford,  II 
Mo.  323  ;  Morgan  v.  Ball,  81  Cal.  93, 
22  Pac.  Rep.  331,  5  L.  K.  A.  579  . 
Smith  v.  Moore,  4  Tex.  App.  Civ. 
Cases,  S  217. 

-  18  Hun  (N.  Y.)461,  463. 

3  Shatter  v.  Alterton,  151  tf.  S.  624, 

14  S.  C.   Rep.  442;  Stevens  v.    hum. 

15  Cal.  507. 

4  8  Barb.  (N.  Y.)  102,  122. 


458  CHANGE    OF    POSSESSION.  i  -S3 

possession  within  the  meaning  of  the  fifth  section  of  the 
statute  of  frauds."  *  Rolling  barrels  of  whiskey  apart 
from  the  rest  of  the  stock  in  the  vendor's  store  and  mark- 
ing them  with  the  buyer's  name  is  not  a  change  of  pos- 
session.2 In  Billingsley  v.  White,3  Williams,  J.,  in 
delivering  the  opinion  of  the  Pennsylvania  Supreme 
Court,  said:  "The  delivery  must  be  actual,  and  such  as 
the  nature  of  the  property  or  thing  sold,  and  the  circum- 
stances of  the  sale  will  reasonably  admit,  and  such  as  the 
vendor  is  capable  of  making."  A  mere  symbolical  or  con- 
structive delivery,  where  an  actual  or  real  one  is  reason- 
ably practicable,  is  of  no  avail,  unless  the  property  is  not 
capable  of  actual  delivery.4  There  must  be  an  actual 
separation  of  the  property  from  the  possession  of  the 
vendor  at  the  time  of  the  sale,  or  within  a  reasonable 
time  afterward,  according  to  the  nature  of  the  property.5 
Where  a  husband  gave  his  wife  a  bill  of  sale  which  she 
accepted,  and  appointed  him  custodian  of  the  property, 
this  was  deemed  sufficient.6  It  is  good  if  the  possession 
taken  of  the  goods  is  such  as  the  nature  of  the  case  would 
permit.'  The  fact  that  the  vendor  is  retained  as  a  clerk 
in  charge  of  the  goods  is  considered  in  some  of  the  cases 
to  be  only  a  circumstance  bearing  upon  the  question  of 
good  faith,8  and  is  not  in  itself  sufficient  to  invalidate  the 


'See  Hanford   v.    Artcher,  4  Hill  55  Pa.  St.  393 ;  Pierce  v.  Kelly,  35  Ore. 

N.  X-.)  271.  9.1;  Chickering   v.    White,    4'.2    Minn. 

Burchinell   v.  Weinberger,  4  Col.  457,  44  N.  W.  Rep.   988  ;  Morrison    v. 

A  pp.  6,  :;i  Pac.  Hep.  911.  Oium,  3   N.  Dak.  76,  54  X.    W.    Rep. 

V.)  l';i.  St.  460.  288  :  ('only  v.  Friedman,  6  Col.   App. 

•  Lathrop  v.  <  layton,  45  Minn.  124,  160,  40  Pac.  Rep.  348. 

47  N.  W    Rep.  544.  6  State  ex    rel.    Brown  v     Mitchell, 

Where  the   goods  are  Locked  up  102  N.  C.  348,  9  S.  E.  Rep.  102. 

and   the  keys   are  delivered    to    the  Manton  v.  Moore,  7  T.  R.  71. 

vendee,  ;u><l  thevendor  removes  from  '  Smith  v.  Craft,    123  U.  S.   436,  8 

tli«'    house,    tin-    is    as    effectual    as  S.  C.  Rep.  196  ;  Bamberger  v.  School- 

thougfa  the  vendee  had  actually  re-  held,  160  U.  S.  164,  16  S.  C.  Rep.  225; 

moved  the  property.     Barr  v.    Reitz,  Murray   v.  McNealy,   *6  Ala    234,   5 

58  Pa  81    556      See  Benford  v.  Schell,  So.  Rep.  565;  Richardson  v.  String- 


§254  QUESTION    FOR    THE    JURY.1  459 

sale,  but  his  retention  would  certainly  be  a  dangerous 
act  in  States  where  the  continued  possession  cannot  be 
explained.  It  may  be  observed  that  the  fact  that  a  party 
testified  in  a  general  way  that  he  took  possesion,  or  was 
in  possession,  will  have  no  weight  when  the  evidence 
shows  precisely  what  was  done.1  Where  the  purchaser 
replenished  the  stock  and  waited  upon  the  customers, 
this  was  considered  a  change  of  possession  ;2  and  a  wife- 
may  hold  a  valid  possession  against  her  husband  without 
separating  from  him.3 

It  is  obvious  from  a  casual  consideration  of  these 
cases  that  a  change  of  possession  which  will  protect  the 
title  of  the  purchaser,  as  against  creditors,  must  consist 
of  a  complete  surrender  and  discontinuance  of  the  exer- 
cise of  acts  of  ownership  by  the  vendor  and  the  assump- 
tion of  such  acts  on  the  part  of  the  vendee. 

§  254.  Question  for  the  jury.  —The  doctrine  of  Massachu- 
setts,4 followed  by  many  of  the  States,  makes  continued 
possession,  as  evidence  of  fraud,  a  question  for  the  jury.5 
It  is  a  question  of  intent  to  be  settled  by  them  as  a  ques- 
tion of  fact,0  even  though  the  evidence  of  good  faith  and 
absence  of  intent  to  defraud  may  be  uncontradicted.' 
If  the  jury  err,  justice  may  be  obtained  by  setting  the 


fellow,  100  Ala.  416,4:22,  14  So.  Rep.  Griswold  v.  Sheldon,   4    X.    V.    581  ; 

283;  Preston  v.  South  wick,  115  N.  Y.  Davis  v.  Turner,  4  Gratt.  (Va.)  422; 

150,  21  N.  E.  Rep.  1031.  Cutter  v.  Copeland.  18   Me.    127  ;  Til 

1  Steele  v.  Benham,  84  N.  Y.  640;  son  v.  Terwilliger,  56  N.  Y.  273  .  Smith 
Miller  v.  Long  Island  R.  R.  Co.,  71  v.  Welch,  10  Wis.  91  ;  Allen  v.  Cow.  11. 
N.  Y.  380.  Compare  Stanley  v.  Na-  23  N.  Y.  507  ;  Hollacher  v.  O'Brien,  5 
tional  Union  Bk.,  115  N.  Y.  122.  22  N.  Hun  (N.  Y.)  277  :  Warner  v.  Norton, 
E.  Rep.  29.  20  How.  460;    Scott    v.    Winship,    20 

2  Butler  v.Howell,  15  Col.  249,25  Ga.  430;  Chamberlain  v.  Stern,  11 
Pac.  Rep.  313.  Nev.  268;  Goddard  v.   Weil,  165   Pa. 

-Stanley    v.   National  Union  Bk..  St.  419,  30  Atl.  Rep.  1000 

115  N.  Y.  122,  22  N.  E.  Rep.  29.  "Miller  ads.  Pancoast,  29  N.  J.  Law 

4  Ingalls  v.  Herrick,  108  Mass.  351.  254;  Renninger  v.  Spat/.,  128  Pa.  St. 

5  See  Mead  v.  Noyes,  44  Conn.  487  ;  524,  18  Atl.  Rep.  405. 
Thompson  v.  Blanchard,  4  N.  Y.  303  ;  "  Blaut  v.  Gabler,  77  X.  Y.  461. 


460        OVERCOMING    PRESUMPTION  —  POSSESSION.        ,^255.256 

verdict  aside,1  but  otherwise  the  court   is  not  entitled  to 
interfere  with  the  prerogative  of  the  jury. 

§255.  Overcoming  the  presumption. —The  presumption 
of  fraud  which  the  statute  raises  from  the  fact  that  there 
was  no  actual  change  of  possession  of  the  chattels  sold, 
practically  becomes  conclusive  if  not  rebutted  or  over- 
come by  competent  proof  in  explanation."  There  is 
nothing  left  for  the  jury  to  pass  upon  or  to  consider.  On 
the  other  hand,  where  the  evidence  repels  the  statutory 
presumption,  the  trial  court  is  justified  in  refusing  to  sub- 
mit the  question  of  fraud  to  the  jury.3 

It  was  observed  in  the  Supreme  Court  of  Kansas,4 
that  the  law  did  not  imply  that  one  purchasing  property 
without  taking  actual  possession,  if  there  were  creditors 
of  the  vendor,  was  presumptively  engaged  in  a  fraudulent 
transaction,  and  that  his  conduct  was  to  be  scrutinized 
accordingly,  but  simply  that  one  claiming  under  such  a 
purchase  takes  nothing  until  he  shows  good  faith  and 
consideration. 

£  256.  Possession  within  a  reasonable  time.  —  It  is  fre- 
quently said  that  the  vendee  must  acquire  possession  of 
the  subject-matter  of  the  sale  within  a  reasonable  time. 
According  to  some  of  the  cases,  a  "  reasonable  time" 
must  be  construed  not  with  reference  to  the  mere  con- 
venience of  the  party,  but  only  with  reference  to  the  time 
fairly  required  to  perform  the  act  of  taking  possession,  or 
doing  what  is  its  equivalent.5  The  cases  where  it  is  held 
that    immediate    delivery  is   not   practicable   are    usually 


Bollacher  \.   O'Brien,  5  Hun  (N.  -Prentiss    Tool    &   Supply   Co.    v. 

577  ;   Potter   v.    Payne,  -21   Conn.  Schirmer,   136   N.   Y.    305,   32   N.   E. 

Rep.   849.      See    Bulger  v.   Rosa.   119 

Mayer  v.   Webster,    18  Wis.  396;  N.  Y.  459.  24  N.  E.  Rep.  853. 

Cheatham  \    Hawkins,  76  N.  C.  338,  4  Kansas  Pacific  Ry.  Co.  v.  Couse, 

and  cases   cited ;  State  v.  Rosenf eld,  17  Kan.  571-575. 

:'-">  Mo.    172      See  Grant  v.   Lewis,  14  See  Seymour  v.  O'Keefe,  44  Conn. 

Wis.  187  132;   Meade  v.  Smith.  16Conn.  346. 


§  257  POSSESSION.  46] 

illustrated  in  the  books  by  the  case  of  a  sale  of  a  ship  at 
sea  where  immediate  delivery  is  a  physical  impossibility  ; 
and  the  same  principle  has  been  applied  to  a  case  where 
the  situation  of  the  parties  at  the  time  of  the  sale  was  so 
remote  from  the  place  where  the  property  was  situated, 
that  immediate  manual  delivery  was  impossible.  What 
is  a  reasonable  time  must  be  determined  by  the  circum- 
stances of  each  case  ;1  no  definite  rule  can  be  laid  down.2 
In  Mcintosh  v.  Smiley'5  it  was  held  that  even  if  the  taking 
of  possession  was  not  within  a  reasonable  time,  the  sale 
would  be  sustained,  if  possession  was  taken  and  contin- 
uously retained  before  the  bringing  of  a  suit  by  an  existing 
creditor. 

§  257.  Change  of  possession  must  be  continuous.  —  In  a 
controversy  which  arose  in  New  York,  it  appeared  that 
the  sale  was  accompanied  by  an  immediate  delivery  of 
the  property  to  the  vendee,  and  an  actual  change  of  pos- 
session, and  that,  after  considerable  time  had  passed,  the 
property  came  again  into  the  possession  of  the  vendor. 
It  was  decided  that  the  law  would  not  measure  the  lapse 
of  time  from  the  sale  and  delivery  to  the  renewed  posses- 
sion by  the  vendor  directly  from  his  vendee,  and  say  that 
a  change  of  possession  continued  for  a  longer  period 
would  satisfy  the  statute,  but  for  a  shorter  period  would 
not  have  that  effect.  The  statute  was  said  to  be  impera- 
tive that  the  sale  must  be  followed  by  a  continued  change 
of  possession  or  the  fraudulent  presumption  would 
obtain.4      If,  however,  the  vendor  takes  possession  openly 


1  State  v.  King,  44  Mo.  238  37;    Young  v.   McClure,   2   W.  <&  S. 

2  Bishop  v.  O'Connell,  56  Mo.  158.  (Pa.)  147:   Bacon   v.  Scannell,  9  Cal. 
'107  Mo.  377.  17  S.  W.  Kep.   979.  271 ;  Miller  v.  Garman,  69  Pa.  St.  134; 

Sec  also   Markev  v.  Umstattd,  53  Mo.  Norton    v.    Doolittle,    :52   Conn.    405; 

Api>.  20.  Clark  v.  Lee,  7s  Mich.  221,  231,  ll   N. 

4  See  Tilson  v.  Terwilliger,  56  N.  Y.  W.   Rep.   260;   Eopkins  v.  Bishop,  91 

27:);  Garman    v.   Cooper,   72   Pa.   St.  Mich.  328,  51  N.  \Y.  Rep.  902. 


462  RESUMPTION    01    POSSESSION.  §258 

as   agent  of  the   vendee,  this  fact   does   not  raise  a  pre- 
sumption of  fraud.1 

£  258.  Temporary  resumption  of  possession.  —  Where  it 
appears  that  the  property  passed  into  the  hands  of  the 
vendor  for  a  mere  temporary  purpose,  and  under  circum- 
stances which  showed  that  the  return  of  the  property  was 
not  effected  with  a  view  of  enabling  the  vendor  to  use  it 
as  his  own  while  the  legal  title  was  in  another,  the  cred- 
itors of  the  vendor  will  not  be  authorized  to  attack  the 
sale  as  fraudulent  and  void.  This  was  held  where  the 
subject-matter  of  the  sale  was  a  cutter  which  the  vendee 
occasionally  allowed  the  vendor  to  use.2  Where  after 
delivery  the  vendor  takes  forcible  possession,  his  so  doing 
does  not  render  the  property  liable  to  seizure  by  his  cred- 
itors.3 Questions  of  this  class  often  depend  for  their 
solution  upon  the  locus  of  the  action  ;  whether  it  be  in  a 
State  where  the  presumption  can  be  rebutted  or  one 
where  it  is  conclusive.  By  way  of  contrast  with  Knight 
v.  Forward,  is  Webster  v.  Peck,4  where  it  appeared  that 
a  vendor,  who  had  sold  a  horse,  within  a  week  after  the 
sale  hired  him  of  the  vendee,  and  was  using  him  to  all 
appearances  as  his  own,  in  the  same  manner  as  before  the 
sale.  This  was  considered  to  be  a  restoration  of  the  pos- 
session,5 and  the  vendee  lost  his  horse  to  an  attaching 
creditor  of  the  vendor.6 


Stanley    v.  Nat.  Union  Bank.    L15  i  Knight  v.  Forward,  <;:;  Hail..  (N. 

N.  Y.  122,22  N.  K.  Rep.  29;  Hopkins  Y.)  311. 

\    Bishop.  91  Mich.  328,51  N.  W.  Rep.  Posl  v.  Berwind-White  Coal  Min- 

Reed  v    Minor,  ::  Cranch  C.  < '.  ingCo.,  176  Pa.  St.  297,  35  Atl.  Rep. 

I  ■  -l     Cas.   446;    Bell    v.    Mc-  111. 

Closkey,  L55  Pa.  St.  319,  26  Atl    Rep.  4  «1  Conn.  495. 

547  .  State  ex  rel.   Smith  v.  Flynn,  56  Sec  Davis  v.  Bigler,  62  Pa.  St.  248  : 

Wo     Ipp.  236;  Crawford  v.  Neal,  I  II  Barr  v.  Reitz,  53  Pa.  St.  256. 

1.    9    585,    12  s    C.    Rep    759;    cf.  5  Compare  Bond  v.  Bronson,  80  Pa. 

Thornton  v.  Cook,  97  Ala   630,  12  So.  St.  360;  Johnson  v.   Willey,  46  N.  II. 

R<  p    W8.  75  ;  Lewis  v.  Wilcox,  G  Nev.  215. 


§§259,260  POSSESSION    OF    BAILEE.  463 

55259.  Concurrent  possession  insufficient.  —  The  authori- 
ties seem  to  be  almost  unanimous  in  holding  that  concur- 
rent possession  by  the  vendor  and  vendee  will  not  satisfy 
the  rule  or  the  statute  requiring  a  change  of  possession.1 
"There  cannot,  in  such  case,"  said  Duncan,  J.,  "be  a 
concurrent  possession  ;  it  must  be  exclusive,  or  it  would, 
by  the  policy  of  the  law,  be  deemed  colorable."3  Again, 
it  is  said  to  be  "  mere  mockery  to  put  in  another  person 
to  keep  possession  jointly  with  the  former  owner."3  In 
Wordall  v.  Smith,4  Lord  Ellenborough  observed  :  "  To 
defeat  the  execution  by  a  bill  of  sale,  there  must  appear 
to  have  been  a  bona  fide,  substantial  change  of  posses- 
sion  A  concurrent  possession  with  the  assignor 

is  colorable.  There  must  be  an  exclusive  possession 
under  the  assignment,  or  it  is  fraudulent  and  void  as 
against  creditors."  5  So  it  is  no  change  of  possession  to 
leave  the  property  in  charge  of  the  vendor's  agent. (i 

§260  Possession  of  bailee- —The  sale  of  personal  prop- 
erty in  the  hands  of  a  bailee  is  good  against  an  execution 
creditor,  though  there  be  no  actual  delivery,  provided  the 
vendor  do  not  retake  the  possession.7  In  Dempsey  v. 
Gardner,s  Chief-Justice  Gray  said  :  "  Where  property 
sold  is  at  the  time  in  the  custody  of  a  third  person,  notice 

1  Sumner  v.  Dalton,  58  N.  H.  296  ;  But  compare  Allen  v.  Cowan,  23  N. 
Lang  v.  Stockwell,  55  N.  H.  561;  Y.  502  ;  State  ex  rel.  Smith  v.  Mynn, 
Steelwagon  v.  Jeffries,  44  Pa.  St.  407.      56  Mo.  App.  236. 

<  iompare  Townsend   v.   Little,  109  U.  "  Linton  v.  But/,  7  Pa.  St.  89  ;  Wor- 

S.  504,  3  S.  C.  Rep.  357.  man  v.  Kramer,  7:!  Pa.  St.  385  ;  I  tood- 

2  Clow  v.  Woods,  5   S.  &   R.  (Pa.)  win  v.  Kelly,  42  Barb.  (N.  Y.)  194. 
287.     SeeMcKibbin  v.  Martin,  64  Pa.  8 127  Mass.  381,  383.     The  bailee  in 
St.  359,  per  Sharswood,   J.  ;  Regli  v.  such  case  must    either   relinquish    to 
McClure,  47  Cal.  612:  Brawn  v.  Kel-  the  purchaser  or  consent   to   hold  as 
ler.  43  Pa.  St.  106.  his  bailee.     Campbell  v.  Hamilton,  63 

8  Babb  v.  Clemson,   10  S.  &  R.  (Pa.)  Iowa  293,    19  N.   W.    Rep.   220;    Bil- 

428.     See  Worman  v.  Kramer,  73  Pa.  dreth  v.  Fitts,   53  Vt.  684;  Morrison 

St.  :57S.  v.  Oium,  3  X.  Dak.  76,  51  N.   \V.  Rep 

4  1  Campb.  332.  288;  Buhl  Iron  Works  v.  Teuton,  67 

5  See  Trask  v.  Bowers,  4  N.  H.  31 1.  Mich.  623,  35  N.  W.  Rep.  804. 

6  Brunswick  v.  McClay,  7  Neb.  137. 


464  N<  '    DELIVERY.  §  261 

to  him  of  the  sale  is  sufficient  to  constitute  a  delivery  as 
against  subsequent  attaching  creditors."  '  The  reason  of 
the  rule  calling  for  change  of  possession  is  entirely  satis- 
fied in  such  cases. ~ 

S  261.  No  delivery  where  purchaser  has  possession.  — 
Where  at  the  time  of  the  sale  the  property  is  in  the  pos- 
session and  subject  to  the  control  of  the  vendee,  the  law 
does  not  require  an  act  of  delivery.  The  sale  is  complete 
without  it.3  In  Warden  v.  Marshall,4  Hoar,  J.,  said  : 
''  The  oil  being  already  in  the  plaintiff's  possession  in  the 
bonded  warehouse,  no  other  delivery  was  necessary  to 
complete  the  sale."  In  Lake  v.  Morris,5  Hinman,  C.  J., 
observed:  "At  the  time  of  the  purchase  the  plaintiff 
was  keeping  the  horses  for  his  nephew,  and  the  defendant 
claims  that,  because  there  was  no  formal  delivery  of  the 
possession  of  them  by  the  vendor  to  the  purchaser,  the 
sale  was  in  point  of  law  fraudulent  and  void  against  cred- 
itors. Of  course  no  such  delivery  could  have  taken  place 
without  first  taking  the  horses  from  the  plaintiff's  posses- 
sion for  the  mere  purpose  of  redelivering  them  to  him 
again.  But  a  merely  formal  act  like  this  we  presume 
would  never  occur  between  parties  whose  only  object  was 
to  place  the  purchased  property  in  the  hands  of  the  pur- 
chaser for  his  use."  But  where  a  principal  transferred  his 
property  to  his  agent  who  resided  at  the  store  and  did 
business  in  the  name  of  the  principal,  it  was  held  that 
unless  the  agent   made  known  to  the    public   that  he  held 

1  Citing  Tuxworth  v.  Moore,  9  Pick.  Burlburd  v.  Bogardus,  10  Gal.  519  ; 
Mass.)  347;  Carter  v.  Willard,  19  Doak  v.  Brubaker,  1  Nev.  218;  Flan- 
Pick.  (Mara.)  1 ;  Russell  v.  O'Brien,  agan  v.  Wood,  33  Vt.  338.  See  Ches- 
127  Mara;  349  See  Hildreth  v.  I'itts.  ter  v.  Bower,  55  Cal.  46. 
53  Vt.  684  ;  Doak  v.  Brubaker,  1  Nev.  '  Martin  v.  Adams.  104  Mass.  262; 
218 ;  How  v.  Taylor,  52  Mo.  592  ;  Ken-  Warden  v.  .Marshall.  99  Mass.  305  ; 
•  1 .  1 1 :  \.  Fitts,  22  N.  111.  Nichols   \.    Patten,   18  Me.  231  ;  Lake 

•  The  rule  i^  otherwise  as  l"  a  mere  v.  Morris,  30  <  !onn.  204. 

servant  ;  the  possession  "l  a   servant  '  99  .Mass.  306. 

i-  1  In'   possession    "I'    his    employer.  '  30  Conn.  204. 


§262  TECHNICAL    DELIVERY    NOT    ESSENTIAL.  465 

as  principal  and  no   longer  as  agent,  the  sale  would   be 
treated  as  fraudulent.1 

§262.  When  technical  delivery  is  not  essential.  —  In  some 
instances  the  necessities  of  the  case  render  a  technical 
delivery  of  the  property  impossible;2  in  such  cases  the 
usual  penalties  will  not  be  visited  upon  the  purchaser. 
Thus  a  sale  of  cattle  roaming  over  uninclosed  plains  with 
those  of  other  owners,  if  bona  fide,  will  not  be  invalid  as 
against  creditors  of  the  vendor,  merely  for  want  of  deliv- 
ery, until  the  purchaser  has  had  a  reasonable  time  to  sep- 
arate and  brand  the  cattle  ;  and  the  branding  of  the  cattle 
by  the  purchaser  will  constitute  a  good  delivery,  although 
the  cattle  are  afterward  allowed  to  remain  in  the  same 
uninclosed  range  of  pasture.3  It  is  not  essential  that  a 
transfer  of  stock  should  be  made  on  the  books  of  a  cor- 
poration, to  be  valid  against  attaching  creditors,  when  not 
called  for  by  some  positive  provision  of  the  charter.4 

A  symbolical  delivery  of  a  large  quantity  of  logs, 
landed  upon  a  stream  preparatory  to  driving,  has  been 
considered  sufficient.5  The  law  accommodates  itself  to 
the  necessities  of  the  business  and  the  nature  of  the 
property,  making  a  symbolical  delivery  sufficient  where 
nothing  but  a  constructive  possession  can  ordinarily  be 
had.6  Where  actual  delivery  is  not  possible  by  reason  of 
bulkiness  the  property  should  be  promptly  placed  within 


1  Comly  v.  Fisher'  Taney's  Dec.  57  Me.  9.  The  same  rule  applies  to 
121,  6  Fed.  Cas.  207.  bricks.  Hawkins  v.  Kansas  City  Hy- 

2  Goddard  v.  Weil.  165  Pa.  St.  419.  draulic  Press  Brick  Co.,  63  Mo.  App. 
30  Atl.  Rep.  1000  ;   Lathrop  v.  Clay-  64. 

ton,  45  Minn.  124,  47  N.  W.  Rep.  544.  6  Compare  Terry  v.  Wheeler,  25  N. 

3  Walden  v.  Murdock,  23  Cal.  540.  Y.  520;  Boynton  v.  Veazie,  24  Me. 
Contra,  Sutton  v.  Ballou,  46  Iowa  286:  Doak  v.  Brubaker,  1  Nev.  218; 
517.  Long  v.  Knapp,  54  Pa.  St.  514  ;  Allen 

4  Boston  Music  Hall  Assoc,  v.  Cory,  v.  Smith.  10  .Muss.  308;  Tognini  v. 
129  Mass.  435.  See  Beckwith  v.  Bur-  Kyle,  17  Nev.  215,30  Pac.  Rep.  819. 
rough,  13  R.  I.  294,  and  cases.  But  compare  Wilson  v.  Hill,  17  Nev. 

5  Bethel  Steam  Mill  Co.  v.  Brown,  401,  30  Pac.  Rep.  1070. 

30 


^66  EX<  USING    WANT   OF   CHANGE   OF    POSSESSION.        ^263 

the  exclusive  power  and  control  of  the  purchaser.1  "  It 
often  happens,"  says  Sharswood,  J.,  "that  the  subject  of 
the  sale  is  not  reasonably  capable  of  an  actual  delivery, 
and  then  a  constructive  delivery  will  be  sufficient.  As  in 
the  case  of  a  vessel  at  sea.  of  goods  in  a  warehouse,  of  a 
kiln  of  bricks,  of  a  pile  of  squared  timbers  in  the  woods, 
of  goods  in  the  possession  of  a  factor  or  bailee,  of  a  raft 
of  lumber,  of  articles  in  the  process  of  manufacture, 
where  it  would  be  not  indeed  impossible,  but  injurious 
and  unusual  to  remove  the  property  from  where  it  happens 
to  be  at  the  time  of  the  transfer.1'  a 

£  263.  Excusing  want  of  change  of  possession.  —  I  he  con- 
tention was  urged  by  counsel,  in  Mitchell  v.  West,8  that 
in  addition  to  proof  that  the  sale  of  the  chattels  was  bona 
fide,  and  that  there  was  no  intent  to  defraud  the  creditors 
of  the  vendor,  it  was  necessary  to  show  some  valid 
excuse  or  reason  for  leaving  the  property  in  the  posses- 
sion of  the  vendor,  or  stated  in  another  form,  that  the 
absence  of  intent  to  defraud  creditors  could  not  be  estab- 
lished without  showing  a  good  reason  for  the  want  of 
change  of  possession.  The  court,  upon  the  authority  of 
Hanford  v.  Artcher,4  held  that  this  was  not  the  case. 
The  very  purpose  of  the  law  in  presuming  fraud  from  a 
failure  to  deliver  possession  was  to  suppress  sales  made 
in  bad  faith  and  without  consideration.  Manifestly  this 
presumption  ought   to   disappear   where  both  good   faith 

Bfiller  v.  Lacey,  7  Houst.  (Del.)  8,  Mass.  308;  Conway  v.    Edwards,    6 

BO  Atl.  Rep.  640.  N.-v.    190 ;  Walden    v.   Murdock,    33 

McKibbin    v.    Martin,   tit    Pa.  St.  Cal.   540;  Cartwrighl    v.    Phoenix,  7 

Citing   Clow    v.    Woods,  5  S.  A  Cal.  281 ;  Woods   v.   Bugbey,  29  Cal. 

R.  (Pa.)  275  ;  Cadbury  v.  Nolen,  5  Pa.  472  ;  Lathrop  v.    Clayton,  45  Minn. 

;.'u.  Linton  v.  Hut/..  7  Pa.  St.  89  :  124,  17  X.  W.   Rep.  544  ;  Garretson  v. 

Eaynesv.    Hunaicker.  26  Pa.  St.  58  ;  Backenberg,  144  Pa.   St.  107,  22  Atl. 

Chase  v  Ralston,  :;<>  Pa.  St.  589;  Barr  Rep.  875  ;  Bell  v.  McCloskey,  155  Pa. 

\    Reitz,58    Pa  St.  256  .  Benford    v.  St.  319,  26  Atl.  Rep.  547. 

Schell,  55  Pa   Si    898.     See  ah..  Fitch  55  \.  Y.  107. 

v.  Burk,  88  VI    ••.-:::   Hutching  v.  Gil-  l4  Hill  (N.  Y.)  271. 
christ,  '-,:>.  Vi.  82  .    Ulen  v.  Smith,    i<» 


§  264  POSSESSION    1  U     RE  X I   IN.  467 

and  consideration  are  proved  to  exist.  Clute  v.  Fitch  ' 
is  an  illustration  of  a  sufficient  excuse  for  failing  to 
change  possession.  A  sleigh  was  sold  in  July,  and  owing 
to  the  difficulty  of  removing  it  at  that  season  of  the  year, 
was  stored,  by  agreement,  in  the  vendor's  barn  until  the 
ensuing  winter.  This  was  considered  a  satisfactory 
explanation  of  the  failure  to  change  possession.  It  may 
be  here  noted  that  a  vendee  may  continue  at  the  old 
stand  the  business  which  he  has  purchased  of  the 
vendor.2 

§  264.  Change   of  possession  of  realty. — There  seems  to 
be  a  distinction  recognized  in  the  law  as  to  the  effect  of 
a  failure  to  change  possession    of   realty  as  distinguished 
from  the  rule  applicable  to  personalty.      In  Phettiplace  v. 
Sayles,3  a  leading  and  highly  important   case,  Story,   J., 
said:  "Another  circumstance,  relied  on  to  invalidate  the 
good    faith    of  this    conveyance,    is,    that   no    change  of 
possession    took   place,    but     the    grantor    continued    in 
possession    notwithstanding   the  sale,   and  occupied    the 
farm  as  he  had  been  accustomed  to  do.     This  circumstance 
is    not    without   weight,   and,  in   a   doubtful    case,    would 
incline  the  court   not  to  yield  any  just  suspicions  arising 
from  other  causes.      But  possession,  after  a  sale  of   real 
estate,  does  VioX.  per  se  raise  a  presumption  of  fraud,  as  it 
does  in  the  case  of  personal  estate.     In  the  latter  case, 
possession   is  prima  facie    evidence    of    ownership,   and 
where    a    party,    who    is    owner,  sells   personal    property 
absolutely,    and    yet  continues  to  retain  the  visible  and 
exclusive  possession,    the  law  deems  such  conduct  a  con- 
structive fraud  upon  the  public,  and  the  sale  as  to  cred- 
itors  wholly    inoperative,    whether  it    be    for  a  valuable 
consideration  or  not.      This  doctrine  has  its  foundation  in 
a  great  public  policy,  to   protect   creditors  against  secret 

1  2o  Barb.  (N.  Y.)  428.  ;  4  Mason,  321. 

3  Ford  v.  Chambers,  28  Cal.  13. 


ji.S  POSSESSION    OF    REALTY.  §264 

collusive  transfers.  The  same  rule  does  not  apply  to  real 
estates.  Possession  is  not  here  deemed  evidence  of 
ownership The  public  look  not  so  much  to  posses- 
sion as  to  the  public  records  as  proofs  of  the  title  to  such 
property.  The  possession,  therefore,  must  be  inconsistent 
with  the  sale,  and  repugnant  to  it  in  terms  or  operation, 
before  it  raises  a  just  presumption  of  fraud."  '  The  rule 
seems  to  be  established  in  New  York  to  the  effect  that 
the  continuance  in  possession  of  the  grantor  is  merely  a 
circumstance  proper  to  be  considered  in  connection  with 
other  evidence  tending  to  establish  a  design  to  defraud 
creditors,  but  it  did  not  of  itself  warrant  a  finding  as  a 
legal  conclusion  that  the  deed  was  fraudulent,2  and  no 
presumption  of  fraud  is  raised  by  such  continuance  in 
possession  and  receipt  of  profits  where  these  acts  are  in 
accordance  with  the  terms  of  the  deed.8 

The  reader  must  not  be  misled  by  the  observation  of 
Judge  Story,  that  "  possession  is  not  here  deemed  evidence 
of  ownership."  The  word  "  here"  is  significant  in  this 
connection.  The  rule  enunciated  by  the  learned  court  is 
partially  founded  on  the  disinclination  of  the  law  to 
presume  fraud  and  is  limited  in  its  application.  Pos- 
iion,  on  the  other  hand,  ordinarily  raises  a  presump- 
tion of  ownership  by  the  occupant  of  real  property.    True 


See  Every  v.  Edgerton,  7   Wend,  where  a  chattel  is  sold,  because  the 

(N.    Y.     260;   Bant  <>r  the  U.    S.   v.  title    to    the   former    is  evinced     by 

Housman,  6  Paige  (N.  Y.)  526  ;  Fuller  possession,   not  of  the  thine;,    but  of 

v.    Brewster,   53  Md.  363;    (Mark   v.  the  title  deeds,   which,  like  manual 

Krause,  2  Mackey  d>  C.)  Mo  occupation  in  the  case  of  a  chattel,  is 

I'lnte    v.  Newkirk,   16  N.  Y.  684.  the  criterion."    SeeTibbakn   Jacobs, 

Compare  Steward  v.  Thomas,  :;.-,  \|,,.  :;i  Conn.  431  ;  Merrill  v.  Locke,  41  N. 

a    v.    Burgett,    :;:;   Ark.  B.  489  ;  Ludwig  v.  Highley,  5  Pa.  St. 

Tompkins   v.    Nichols,   r,:;    Ala.  183;  Allentown  Bank  v.  Beck.  49  Pa. 

197;  Collins  x.  Taggart,  57  Ga.  355.  St.  394;  Paulling  v.  Sturgus,  3  Stew. 

^verj    x.    Street,  6   Watts   (Pa.)  (Ala.)  95  ;  Suiter  v.  Turner,  10  Iowa 

849.  Chief  -Justice  Gibson  said  :  "It  is  517, 

well   established  thai    where  land   is  Alexander  \.  Todd,    I    Bond    175, 

conveyed  want  of  correspondent  pos  I    Fed.  <  'as.   :;s:; :   Hildreth   v.  Sands, 

of  fraud  than  2  Johns.  Ch.  (X.  V.)  46. 


§  265  CHANGE   ON   JUDIC1  \l.   SALE. 

it  is  the  lowest  degree  of  title,  but  nevertheless  it  is  evi 
dence  of  ownership;1  descends  to  heirs  ; 2  is  subjeel  to 
taxation;3  may  be  sold  at  sheriff's  sale;1  and  is  suffi- 
cient proof  of  title  to  support  ejectment  against  tres- 
passers.5 In  these  cases  the  presumption  of  ownership 
arising  from  possession  is  indulged  because  it  does  not 
conflict  with  an  honest  and  lawful  intention,  and  does  not 
lead  to  a  conclusion  bearing  the  stigma  of  fraud. 

§265.  Change  of  possession  on  judicial  sale.  —  The  rule  is 
promulgated  in  Pennsylvania  that  a  change  of  possession 
is  not  necessary  to  give  validity  to  a  judicial  sale."  Chief 
Justice  Sharswood  said,  in  Smith  v  Crisman  :7  "Nothing 
is  better  settled  in  this  State  than  that  the  purchaser  of 
personal  property  at  sheriff's  or  constable's  sale  may  leave 
it  in  the  possession  of  the  defendant,  as  whose  property 
it  was  sold,  under  any  lawful  contract  of  bailment."  The 
retention  of  possession  in  such  a  case  is  not  a  badge  of 
fraud,  because  the  sale  is  not  the  act  of  the  party  retain- 
ing the  property,  but  is  the  act  of  the  law,  and  being  a 
judicial  sale,  conducted  by  a  sworn  officer  of  the  law,  is 
deemed  to  be  fair  and  honest  until  proved  otherwis 

The  rule  is  quite  universal  in  its  application  that  where 
a  stranger  purchases  and  pays  for  property  on  execution 
sale,  his  failure  to  remove  it  from  the  possession  of  the 
defendant  in  execution  does  not  render  the  sale  fraudulent 
per  se  or  presumptively    fraudulent.9      Under   the   statute 

1  Rawley   v.    Brown,  71  N.    Y.  85.  Scott,  II  Bow.282.     See  Burl  \.  Pan- 

See  Ludlow  v.  McBride,   3  Ohio,  241  ;  jaud,  99  U.  8.  180  ;  Sedgwick  &  Wait 

Phelan  v.   Kelly,  25  Wend.  (N.  Y.)  on    Trial    of    Title   to     Land,    Chap. 

389  ;  Teabout  v.  Daniels,  38  Iowa  158;  XX  VII. 

Gillett  v.  Gaffney,  3  Col.  351.  G  Bisbing    v.    Third    Nat.    Hank.'.):: 

J  Mooney  v.   Olsen,    21   Kan.    G91-  Pa.  St.  79  ;  Maynes  v.  Atwater,  88  Pa 

697.  St.  496. 

3  Black  well   on  Tax  Title?,  pp.  5,  6.  '  9J  Pa.  St.  430. 

4  Yates  v,  Yates,  76  N.  C.  142.  'Craig's   A.ppeal,    77    Pa.    St.     156; 
6  Jones  v.  Easley,  53  Ga.  454  ;  Bates  Myers  v.  Harvey,  2  I'.  &  W.     Pa 

v.    Campbell,    25    Wis.    614  ;  Doe    v.  '  Abney   v.  Kingsland,  10  Ala 

West,  1  Blackf.  (Ind.)  135  :  Christy  v.      Latimer  v.  Batson,  7  DowL  &  R.  106 


47<D  DELIVERY    OF   GROWING    CROPS.  §266 

in  New  York,1  however,  as  interpreted  by  the  courts,2  the 
execution  sale  will  be  presumptively  fraudulent  unless 
accompanied  by  immediate  delivery,  and  followed  by  an 
actual  and  continued  change  of  possession,  whether  the 
plaintiff  in  execution  or  a  third  person  be  the  purchaser. 
The  reason  of  the  rule  and  the  evil  at  which  it  is  aimed  is 
said  to  justify  these  decisions.  Finch,  J.,  observed  :  "As 
an  honest  purchaser  buys  because  he  wants  the  property 
and  its  possession,  and,  therefore,  naturally  and  usually 
takes  it,  the  absence  of  this  fact  indicates  some  purpose 
different  from  that  of  an  honest  purchaser,  and  requires 
proof  of  good  faith  and  honest  intention.  These  consid- 
erations apply  equally  to  cases  where  the  transfer  of 
title  from  the  vendor  is  through  the  agency  of  a  judg- 
ment and  execution  followed  by  a  sheriff's  sale."3 

£266.  Delivery  of  growing  crops.  —  Where  the  property 
which  is  the  subject-matter  of  sale  is  a  growing  crop, 
there  is  much  dissension  in  the  cases  as  to  delivery  of 
possession.  It  is  said  in  Illinois  that  in  the  case  of  stand- 
ing crops  the  possession  is  in  the  vendee  until  it  is  time 
to  harvest  them,  and  until  then  he  is  not  required  to  take 
manual  possession  of  them.4  Chief-Justice  Cockburn,  in 
speaking  upon  this  subject,  said:  "  It  is  impossible  that 
there  can  be  present  delivery  of  growing  crops.  A  grow- 
ing crop  is  valueless,  except  so  far  as  by  its  continuing 
growth  it   may   hereafter  benefit   the  purchaser,  and  it  is 

Anderson    v.    Brooks,    11    Ala.    953;  Gardenier  v.  Tubus,  21  Wend.  (N.  Y.) 

Walter   v.  Gernant,    1::   Pa.  St.  515 ;  109. 

Dick  v.   Lindsay,   3  Grant   (Pa.)  431 ;  '  Stimson  v.  Wrigley,  86  N.  Y.  336. 

Poole  v.  Mitchell,  1  Hill's  (S.  C.)Law  See  Wallace  v.  Nodine,  57  Hun  (N. 

404;Guignard    v.    Aldrich,    10  Rich.  Y.)245, 10  N.  Y.  Supp.  919. 

Eq.     s.    C.)    853.     See    Hanford    v.  *  Ticknor  v.  McClelland,  84  111.  471. 

Obrecht,  49  111.  lit;    Compare  O'Brien  See   Bull  v.    Griswold,   19    111.   631; 

v   Chamberlain,  50  Cal.  285.  Thompson    v.    Wilbite,   81    111.   356; 

;  3  N.  Y.  I:,  s.  222,  .>:.-,,  6.  Bellows  v.    Wells,   36  Vt.  600.     Coni- 

Stimson  v.  Wrigley,  86  X.  Y.  336  ;  pare  Quiriaque  v.  Dennis,  24Cal.  154. 

Fonda  v.  Gross,  ISWend.  (N.  Y.)  628;  Sec  State  v.  Casteel,  51  Mo.  App.  148; 

State  v.  Durant,  53  Mo.  Apj).  493. 


£267  POSSESSION    Willi    POWER   OF   SALE.  I71 

only  when  it  reaches  maturity  that  it  can  be  removed,  nor 

is  it  intended  that  it  shall  be  removed  till  it  is  ripe 

In  a  popular  and  practical  sense,  growing  crops  are  no 
more  capable  of  removal  than  the  land  itself."  '  Kent 
said  :  "  I  do  not  know  that  corn,  growing,  is  susceptible 
of  delivery  in  any  other  way  than  by  putting  the  donee 
into  possession  of  the  soil."  Yet  authority  can  be  cited 
to  the  effect  that  the  vendee  does  not  acquire  good  title 
in  such  cases.2 

§  267.  Possession  with  power  of  sale.— The  effect  of  leav- 
ing a  mortgagor  in  possession  of  the  mortgaged  goods, 
with  power  to  sell  the  property  and  substitute  by  purchase 
other  property  in  its  stead,  has  created  much  dissension 
in  the  courts,  and  engendered  a  vast  amount  of  litigation. 
The  question  came  up  before  the  United  States  Supreme 
Court  in  Robinson  v.  Elliott,3  a  case  which  we  shall  pres- 
ently consider  at  length.4  The  mortgagors  were  author- 
ized by  the  express  terms  of  the  mortgage  to  continue  in 
possession  of  the  mortgaged  wares  and  merchandise,  sell 
the  same,  supply  their  places  with  other  goods  by  pur- 
chase, the  lien  of  the  mortgage  to  extend  to  the  replen- 
ished stock.  The  mortgage  was  adjudged  absolutely  void. 
It  was  said  that  whatever  might  have  been  the  motive 
which  actuated  the  parties  to  the  mortgage,  it  was  mani- 
fest that  the  necessary  result  of  what  they  did  was  to 
allow  the  mortgagors,  under  cover  of  the  mortgage,  to 
sell  the  goods  as  their  own,  and  appropriate  the  proceeds 
to  their  own  purposes,  and  this,  too,  for  an  indefinite 
length  of  time.  A  mortgage  which  in  its  very  terms  con- 
templates such   results,  besides  being  no  security  to  the 


1  Brantoru  v.  Griffits,  L.  R.  2  C.  P.      Stone  v.   Peacock,  35  Me.    385      See 
D.  212.  Raventas  v.  Green,  57  < !al.  255. 

2  Smith  v.  Champney,  50  Iowa  174  ;         3  22  Wall.  513. 

Lanison  v.  Patch,  5  Allen  (Mass.)  586;         4  See  infra.  Chap.  XXII..  on  Fraud 

ulent  Chattel  Mortgages. 


47-  POSSESSION    WITH    POWER    OF   SALE.  §267 

mortgagees,  operates  in  the  most  effectual  manner  to  ward 
off  other  creditors  ;  and  where  the  instrument  on  its  face 
shows  that  the  legal  effect  of  it  is  to  delay  creditors,  the 
law  imputes  to  it  a  fraudulent  intent.1 


1  See  Egdell  v.  Hart,  9  N.  Y.  213.  these  shifting  liens.  See  Etlieridge 
There  is  much  confusion  in  the  an-  v.  Sperry,  139  U.  S.  266,  11  S.  C.  Rep. 
thorities  concerning   the  validity  of     565. 


CHAPTER     XVIII. 


EVIDENCE. 


£  268.     Concerning  evidence. 

269.  Competency  of   party  as  wit- 

ness. 

270.  Proof    and  conclusiveness    of 

judgments. 

271.  Burden  of  proof. 
271a.  Books  of  account. 

272.  Secret  trust. 

273.  Proof  of  insolvency  of  debtor. 

274.  Insolvency  of  vendee. 

275.  General  reputation. 

276.  Concerning  res  gestae,. 

277.  Declarations      before      sale  — 

Realty  and  personalty. 


§  278.     Declarations    of    debtor   after 
sale. 

279.  Possession   after   conveyance. 
219a.  Professions  of  good  faith. 
279l>.  Intention — Knowledge. 
279c.  Consideration. 

280.  Declarations  of  co-conspirators. 

281.  Proof  of  circumstances. 

282.  Other  frauds. 

283.  Suspicions  insufficient. 

284.  Proving  value 
284a.  Recitals  in  deed. 

285.  Testimony   must    conform    to 

pleadings. 


"Where  fraud  appears  courts  will  drive  through  all  matters  of  form."  —  Buck  v.   Ver 
Ind.  117. 

§  268.  Concerning  evidence.  —  Manifestly  general  princi- 
ples and  rules  of  evidence  cannot  receive  extended  con- 
sideration in  a  special  treatise  relating  to  fraudulent 
alienations  and  creditors'  bills.  The  sufficiency  of  the 
proofs  requisite  to  uphold  or  defeat  a  creditor's  proceeding 
to  discover  equitable  assets  or  annul  fraudulent  transfers 
must,  however,  necessarily  receive  passing  attention  in  its 
prominent  and  peculiar  phases.  The  character  of  the 
evidence  germane  to  the  subjects  of  consideration,1 
notice,2  intention,3  badges  of  fraud,4  creditors'  liens,5  and 
change  of  possession, (i  has  been  regarded  as  of  sufficient 
importance  to  call  for  incidental  treatment  in  separate 
chapters  devoted  to  those  topics,  and  will  not  be  here 
discussed  anew.      Voluntary  and  fraudulent  conveyances, 


1  See  Chap.  XV. 

2  See  Chap.  XXIV. 

3  See  Chap.  XIV. 


4  See  Chap.  XVT 

5  See  Chap.   IV. 

6  See  Chap.  XVII. 


474  COMPETENCY    AS    WITNESS.  §269 

as  elsewhere  shown,1  are  regarded  as  valid  and  operative 
between  the  parties.  Only  a  creditor2  or  a  purchaser 
from  the  donor  or  grantor  can  assail  them,  or  inquire  into 
the  consideration,  or  the  intent  inspiring  their  execution. 
If  the  relationship  of  debtor  and  creditor  is  not  admitted, 
the  burden  of  proving  it  rests  upon  the  creditor;  the 
primary  question  in  such  cases  is  the  existence  of  this 
relationship,3  for  if  it  is  not  established,  then  the  com- 
plainant stands  in  the  attitude  of  an  intermeddler,  raising 
a  clamor  which  a  court  of  equity  would  be  illy  employed 
in  silencing.4  The  evidence  in  these  actions  takes  a  wide 
range.5  The  debtor's  acts,  statements,  correspondence, 
the  character  of  his  business,  and  his  debts,  may  be 
investigated.6  And  contracts  are  to  be  interpreted 
according  to  the  law  of  the  State  where  made  —  the  lex 
loci  —  unless  it  is  plain  the  laws  of  some  other  State  were 
in  view.7 

£  269.  Competency  of  party  as  witness.— Not  only  is  it 
permissible  for  the  defendant  to  testify  as  a  witness  in  an 
equity  cause,8  but  he  may  be  compelled,  under  the  mod- 
ern procedure,  to  give  evidence  upon  the  demand  of  the 
complainant.9  The  rule  of  the  common  law  that  no 
party  to  the  record  could  be  called  as  a  witness  for  or 
against  himself,  or  for  or  against  any  other  party  to  the 


1  !hap.  WW  I  468,  32  N.  E.  Hep.  666;  Ferbrache  v. 

Sawyer  \.  Harrison,  43  Minn.  297,  Martin  (Idaho,  L893),  32  Pac.  Rep.  252; 

46  N.  W.  Rep.  434.  Silvis  v.  Oltmann,  53  III.  A.pp.  392. 

Cook  \.  Eopper,  23  Midi.  517,  per  6  Brittain  v.  Crowther,  54  Fed.  Rep. 

Cooley,  .1.     See  Stanbro  v.  Hopkins.  295 ;  Jenne  v.  Joslyn,  41  V).  478. 

88    Barb.  (N.    F.)   271;    Edmunds  v.  '  Chillingworth  v.  Eastern  Tinware 

Mister,  58   Miss    765;    Donley  v.  Mc-  Co.,  66  Conn.  318,33  Atl.  Rep.  1009. 

Kiernan,  62  Ala.  34.  Where   fraud   is  allege. I    as  the  basis 

4  Means  v.  Sicks,  65  Ala.  24:!.  of    an    action,    it    must    he    proved. 

Nicolay    v.  Mallery,  62  Minn.  119,  Truesdell  v.  Bourke,   145  N.  V.  612, 

64  N  W.  Rep.  108;  Trumbull  v.  Bewitt,  40  N.  E.  Rep.  83. 

an.  67,  81    Ail.   Rep.  492;  Miller  » Clark  v.  Krause,  2  Mackey(D.C) 

Eanley,  94    Mich.   258,  58  N.    W.  571. 

Rep  962  .  O'Donnell  v.  Hall,  157  Mass.  'Texas  v.  Chiles,  21  Wall.  488. 


§  270  PROOF   OF     fUDGMENTS.  475 

suit,1  has  been  almost  wholly  abrogated.8  Mr.  Justice 
Swayne  said  in  Texas  v.  Chiles:3  "The  innovation  it  is 
believed,  has  been  adopted  in  some  form  in  most  if  not 
in  all  the  States  and  Territories  of  our  Union.4  It  is 
eminently  remedial,  and  the  language  in  which  it  is 
couched  should  be  construed  accordingly."  Objections 
to  the  admissibility  of  testimony  must  be  specified.5 

§  270.  Proof  and  conclusiveness  of  judgments. — We  have 
already  discussed  the  principle  underlying  the  rule  which 
requires  a  judgment  as  the  foundation  of  a  creditor's  pro- 
ceeding to  annul  fraudulent  alienations  or  discover  equi- 
table assets  ;6  and  the  sufficiency  or  insufficiency  of  par- 
ticular judgments  to  satisfy  this  exaction.7  A  judgment, 
unless  rendered  without  jurisdiction,  is  not  open  to  col- 
lateral attack.8  It  follows  from  what  has  been  already 
said,  and  indeed  has  been  expressly  decided,  that  a  vol- 
untary conveyance  will  be  upheld  as  regards  a  judgment 
rendered  against  the  debtor  upon  a  fictitious  debt.'-1  It 
may  be  observed  that  where  no  evidence  is  offered  to 
impeach  the  judgments,  and  it  appears  that  they  were 
regularly  rendered  by  courts  having  jurisdiction,  and  were 
conclusive  as  between  the  parties,  such  judgments  are 
competent  evidence  tending  to  prove  the  debt,  even  as  to 
third  parties,  until  something  is  shown  to  the  contrary  by 


1  1  Greenleafs  Ev.  §§  329.  330.  8  Dreyfuss  v.  Seale,  18  Misc.  (N.  Y.) 

sSee  Texas  v.  Chiles,  21  Wall.  488 ;  551,  41  N.  Y.   Supp.    875:    Cooper   v. 

Clark  v.  Krause,  2Mackey(D.  C.)571.  Reynolds,     10   Wall.    316;    White    \ 

3  21  Wall.  490.  Bogart,  73    N.   Y.    256,  259:    Candee 

4  Citing  1  Greenleaf   on   Evidence,  v.  Lord,  2  N.  Y.  269.     A  court  of  on.- 
§  329.  State  may,  where  it  lias  jurisdiction 

5  Adams   v.  Franklin,   82  Ga.   168,  of  the  parties,  determine  the  question 
8  S.  E.  Rep.  44.  whether  a  judgment   between   them, 

6  See  Chap.  IV.  §§  74-77.  rendered   in   another    Stat.',   was    ob- 
1  See  §£  76,  77  ;  Lindsey  v.  Delano,  tained  by  fraud,  and  if  it  was  may  en- 

78  Iowa  350,    43  N.    W.    Rep.   218;  join  the  enforcement  of  it.     Davis  v. 

Boyer  v.  Berryman,   123  Ind.  451.24  Cornue,   151   N.  V.  179,  15  N.  E.  Rep. 

N.   E.  Rep.   249  ;  Spotts   v.  Common-  449. 

wealth,  85  Va.  531,  8  S.  E.  Rep.  375.  9  King  v.  Tharp,  26  Iowa  288 


476 


PROOF   OF  JUDGMENT. 


§  2/0 


way  of  impeachment.1  A  third  party  may,  as  a  general 
rule,  show  that  the  judgment  was  collusive,  and  not 
founded  upon  an  actual  indebtedness  or  liability.3  Were 
the  rule  otherwise  the  greatest  injustice  would  result, 
since  a  stranger  to  the  record  cannot  ordinarily  move  to 
vacate  the  judgment  or  prosecute  a  writ  of  error  or  an 
appeal.3  The  fact  that  a  judgment  is  entered  upon  an 
offer  to  allow  it  does  not  render  such  judgment  collusive 
in  any  sense.4  Teed  v.  Valentine  5  is  a  peculiar  case  relat- 
ing to  the  admissibility  of  evidence  to  explain  a  judgment 
and  the  motives  of  the  debtor.  In  that  case  it  appeared 
that  the  debt,  which  was  merged  in  the  judgment,   repre- 


'Vogt  v.  Ticknor,  48  N.  H.  245; 
Church  v.  Chapin,  35  Vt.  231  ;  N.  Y. 
&  Harlem  R.  R.  Co.  v.  Kyle,  5  Bosw. 
(N.  Y.)  587;  Hills  v.  Sherwood,  48 
Cal.  386  ;  Law  v.  Payson,  32  Me.  521  ; 
Clark  v.  Anthony,  31  Ark.  546.  See 
Good  now  v.  Smith,  97  Mass.  69  ;  Law- 
son  v.  Moorman,  85  Va.  880,  9  S.  E. 
Rep.  150  ;  Wilkerson  v.  Schoonmaker. 
77  Tex.  615,  14  S.  W.  Rep.  223  ;  Por- 
mann  v.  Frede,  72  Wis.  226,  39  N.  W. 
Rep.  385  ;  Schmidt  v.  Neimeyer,  100 
Mo.  207,  13  S.  W.  Rep.  405  ;  Adams  v. 
Franklin,  82  Ga.  168,  8  S.  E.  Rep.  44  ; 
(rim  v.  Kessing,  89  Cal.  478,  26  Pac. 
Rep.  1074  ;  Jamison  v.  Bagot,  106  Mo. 
240,  16  S.  W.  Rep.  697.  See  §  74, 
especially  the  note. 

■  Vogt  v.  Ticknor,  48  N.  H.  247  ; 
Gregg  \.  Bigham,  1  Hill's  (S.  C.) 
Law.  J'.i'.t;  Collinson  V.  .Jackson,  14 
Fed.  Rep.  309,  8  Sawyer  357; 
('lark  v.  A  iithmiv,  :;i  A.rk.  549 ;  Carter 
v.  Bennett,  1  Fla.  283.  See  Lewis  v. 
Rogers,  16  Pa.  St.  18;  Sidensparker 
v.  Sidensparker,  52  Me.  481  ;  ('lark  v. 
Douglass,  <>','  Pa.  St.  lit; .  Wells  v. 
O'Connor,  '27  Bun  (N  Y.i  438.  Com- 
pare Voorhees  v.  Seymour,  36  Barb. 
(N.  5  569  Meeker  v.  Han-is,  l!)  Cal. 
Shaw  \.  I )wight.  27  N.  Y.  345  ; 


Whittlesey  v.  Delaney,  73  N.  Y.  571  ; 
Mandeville  v.  Reynolds,  68  N.  Y.  545. 
"Fraud  and  imposition  invalidate  a 
judgment  as  they  do  all  acts."  Dob- 
son  v.  Pearce,  12  N.  Y.  165.  The 
fraud  which  will  authorize  one  court 
to  reverse,  in  a  collateral  proceeding, 
the  judgment  of  another  court  is  a 
fraud  practiced  in  the  procurement  of 
the  judgment,  by  which  the  defend- 
ant was  excluded  from  availing  him- 
self of  a  defense.  Major,  etc.,  of  N. 
Y.  v.  Brady,  115  N.  Y.  599,  22  N.  E. 
Rep.  237. 

3  See  Guion  v.  Liverpool  L.  &  G. 
Ins.  Co.,  109  U.  S.  173,  3  S.  C.  Rep. 
108  ;  Sidensparker  v.  Sidensparker,  52 
Me.  487;  Leonard  v.  Bryant,  11  Met. 
(.Mass.)  370:  Thomas  v.  Hubbell,  15 
N.  Y.  405  ;  Ex  parte  Cutting,  94  U.  S. 
14. 

4 Columbus  Watch  (o.  v.  Hoden- 
pyl,  135  N.  Y.  430,  32  N.  E.  Rep.  239. 
But  a  confessed  judgment  will  be  set 
aside  where,  from  a  consideration  of 
all  the  circumstances,  it  appears  to 
have  been  part  of  a  scheme  to  defraud 
creditors.  New  York  Commercial 
Co.  v.  Carpenter,  4  Misc.  (N.  Y. )  240, 
24  N.  Y.  Supp.  248. 

565N.  Y.  471. 


§  2/1  BURDEN   OF    PROOF.  i;; 

sented  property  sold  after  the  delivery  of  the  deed  ;  that 
is,  the  complainant  was  a  subsequent  creditor.  The  debtor 
was  allowed  to  testify  that  he  purchased  the  property  as 
agent  for  his  son,  and  that  he  did  no  business  for  himself. 
Though  the  judgment  was  conclusive  as  establishing  that 
he  was  liable  for  the  debt,  it  was  considered  competent  to 
show  that  the  debtor  acted  as  agent,  and  was  not  person- 
ally engaged  in  business,  and  hence  did  not  contemplate 
future  indebtedness,  and  had  no  design  to  defraud  future 
creditors.1  According  to  some  authorities  a  judgment  is 
only  evidence  of  its  own  existence;  the  fact  that  the  claim 
antedated  the  fraudulent  conveyance  must  be  otherwise 
shown.2 

§  271.  Burden  of  proof. —  In  general  the  obligation  of 
proving  a  fact  rests  upon  the  party  who  substantially 
asserts  the  affirmative  of  the  issue.3  The  decisions  in 
the  various  States  differ  on  the  point  whether  a  prima 
facie  case  is  made  out  by  showing  fraud  on  the  part  of 
the  grantor,  which,  in  the  absence  of  evidence  on  the 
part  of  the  grantee,  that  he  is  both  a  bona  fide  purchaser 
and  a  purchaser  for  value,  entitles  plaintiff  to  a  judgment, 
or  whether  the  plaintiff  is  bound  to  show,  as  part  of  his 
case,  fraud  or  absence  of  consideration  on  the  part  of  the 
grantee.  The  correct  rule  seems  to  be  that  a  creditor 
may  succeed  by  proving  a  fraudulent  intent  on  the  part 
of  the  grantee.4  In  some  cases  the  rule  is  held  to  be 
that,  in   any  contest  between  a  grantee  and  an   existing 


1  See  Chap.  VI.,  §§  96-101.  especially  on  the  trial  and  sifting  of 

2  Sweet  v.  Dean,  43  111.  App.  650  ;  facts  to  unravel  the  subtleties  of  fraud, 
Burton  v.  Platter,  53  Fed.  Rep.  901;  is  an  important  legal  right,  and  if 
Troy  v.  Smith,  33  Ala.  469  ;  Means  v.  improperly  denied,  demands  the 
Hicks,  65  Ala.  241:  Marshall  v.  granting  of  a  new  trial.  Royce  v. 
Groom,  60  Ala.  121.  Gazan,  76  Ga.  79. 

3  Greenl.    Ev.   §  74;    Tompkins   v.  '  See   Richards  v.  Vaccaro,  67  Miss, 
Nichols,    53     Ala.    197;    Roberts     v.  516,  7  So,    Rep.   506;  cf.    Mobile  Sai 
Buckley,  145  N.  Y.  223,  39  N.  E.  Hep.  ings  Bk.  v.  McDonnell,  89  Ala.    134,  8 
966.     The  right  to  open  and  conclude  So.  Rep.  137. 


478 


KUKHKN    OF    PROOF. 


§  271 


creditor,  the  burden  to  prove  good  faith  is  on  the  grantee, 
even  without  evidence-of  fraud  on  the  part  of  the  grantee.1 
With  the  possible  exception  of  conveyances  to  a  wife  by 
a  husband,2  the  burden  of  proof,  in  cases  where  the 
instrument  is  valid  upon  its  face,  generally  rests  upon  the 
creditor  to  show  a  fraudulent  intent3  or  absence  of 
consideration.'  Where  it  is  proved  that  the  conveyance 
was  in  satisfaction  of  a  valid  indebtedness  at  a  fair  price, 
the  burden  to  prove  the  existence  of  a  secret  trust  or 
benefit  is  on  the  creditor.5  If,  however,  the  vendee  hav- 
ing the  burden  cast  upon  him,6  shows  that  valuable 
consideration  was  paid  for  the  transfer  of  the  prop- 
erty in  controversy,  the  burden  of  proof  shifts  and  the 
creditor,  in  order  to  recover,  must  prove  fraud  on  the  part 
of  the  grantee;  7  then  there  must  be  evidence  of  a  fraud- 
ulent intent  on  the  part  of  the  vendee,8  or  proof  that  he 
had  notice  of  the  vendor's  evil  design  9  Where  a  strong 
doubt  of  the  integrity  of  the  transaction  is  created,  the 
duty  of  making  full  explanation,  and  the  burden  of  proof 


1  Fisher  v.  Moog,  39  Fed.  Rep.  665. 

2  See  Chap.  XX. 

'  Kipp  v.  Lamoreaux,  81  Mich.  299, 
45  N.  W.  Rep.  1002  ;  Haynes  v. 
Rogers,  111  X.  C.  228,  16  S.  E.  Rep. 
416. 

4  See  §§  5,  6.     Fuller  v.   Brewster, 

53  M-l  859;  Cooke  v.  Cooke,  43  Md. 
588;  Anderson  v.  Roberts,  18  Johns. 

N     Y     515  :  Meblhop  v.    Pettibone, 

54  Wis.  653,  11  N.  W.  Rep.  55:5,  12 Id. 
448;  Starin  v  Kelly,  88  N.  Y.  121  ; 
Tompkins  v.  Nichols,  53  Ala.  lit?: 
Barkow  v.  Sanger,  17  Wva.  500,  ■>  X.  W. 
Rep.  16;  Kellogg  v.  Slauson,  11  X.  Y. 
804  .  1*11-. - \  v.  Gardner,  21  W.  Va. 
176  i  Hale  v.  Wes1  Va.  Oil  A;  Land 
Co.,  11  W  Va.  2.".i  :  Kruse  v.  Prindle, 
s  1  tragon   168  ;    Jones  \ .  Jones,   b57 

•   88  \    i:    Rep.    179;  Town 
Bend   \     Stearns,  82  X.   Y.  209.     But 


see  Francis  v.  Page,  97  Ala.  379,   11 
So.  Rep.  736. 

Pollak  v.  Searcy,  84  Ala.  259,  4 
So.  Rep.  187  ;  Bamberger  v.  School- 
field,  160  U.  S.  149;  16  S.  C.  Rep.  225. 

6  Throckmorton  v.  Rider,  42  Iowa 
86  ;  Spence  v.  Smith,  34  W.  Va.  697, 
12  S.  E.  Rep.  828. 

'  Ross  v.  Wellman,  102  Cal.  4,  36 
Pac.  Rep.  402  ;  Jones  v.  Simpson,  116 
U.S.  610,  6  S.  C.  Rep.  53s. 

8  Jones  v.  Simpson,  1 16  U.  S.  609,6 
S.  C.  Rep.  538  ;  Bluiner  v.  Bennett, 
44  Neb.  873,  63  N.  W.  Rep.  14 ;  Hinds 
v.  Keith,  6  C.  C.  A.  231,  57  Fed. 
Hep.  10;  Tillman  v.  Heller,  78  Tex. 
597,  14  S.  W.  Rep.  700  ;  Bambergerv. 
Schooltield,  150  LI.  S.  149,  16  S.  C. 
Rep.  225. 

•See  Chap.  XIV,  §§  196,  197. 


§  271a  B(  »OKS   OF    A.CCOUNT.  479 

to  sustain  the  transfer,  rests  with  the  insolvent.1  And 
where  a  debtor  conveys  all  his  unexempt  property  to  a 
member  of  his  family  in  consideration  of  alleged  past 
services,  a  case  is  made  out  requiring  full  explanation  on 
the  part  of  the  purchaser  in  respect  to  the  consideration 
and  the  honesty  of  the  transaction.2  The  same  rule 
applies  where  the  debtor  takes  the  title  to  property  as 
trustee  for  his  daughter:1  The  fraud  must  usually  be 
established  by  the  party  alleging  it  by  a  fair  preponder- 
ance of  proof.4 

§  271a.  Books  of  account. — Judgment-creditors  can  fre- 
quently make  use  of  entries  in  the  debtors'  books  of 
account.  While  such  books  are  not  ordinarily  received 
in  evidence  in  an  action  at  law  to  recover  a  debt,  except 
under  peculiar  circumstances,  or  as  against  the  party  who 
kept  the  books,  vet  in  an  action  in  equity  they  are 
admitted  not  only  against  the  judgment-debtor,  whose 
transactions  they  are  supposed  to  record,  but  also  against 
those  deriving  property  from  him,  as  to  such  entries  as 
were  made  while  such  property  was  still  in  his  possession. 
The  New  York  Court  of  Appeals  says :  "  Although  the 
books  are  not  competent  as  against  a  creditor  seeking  to 
recover  a  judgment  for  his  debt,  they  maybe  introduced 
by  a  judgment-creditor  to  support  an  attack  in  equity 
upon  the  transfer  of  property  by  the  judgment-debtor  to 
a  third  person,  claiming  a  valid  debt  as  the  consideration 
for  the  transfer.  Entries  made  in  the  ordinary  course  of 
business,  while  the  debt  in  dispute  was  in  process  of  con- 
traction, are  competent  as  to  another  creditor,  for  the 
purpose  of  showing  that  there  was  no  such  debt." 

1  Clements  v.   Moore,  6  Wall.   315.  »  Lavelle    v.    Clark    (Ct.    App.    Kj 
See  also  Piddock    v.    Brown,    3    P.      1896)38  8.  W.  Rep.  181. 

Wms.    289;     Wharton     v.     May,    5  *  Brown  v.  Herr,  21  Neb.  128,  31 N. 

Ves.  49.  W.  Rep.  246. 

2  Welch  v.   BradleY,  45  Minn.  540,  'White    v.    Benjamin,    L50   N.    Y. 
48N.W.  Rep.  440.  266,  44  N.    E.  Rep.  956.     See  Loos  v. 


4So 


SECRET    TRUST. 


§  272 


.^  272.  Secret  trust. — The  most  common  forms  of  fraudu- 
lent conveyances  are  those  in  which  a  secret  trust  or 
benefit  is  reserved  for  the  debtor.  Manifestly  the  law 
will  not  permit  an  insolvent  to  sell  his  land  and  convey  it 
without  apparent  reservation,  and  yet  secretly  l  retain  for 
himself  the  right  to  occupy  it  for  a  limited  time  for  his 
own  benefit.2  A  transfer  of  this  character,  even  though 
founded  upon  a  good  consideration,  lacks  the  elements 
of  good  faith,  is  not  what  it  purports  to  be,  conceals  the 
real  agreement  existing  between  the  parties,  confers  upon 
the  debtor  the  enjoyment  of  a  valuable  right  which  it  is 
intended  to  place  beyond  the  reach  of  creditors,  and  con- 
stitutes a  fraud  upon  them.3  "  A  collusive  transfer, 
placing  the  property  of  a  debtor  out  of  the  reach  of  his 
creditors,  while  securing  to  him  its  beneficial  enjoyment, 
is  not  to  be  tolerated."  '  It  is  immaterial  whether  the 
trust  is  express  and  apparent  upon  the  face  of  the  deed 
or  is  implied  from  extrinsic  circumstances.5      The  whole 


Wilkinson.  110  N.  Y.  209,  18  N.  E. 
Rep.  99;  Fleming  v.  Yost,  137  Ind. 
95,36  N.  E.  Rep.  705;  Bicknell  v. 
Mellett,  160  Mass.  328,  35  N.  E.  Rep. 
1 130.  Entries  of  payments  of  money 
made  to  a  grantor  at  various  times, 
the  entries  being  made  at  the  time  of 
the  payments,  are  admissible  as  a 
part  of  the  resgestoe  to  illustrate  and 
bring  out  the  whole  transaction  in 
regard  to  the  transfer  and  the  con- 
sideration for  it.  Fleming  v.  Yost, 
137  Ind.  lir>,  30  X.  E.  Rep.  7u5. 

1  strattou  v.  Putney,  •'.::  X.  II  577, 
1  Atl.  Rep  876;  Kain  v.  Larkin,  4 
A.pp.  Div.  <N.  \.>  -'nil,  38  N.  Y .  Supp. 
546. 

-  Lukins  v.  Aird.  i;  Wall.  79 ; 
Birmingham  Dry  Goods  Co.  v.  Roden, 
110    Ala.  ail.  sub  mini,  Birmingham 

I  »i  v  < ; I-  1  'o   v.  Kelso,    [8  80,   Rep. 

185.  See  VVooten  v.  Clark,  28  Miss. 
76 .  An  l iiit  \ .  <  lommercial  &  R.  R, 
Bank,  17   Miss.   394  ;  Towle   \.   Boit, 


14  N.  H.  61  ;  Paul  v.  Crooker.  8  N. 
H.  288 ;  Smith  v.  Lowell,  6  N.  H. 
67  ;  Hills  v.  Eliot,  12  Mass.  26 ; 
Fulkerson  v.  Sappington,  104  Mo.  472, 

15  S.  W.  Rep.  941;  First  Nat.  Bank  of 
Mankato  v.  Kansas  City  Lime  Co.,  43 
Mo.  App  561 ;  Justh  v.  Wilson,  19  Dist, 
Col.  532  ;  Lang  v.  Stock  well,  55  N.  H. 
561. 

3  See  §  22.  Young  v.  Heermans, 
66  N.  Y.  382  ;  Crouse  v.  Frothingham, 
27  Hun  (N.  Y.)  125  :  Dean  v.  Skinner. 
42  Iowa  41S;  Sims  v.  Gaines,  64  Ala. 
392-397:  Rice  v.  Cunningham  116 
Mass  4C>9  :  Giddings  v.  Sears,  115 
Ma>s.  505;  Denl  v.  Ferguson,  182  U. 
S.  67.  See  Macomber  v.  Peck,  39 
Iowa  351  ;  Innis  v.  Carpenter,  4  Col. 
App  30,34  Pac.  Rep.  Ktll  ;  Bostwick 
v.  Blake,  145  111.  85.  31  N.  E.  Rep.  38. 

'  Crawford  v.  Xeal,  144  U.  S.  595  : 
12  S    ('.  Rep.  759. 

»  Coolidge  v.  Melvin.  12  X.  II.  510; 
Rice  v.  ( lunningham,  116  Mass.  469. 


§273  INSOLVENCY    OP    DEBTOR.  481 

estate  of  the  debtor  is  in  theory  of  law  liable  for  the  pay- 
ment of  his  debts,  and  it  is  fraudulent  to  conceal  or  secrete 

any  part  of  the  insolvent's  property  from  his  creditors.' 
Where  a  father  caused  foreclosure  proceedings  to  be 
brought  against  himself,  and  his  son  became  the  pur- 
chaser, and  the  creditors  of  the  latter  proceeded  to  acquire 
such  interest,  it  was  held  that  the  father  would  not  be 
permitted  to  give  evidence  of  a  secret  trust  in  the  son  for 
the  benefit  of  the  father.2  So  a  secret  agreement  upon 
a  sheriff's  sale  to  hold  the  property  in  trust  for  the 
debtor  renders  the  sale  void  even  as  to  subsequent 
creditors.3 

Secret  trusts  are  manifestly  most  difficult  to  establish 
in  court.  Surrounding  circumstances  and  the  relations  of 
the  parties  and  their  conduct  and  bearing  may  be  given 
in  evidence.  Sometimes  the  isolated  bits  of  evidence 
shadowing  forth  the  secret  arrangement  or  benefit  seem 
most  inconclusive,  and  unsatisfactory,  but  when  grouped 
together  and  considered  as  a  whole,  the  fraudulent  device 
can  be  made  manifest. 

§  273.  Proof  of  insolvency  of  debtor. —  The  term  insolvent 
is  usually  applied  to  one  whose  estate  is  not  sufficient  to 
pay  his  debts,4  or  a  person  who  is  unable  to  pay  all  his 
debts  from  his  own  means,5  and  cannot   proceed  with  his 

1  Sparks    v.  Mack,    31    Ark.    670  ;  5  Riper  v.  Poppenhausen,  4:5  N.  Y. 

Paul  v.  Crooker,  8N.  H.  288  ;  Moore  v.  68  ;  Marsli  v.  Dunckel,  25  Hun  (N.  1 

Wood,  100  111.  454  ;  Conover  v.  Beck-  169,  170.     See  Buchanan  v.  Smith,  16 

ett,  38N.  J.  Eq.  384.    See  Chap.  II.  Wall.  308  ;    Herrick  v.    Borst,  4   Hill 

-Conover   v.   Beckett,  38  N.  J.  Eq.  (N.  Y.)652;  Brouwer  v.   Earbeck,  9 

384.  N.  Y.    594;  Peabody   v.    Knapp,    153 

3  Bostwick  v.  Blake,  145  111.  85.  34  Mass.  242,  26N.  E.  Rep.  696;  Sabin  v. 
N.  E.  Rep.  38;  Grimes  Dry  Goods  Columbia  Fuel  Co..  25  Ore.  15,  34  Pac. 
Co.  v.  Shaffer,  41  Neb.  112,  59  N.  W.  Rep.  692;  Holcombe  v.  Ehrmann- 
Rep.  741  ;  Rucker  v.  Moss,  84  Va.  634,  traut,  46  Minn.  397.  49  X.  W.  Rep. 
5  S.  E.  Rep.  527.  191  ;  Chipman  v.  McClellan,  159  Mass, 

4  Mitchell  v.  Mitchell,  42  S.  C.  483,  368,  34  X.  E.  Rep.  379;  Sacr]  v 
20  S.  E.  Rep.  405  ;  Akers  v.  Rowan,  Lobree,  84  Cal.  46,  23  Pac.  Rep.  1088 
33  S.  C.  470,  12  S.  E.  Hep.   165;  Toof  Wager  v.  Ball,  16  Wall.  599. 

v.  Martin,  13  W^all.  47. 
31 


482 


INSOLVENCY    OF    DEBTOR. 


273 


business  in  the  usual  course  of  trade.1  On  the  other 
hand,  a  party  is  solvent  who  has  property  subject  to  legal 
process  sufficient  to  satisfy  all  his  obligations.2  A  find- 
ing that  a  man  was  "  financially  embarrassed"  is  not 
equivalent  to  a  finding  of  insolvency.  One  may  be  finan- 
cially embarrassed  and  yet  be  possessed  of  abundant 
property,  out  of  the  proceeds  of  which,  when  realized  upon, 
his  debts  could  be  paid.3  The  inquiry  is,  has  the  debtor 
such  means  that  payment  may  be  enforced  at  law?4  An 
embarrassed  debtor  may,  of  course,  effect  any  sales  of  his 
property  which  he  deems  advantageous,  to  enable  him  to 
raise  the  necessary  means  for  paying  off  his  creditors, 
and,  within  reasonable  restrictions,  to  prevent  its  sacrifice 
at  forced  sale  under  execution,  and  for  this  purpose  the 
law  generally  recognizes  his  right  to  sell  either  for  cash 
or  on   credit.5 

Proof  of  insolvency  of  the  debtor  at  the  date  of  the 
alienation  is  frequently  of  vital  importance  in  creditors' 
suits/'  Evidence  of  the  insolvency  of  the  vendor  a  year 
after  the  sale  is  not  material,7  and  where  a  debtor  has  prop- 
erty sufficient  to  satisfy  all  his  creditors  he  cannot  be  said 
to  be  insolvent  though  he  lacks  sufficient  ready  money  to 


1  Curtis  v.  Leavitt,  15  N.  Y.  141. 
Berrick  v.  Borst,  4  Hill  (N.  Y.) 
652  approved,  Walkenshaw  v.  Per- 
zel,  32  How  I',.  ,'\  Y)240  ;  Brouwer 
x  Harbeck,9  N.  f.594.  See  Eddy  v. 
Baldwin,  32  Mo.  374  ;  McKown  v. 
Furgason,  17  [owa  637.  The  term 
"open  and  notorious  insolvency"  is 
said  I"  imply  not  the  want  of  suffi 
>i«iit  property  to  pay  all  of  one's 
debts,  but  the  absence  of  all  property 

wit  1 1  in  reach  of  the  law,  applicable  to 

the  payment   of  any  debt.     Bardesty 
v,  Kinworthy,  8  Blackf.  (Ind.)  :501. 

Jacobs  \.  Morrison,  136  N.  Y    104, 
82  S.  E.  Rep.  58 

■  Beid    v.   Lloyd,  52  Mo.    A.pp.  282 
I  Dougherty   v.  <  looper,   77  Mo.  531. 


See  Hickey  v.  Ryan,  15  Mo.  62  ;  Buck- 
ner  v.  Stine,  43  Mo.  407;  Waddams 
v.  Humphrey.  22  111.  663  ;  Nelson  v. 
Smith,  28  111.  495.  In  Jacobs  v.  Morri- 
son, 136  N.  Y.  104,  32  N.  E.  Rep.  552, 
the  court  says:  "The  finding  that 
the  grantor  was  '  financially  embar- 
rassed '  docs  not  affect  his  conveyance, 
and  certainly  is  not  equivalent  to  a 
finding  of  insolvency.  One  may  be 
■  financially  embarrassed  '  and  yet  be 
possessed  of  abundant  property,  oul 

of  the  proceeds  of    which,    when  real- 
ized upon,  his  debts  could  be  paid." 
•  Ncve.s  v.   Back,    138  [nd.  260,  37 

V   E.   Kep.  791,  and  cases  cited. 

1  Martin       v.     Fox,     40     Mo.      App. 
664. 


73 


[NSOLVENCS     OF    DEBTOR. 


meet  maturing  obligations.1  How  can  the  evidence  upon 
this  point  of  solvency  be  best  adduced?  It  is  the  con- 
dition of  the  debtor  and  not  his  belief  as  to  solvency  that 
the  law  regards.2  The  rule  has  been  formulated  that 
"  the  opinion  of  a  witness  that  a  person  is  solvent  or 
insolvent  is  inadmissible."3  In  Denman  v.  Campbell4 
this  question  was  put:  "Is  Donal  Campbell  a  man  of 
responsibility?"  and  the  answer  given  under  objection 
was  :  "  So  far  as  I  know,  he  was  not  responsible."  The 
reception  of  this  evidence  was  held  to  be  error.  The  fact 
that  a  man  is  reputed  among  his  neighbors  to  be  worth  a 
given  sum  does  not  prove  that  he  is.  nor  is   it  admissible 


Smith    v.   (  iollins,  94  Ala.  3 

S.     Rep.  334. 

-  Austin  v.  First  Nat.  Bk..  47  111. 
App.  225. 

3  Lawson  on  Expert  &  Opinion  Evi- 
dence, p.  515.  Citing  Brice  v.  Lide, 
30  Ala.  647  ;  Nuckolls  v.  Pinkston.  88 
Ala.  615  :  Royall  v.  McKenzie.  35 
Ala.  363.  But  see  Breckinridge  v. 
Taylor,  5  Dana  iKv.  i  114:  Crawford 
v.  Andrews.  6  Ga.  244 :  Riggins  v. 
Brown.  12  Ga.  273;  Sherman  v. 
Blodgett,  28  Vt.  149. 

*  7  Ban  X.  Y.  88.  In  Babe  »ck  v. 
Middlesex  Sav.  Bank.  28  Conn.  306, 
the  court  said  :  "We  think  that  the 
court  below  erred  in  receiving  the 
opinion  of  the  judge  of  probate  a-  I 
the  pecuniary  ability  of  H.  D.  Smith, 
for  the  purpose  of  rebutting  the  evi- 
dence adduced  by  the  defendant  - 
show  that  he  whs  destitute  of  prop- 
erty. The  witness  did  not  profes~  t<  i 
have  any  knowledge  whatever  in  re- 
gard to  the  property  or  pecuniary  cir- 
cumstances of  Smith  or  any  meai 
forming  a  judgment  or  opinion  on 
that  subject,  excepting  from  the 
style  in  which  lie  and  his  family 
lived,  the  manner  of  his  leaving  the 
State,  and  the  fact  that  he  had  made, 


before  the  court  of  probate,  do  <li-- 
-ure  of  his  property  under  oath,  in 
the  proceedings  in  insolvency  against 
him.  Although,  as  to  the  value  of 
property  we  resort  to  the  judgment 
or  opinion  of  persons  acquainted  with 
it.  its  exi-tence  and  ownership 
facts  to  he  proved,  whether  directly 
or  otherwise,  like  other  facts,  by  the 
knowledge  of  wit]  1   not  by 

their  opinions,  inferences  or  surn 
derived  from  whatever  source.     The 
present  ie  not  like  the  cases  where  an 
opinion  i-  sought  of    an  expert;  or 
those  in  which,  for  certain   purpoG 
the    reputation    of    a    pen  -    to 

pecuniary  ability  may  be  shown  )<y 
witnesses  who  have  no  personal 
knowledge  of  his  situation.  Tin-  in- 
quiry here  was  not  whether  Smith 
-  reputed  t"  be,  hut  whether  he 
was  m  fact,  destitute  of  property. 
On  such  an  inquiry  nothing  could 
more  dangerous  than  t  the 

opinions  of  persons  founded  on  such 
fallacious  gro  amon  run 

or  a  man's  pr  his  cir- 

CUlii- 

opinions  of  others,  or.  what  in  many 
-  -      -  relied  on,  his 

style  '>r  manner  of  living."' 


|S  i  [NSOUS  l\'  V    I  'I     DEBTOR.  §  J~3 

upon  the  issue  of  his  making  a  fraudulent  disposition  of 
his  property.1  In  a  case  which  arose  in  New  York,  in 
which  the  primary  and  all-important  question  was  whether 
a  corporation  was  solvent  or  not,2  many  of  the  witnesses 
examined  on  the  point  expressed  nothing  more  than  an 
opinion  upon  the  subject,  without  referring  to  any  facts 
from  which  such  opinion  was  formed.  It  was  very  prop- 
erly ruled  that  such  evidence  was  entirely  insufficient,  and 
could  never  form  a  basis  for  any  action  of  the  court. :; 
Evidence  that  a  man  was  generally  reputed  to  be 
insolvent  is  competent  upon  the  theory  that  the  fact  to 
be  proved  is  of  a  negative  character,  scarcely  admitting 
of  direct  and  positive  proof.4  In  the  great  majority  of 
cases,  it  would  be  impracticable  and  exceedingly  tedious 
and  expensive  to  procure  any  other  proof  of  insolvency 
than  that  of  general  reputation  in  the  community  where 
the  debtor  resides  and  is  known."'  If  the  witness  is  able 
to  state  numerous  facts  touching  the  property  of  the 
debtor,  and  the  amount  of  his  indebtedness,  which  show 
a  very  full  and  intimate  acquaintance  with  his  affairs  and 
his  utter  insolvency,  he  may  be  permitted  to  answer  a 
question  whether  or  not  the  debtor  was  able  to  pay   his 

1  Firsl   Nat.  Bk.  v.   Buck,  56  Midi,  ami  his  means  of  knowing  the  situ- 

W.  Rep.  57.  ation  ami  circumstances  of  the  l>ail ; 

1  On  the  question  of  the  insolvency  certainly  there  could  then  be  no  ob- 

<>f  a  corporation,  evidence  of  a  notary  jection  to  his  giving  hi>  opinion  from 

that    In'   had  protested  for   non-pay-  his  knowledge  of  the  bail,  and  of  his 

ment commercial  paper  due  by  it  is  affairs,    what    he    thought    he    was 

admissible.     Mi-h  v.  Mam,  si  Md.  36,  worth." 

:?]  Atl.  Rep.  T'.i'..  'Nininger   v.  Knox,  8  Minn.    148; 

Brundredv.  Paterson Machine  Griffith  v.  Parks,  32  Md.  1.  Crawford 

1        95      Compare  Ninin-  v.  Berry,  <">  <iill  &  J.  (Md.)  63  ;    Met- 

Knox.  8  Minn.  140;  Andrews  calf  v.  Munson,  in  Mien  (Mass.)   198: 

aes,  10  Ala.  460.     In  Sherman  v.  Hank  of   Middlebury   \.  Rutland,  38 

Blodgetl    28Vt.   149,  the  court  said :      Vt.    114;     I v.    Kilburn,   :)    Gray 

" The  solvency  of  an   individual  is  a  Mass     594 

'"•<"                  somewhat  in  opinion  ;  Griffith   v.  Parks,  82  Md.  1;  Wat- 

and.  in  the  present  case,  the   witness  kin-  v.   Wbrthington,  2    Bland  (Md.) 

had    stated    whal    property    the    bail  509,540,541. 

owned  at   the  time  he  entered    hail 


§  2;4  INSOLVENCY    «  >F    VENDEE.  |.'-:, 

debts,  at  a  particular  time,  in  the  usual  course  of  business. 
This  is  considered  as  calling  for  a  fact,  and  not  for  the 
opinion  of  the  witness.1  We  may  here  state  that  there 
is  no  presumption  of  law,  arising  from  knowledge  of 
insolvency,  that  the  assignee  knew  of  the  debtor's  inten- 
tion to  defraud  creditors.2  Return  of  an  execution  nulla 
bona  is  prima  facie  evidence  of  insolvency.3  But  the 
mere  fact  that  a  vendee  knows  that  his  vendor  was 
insolvent  will  not  overturn  a  conveyance  founded  upon 
adequate  consideration.1  Where  one  engaged  in  com- 
mercial pursuit  permits  his  commercial  paper  to  be  dis- 
honored, and  his  property  to  be  attached,  this  is  evidence 
of  insolvency.5  And  a  statement  that  a  party  is  indebted 
to  clivers  persons  in  considerable  sums  of  money,  which 
he  is  unable  to  pay,  is  a  declaration  of  insolvency. 
"  When  a  person  is  unable  to  pay  his  debts,  he  is  under- 
stood to  be  insolvent."6 

§274.  Insolvency  of  vendee. —  The  ability  of  the  vendee 
to  pay  the  purchase-money  for  the  property,  before  and 
at  the  time  of  the  transaction,  is  a  material  circumstance 
for  the  consideration  of  the  jury,  and  testimony  upon 
that  point  should  be  admitted.7  The  purchaser  may 
testify  as    to  the  sources   from  which    he    procured    the 

1  Thompson  v.  Hall, 45 Barb.  (N.Y.)  25  N.  E.  Rep.  L33;  Ogden  State  Bank 
210.  See  Blanchard  v.  Mann,  1  Allen  v.  Barker,  12  Utah  27,  10  Pac.  Rep. 
(Mass.)  433;    Iselin   v.   Peck,  2  Rob.      769. 

(N.  Y.)  639.  '  Erdall   v.  Atwood,    7!)  Wis.   1.    17 

2  Cannon  v.  Young,  89  N.  C.  264.  N.  W.  Rep.  1124:  Warner  v.  Little- 
On  the  issue  whether  a  conveyance  field,  89  Mich.  329,  50  N.  W.  Rep.  721; 
of  real  estate  is  fraudulent  as  to  cred-  National  Bk.  of  Oshkosh  \.  Nat.  Bk. 
itors,  evidence  of  the  register  of  deeds  of  Ironwood,  LOO  Mich.  485,  59  N.  W  . 
for  the  district   in  which   the  estate  Rep.  231. 

lies,  that  he  has  searched  the  records  ■''Tuthill  v.  Skidmore,  124  N    Y.  148, 

of  the  registry,  and  found  that  there  26  N.  E.   Rep.  348;   Booth  \.    Powers, 

was  no  other  property   standing   in  5(5  N.  Y.  22,  32. 

the  name  of  the  grantor,   is  admis-  'Cunningham   \.  Norton,  125  1  .8 

sible.    Bristol  Co.  Sav.  Bank  v.  Heavy,  77,  DO,  8  S.  C.  Rep.  804. 

128  Mass.  298.  '  Johnson  v.  Lovelace,  51  Ga.  19. 

3  Warmoth  v.  Drydeu,  125  End.  355, 


(.86  GENERAL  REPUTATION.  £-75 

money.1  For  the  purpose  of  showing  that  a  mortgage 
is  fraudulent,  it  is  competent  to  prove  that  in  the  country 
where  the  mortgagee  was  bom  and  grew  up,  and  con- 
tinued to  reside,  he  was  never  known  to  have  any  property 
or  means,  or  to  be  engaged  in  any  business,2  and  was 
not  in  a  position  to  lend  money.3  So  the  creditor  may 
show  that  the  grantee  was  a  married  woman,  having  no 
separate  estate,  notoriously  poor,  and  destitute  of  means 
to  make  the  payment  claimed  or  contemplated.4  Testi- 
mony of  this  kind  is  often  of  vital  importance  to  cred- 
itors, as  nothing  is  more  common  or  more  persuasive  to 
the  minds  of  a  court  or  a  jury  as  to  the  presence  of  fraud 
than  proof  that  the  debtor's  property  has  passed  into  the 
hands  of  an  irresponsible  figurehead,  who  was  not  pos- 
sessed of  the  means  with  which  to  purchase  it,  and  had 
no  use  for  it. 

The  schedules  of  an  insolvent  debtor  are  not  com- 
petent evidence  against  a  third  party,  to  prove  the 
indebtedness  of  the  assignor.5 

.^  275.  General  reputation.  —  Evidence  of  the  general 
reputation  of  all  the  parties  to  an  alleged  fraudulent 
transaction,  as  to  their  credit  and  pecuniary  responsibility, 
may  be  admitted."  In  this  respect  the  general  reputation 
of  the  grantor  is  a  fact  which,  with  other  circumstances, 
has  some  tendency  to  show  that  the  grantee  understood 
his  motives  in  making  the  conveyance,  and  possibly  par- 
ticipated   in    his    unlawful     purpose;    and    proof    of    the 


Tuckwood  v.    Eanthorn,  '17   Wis.  ■'■  Halm    v.   Penney,    00   Minn.  4S7, 

BO  N.  W.  Rep  705.  62  N.  W.  Rep.  1129. 

Stebbins  v.  Miller,  12  Allen  (Mass.)  6  Hall   v.    Ritenour,    2  West.   Rep, 

496;  sub  nom.  Gordon  v.  Ritenour,  87 

Demerit!  \    Miles,  22  N.  !l.  523.  Mo.  54;  Ferbrache  v.  Martin  (Idaho, 

•  Lmsden    v.  Manchester,   10  Barb.  1892)  32  Pac.  Rep.  252 ;  Hahn  v.  Pen- 

N    f.)  168.     Seee  P.  Danby  v.  Sharp,  aey,   60  .Minn.   487,  62   N.    W.  Rep. 

2  MacAr   1  D  C.)  185  .  Stevens  v.  Dill-  1129. 
man,  86  111.  288  1  Castle  v.  Bullard,28 
Bow 


£2/6  CONCERNING    RES   GESTAE.  4X7 

grantee's  want  of  credit  would  have  a  tendency  to  show 
that  the  conveyance  was  not  made  in  good  faith, 
especially  if  made  in  reliance  upon  his  future  ability  to 
pay.1  Evidence  that  the  grantee's  general  credit  was 
bad,  though  somewhat  remote,  cannot  be  said  to  be  incom- 
petent." Where  fraud  is  charged  and  sought  to  be 
established  by  proof  of  circumstances,  evidence  of  general 
good  character  is  admissible  to  repel  it,  as  in  criminal 
cases.3  General  reputation  of  doing  business  on  bor- 
rowed money  is  admissible  on  the  issue  as  to  whether  the 
defendant  had  reasonable  cause  to  believe  the  debtor 
insolvent.4 

§  276.  Concerning  res  gestae.  —  Where  it  becomes  neces- 
sary to  discover  the  intention  of  a  person,  or  to  investi- 
gate the  nature  of  a  particular  act,  evidence  of  what  the 
person  said  at  the  time  of  doing  it  or  contemporaneous 
with  the  transaction5  is  received  as  part  of  the  res gestce? 
This  important  doctrine  has  been  liberally  applied  in  the 
United  States,  and  especially  in  the  class  of  litigation 
under  consideration.  The  declarations  must  relate  to 
the  act  which  they  characterize  ;  they  must  be  calculated 
to  unfold  the  nature  and  quality  of  the  facts  which  they 
are  intended  to  explain,  and  they  must  so  harmonize  with 


1  Sweetser  v.  Bates,   117  Mass.  468.  H.  R.  R.  R.  Co.,  95  N.  Y.   374  ;   Ban 

'-'  Cook   v.   Mason,    5  Allen   (Mass.)  over  Railroad  Co.  v.  Coyle,  55  Pa.  St. 

212.   Compare  Lee  v.  Kilburn,  3  Gray  396;  Loos  v.  Wilkinson,  1 10  X.  Y.  211, 

(Mass.)  594;  Metcalf  v.  Munson,  10  18  N.  E.  Rep.  99  ;  Moore  v.  Meacham, 

Allen  (Mass.)  491 ;  Amsden  v.  Man-  10  N.  Y.  207  ;  Schnicker  v.  People,  88 

Chester,  40  Barb.  (N.  Y.)  163.  N.  V.  192;  Swift  v.  Mass.  Mutual  Life 

3  Werts  v.  Spearman,  22  S.  C.  219;  Ins.  Co.,  03  N.  Y.  186  ;  Sanger  v.  Col- 

Bowerman   v.     Bowerman,    76    Hun  bert,  84  Tex.  668,   19  S.  W.    Rep.  863 ; 

(N.  Y.)  46,  27  N.  Y.  Supp.  579;  affi'd  Reiley  v.  Haynes,  38   Kara.  259,    16 

145  N.  Y.  598  ;  40  N.  E.  Rep.  163.  Pac.  Rep.  440  ;  Smith  v.  Nat.   Benefit 

4Killam    v.    Perce,   153  Mass.  502,  So,-.,    L33    N.   Y.  85,    25    \.    I..    Rep 

27  N.  E.  Rep.  520.  L97;  Jenne  v.  Joslyn,41  Vt.   178  ;  Bar- 

5  Flannery   v.   Van   Tassel,  131    X.  ton   v.  Lyons,  97  Tenn.    L80,  36  S.  W. 
Y.  639,  30  N.  E.  Rep.  24.  Rep.  851. 

6  Waldele  v.   New  York  Central  & 


488  DECLARATIONS    BEFORE   SALE.  §  277 

those  facts  as  to  form  one  transaction.1  The  declara- 
tions must  grow  out  of  the  principal  fact  or  transaction 
illustrate  its  character,  be  contemporaneous  with  it  and 
derive  some  degree  of  credit  from  it.2  Thus  a  wife  may 
employ  her  husband  as  an  agent,  and  his  utterances  while 
so  acting,  in  taking  a  bill  of  sale,  constitute  part  of  the 
res  gestce  and  are  competent  evidence  for  the  wife.3  The 
declarations  accompanying  an  act  are  admissible  as 
explanatory  of  the  character  and  motives  of  the  act.4  They 
in  this  way  become  part  of  the  res  gestce.  The  declarations 
of  the  grantor  made  to  the  notary  at  the  time  of  executing 
the  deed  may  be  shown  ; 5  so  may  the  statement  of  the 
debtor  to  a  clerk  as  to  who  is  employing  him.0  It  is  the 
duty  of  the  jury  to  determine  the  weight  of  these  decla- 
rations, by  ascertaining  whether  they  were  sincere,  or 
were  made  to  withdraw  attention  from  the  real  nature  of 
the  act,  or  to  hide  the  real  purpose  of  it.7  The  declara- 
tions which  are  merely  narrative  of  a  past  transaction  are 
not  admissible  as  part  of  the  res  gesta',s  but  the  declara- 
tions of  a  debtor  prior  to  the  alleged  inception  of  the 
fraud  are  admissible  in  favor  of  the  grantee.9  The  test 
is  as  to  whether  the  testimony  offered  throws  light  upon 
the   transaction.111 

S  277.  Declarations  before  sale —  Realty  and  personalty.  — 
The  conduct  and  declarations  of  the  grantor11  respecting 


Smith    v.    Nat.    Benefit    Soc,  L23  •  Sweet  v.  Wright,  57  Iowa  510.  10 

N.  Y.  85,  25  N.  K.  Rep.  197;  Tilson  v.  N.  W.  Rep.  870. 

Terwilliger,  56  N.  Y.  277.  7  Potter  v.  McDowell,  81  Mo.  74. 

Bush   v.   Roberts,     ill    N.   Y.  283,  B  Waldele  v.  New  York  Central  & 

is  N.  E.  Rep  ::;.':  Lund  v.  Inhabitants  H.  R.  R.  R.  Co.,  95  N.  Y.  274 

of  Tyngsborough,  9  Cush.  (Mass.)  86.  aS\van  v.  Morgan,  88  Hun  (N.  Y.) 

K.IK    v.  Campbell,    1    Keyes  (N.  880,  84  N.  Y.  Supp.  829. 

">Ogden    State  Bk.   v.   Barker,    12 

'See  Stewart  v.  Fenner,  81  Pa.  St.  Utah  27, 40  Pac.  Rep.  768. 

17K  m  )' I  fare  v.  Duckworth,  4  Wash.  470, 

lei     ■    Free.    114   Wo.  860.  31  80  Pac.  Rep.   724.    See  Breathwil  v. 

s.  W.  Rep  Bank  of  Fordyce,  60Ark.35,  28  S.  W. 


%^77 


DECLARATK  )NS    BEFi  IRE    s  U.K. 


the  estate  conveyed,  tending  to  prove  a  fraudulent  int.  n 
tion  on  his  part  before  the  conveyance,  arc  proper  evi- 
dence for  the  jury  upon  an  inquiry  into  the  validity  of 
the  conveyance  by  a  creditor  or  subsequent  purchaser, 
who  alleges  that  it  is  fraudulent.1  This  evidence  is  con- 
sidered competent  to  prove  that  the  conveyance  was 
fraudulent  on  the  part  of  the  grantor,  and  does  not  preju- 
dice the  grantee,  who  is  not  affected  if  he  is  a  bona  fide 
purchaser  for  a  valuable  consideration.  The  evidence  is 
not  admissible  against  him  where  there  is  a  valuable  con- 
sideration for  the  transfer  in  the  absence  of  proof  of 
conspiracy.2  To  avoid  the  transaction  as  convinous  frau- 
dulent intent  must,  as  we  have  said,  be  shown  on  the 
part  of  the  grantee  as  well  as  of  the  grantor.3  So  admis- 
sions made  by  one  who,  at  the  time,  held  the  title  to 
land,  to  the  effect  that  he  had  contracted  to  sell  it  to 
another,  and  had  received  payment  for  it,  are  competent 


Rep.  511  ;  Chase  v.  Chase,  105  Mass. 
388;  Alexander  v.  Caldwell,  55  Ala. 
517  ;  Hiner  v.  Hawkins,  59  Ark.  303, 
27  8.  W.  Rep.  G5  ;  Seeleman  v.  Hoag- 
land,  19  Col.  231,  34  Pac.  Rep.  995. 

1  Bridge  v.  Eggleston,  14  Mass.  245, 
per  Parker,  C.  J.,  7  Am.  Dec.  209.  See 
Alexander  v.  Caldwell,  55  Ala.  517  ; 
Knox  v.  McFarran,  4  Col.  596  ;  Ran- 
degger  v.  Ehrhardt,  51  111.  101  ;  Chase 
v.  Chase,  105  Mass.  388  :  Stowell  v. 
Hazelett,  66  N.  Y.  635  ;  Davis  v. 
Stern.  15  La.  Ann.  177 ;  McKinnon  v. 
Reliance  Lumber  Co.,  63  Texas  31. 
See  Elliott  v.  Stoddard,  98  Mass.  145  ; 
McLane  v.  Johnson,  43  Vt.  48  ;  Grimes 
v.  Hill,  15  Col  359,  25  Pac.  Rep.  69*; 
National  Bank  v.  Beard,  55  Kan. 
773,  42  Pac.  Rep.  320:  Wyckoff  v. 
Carr,  8  Mich.  44.  In  Truax  v. 
Slater,  86  N.  Y.  632,  Earl,  J.,  is  re- 
ported in  memorandum  to  have  sail  I  : 
"  The  mere  declarations  of  an  assignor 
of  a  chose  in  action,  forming  no  part 
of  any  res  gestte,  are  not  competent 


to  prejudice  the  title  of  his  assignee, 
whether  the  assignee  be  one  lor  value, 
or  merely  a  trustee  for  creditors,  and 
whether  such  declarations  be  ante 
cedent  or  subsequent  to  the  assign 
ment."  See  Bush  v.  Roberts,  11!  N. 
Y.  278.  This  statement  of  the  rule 
would  seem  to  be  inaccurate.  While 
a  partj  holds  the  title  and  possession, 
it  would  (dearly  seem  to  be  compe 
tent  to  give  evidence  of  Ids  declara- 
tions made  while  the  possession  con- 
tinued as  characterizing  tin-  nature 
of  it.  Compare  in  this  connection 
Von  Kaehs  v.  Kretz,  72  X.  \  .  548  . 
Loos  v.  Wilkinson.  110  X.  V.  L95 ; 
Clews  v.  Kehr,  90  X.  Y.  688. 

-  Bush  v.  Roberts,  ill  X.  Y.  278, 
is  \.  |-;.  Rep.  ;:;-j;  B.T. Simon-Gregorj 
Dry  Goods  ( !o.  \.  McMahan,  til  .Mo. 
App.  r>00.  See  Flannerj  \  Van  Tas- 
sel, 127  N.  Y.  631,  27  X.    E.    Rep.   398. 

sCarpenter  v.  Muren,  42  Barb.  (N. 
Yj  300  ;    1  In- bes  v.   Mont}  .  24  towa 

499.       See  Chap.    XIV. 


490 


I  »E<   I.AKAI  [ONS    AFTER    SALE. 


§  278 


evidence  against  those  claiming  title  under  him.1  The 
principle  upon  which  such  evidence  is  received  is  that  the 
declarant  was  so  situated  that  he  probably  knew  the  truth, 
and  his  interests  were  such  that  he  would  not  have  made 
the  admissions  to  the  prejudice  of  his  title  or  possession 
unless  they  were  true.  The  regard  which  one  so  situated 
would  have  for  his  own  interest  is  considered  sufficient 
security  against  falsehood.  In  New  York,  after  some 
uncertainty,  the  rule  was  finally  settled2  that  such  admis- 
sions in  controversies  concerning  personal  property  would 
be  excluded.5 

£278.  Declarations  of  debtor  after  sale. —As  a  general 
rule  the  declarations  of  a  vendor,  after  transfer  and 
delivery  of  possession,  cannot  be  given  in  evidence 
against   the   vendee,4   unless  they  are    made  in   his  pres- 


1  Chadwick  v.  Former,  69  N.  Y.  404. 
The  declarations  of  the  debtor  prior 
to  the  inception  of  the  fraud  are 
admissible  in  favor  of  the  grantee. 
Swan  v.  Morgan,  88  Hun  (X.  Y.)380, 
34  X.  Y.  Supp.  829. 

8 Paige  v.  Cagwin,  7  Hill  (X.  Y.) 
361  ;  Chadwick  v.  Former,  69  X.  Y. 
407  ;  Truax  v.  Slater,  86  X.  Y.  630  ; 
Flannery  v.  Van  Tassel,  127  X.  Y. 
631,  '27  X.  E.  Rep.  393;  Dodge  v. 
Freedman'e  Sav.  and  Trust  Co.,  93  U. 
S.  379. 

( lhadwick  v.  Fonner.  69  X.  Y.  407. 

■  Tilson  v.  Terwilliger,  56  N.  Y.  -.'77  ; 
Cii\l.-rv.  McCartney,  40  X.  Y.  221; 
Chase  v.  Horton,  143  Mass.  118,  9 
N.  E.  Rep.  31  ;  Roberts  v.  Medbery, 
132  .Ma-.  106  .  Winchester  &  Part- 
ridge Mfg.  Co.  v.  Creary,  116  U.  S. 
161,  6  s.  C.  Rep.  869;  Burnham  v. 
Brennan,  71  N.  V.  597  ;  Ohio  Coal 
<  lompany  \ .  ! lavenport,  87  I )hio  St. 
194  :  <  loyne  v.  Weaver,  84  X.  Y. 
886;  Flannery  v.  Van  Tassel,   127  X. 

Y.  881  .  The  i'.i.'i     Miller  si Co.  v. 

Caaebeer, 58 Mo.  A.pp.  840;  sparks  v. 


Brown,  46  Mo.  App.  529;  Redfield 
v.  Buck,  35  Conn.  328  ;  Tabor  v.  Van 
Tassell,  86  X.  Y.  642  ;  Randegger  v. 
Ehrliardt,  51  111.  101  ;  Kennedy  v. 
Divine,  77Ind.493  ;  Garner  v.  Graves, 
54  Ind.  188;  Hirschfeld  v.  Wil- 
liamson, 1  West  Coast  Rep.  150  ; 
Meyer  v.  Va.  &  T.  R.  R.  Co.  16  Xev. 
343  ;  Sumner  v.  Cook,  12  Kan.  16a  ; 
Scheble  v.  Jordan,  30  Kan.  353.  In 
Holbrook  v.  Holbrook,  113  Mass.  76, 
Ames,  J.,  said  :  "It  has  often  ben 
held,  and  is  a  well-established  rule, 
that  upon  the  trial  of  the  question 
whether  a  particular  conveyance  was 
made  to  defraud  creditors,  it  is  not 
competent  to  show  the  acts  or  decla- 
rations of  the  grantor  after  the  con- 
veyance, to  impair  or  affect  the  power 
of  the  grantee."  Citing  Bridge  v. 
Eggleston,  14  Mass.  245  ;  Foster  v. 
Hall,  12  Pick.  (Mass.)  89;  Aldrich 
v.  Earle,  13  Gray  (Mass. )  578;  Taylor 
v.  Robinson.  2  Allen  (Mass.)  562.  See 
Clements  v.  Moore,  6  Wall.  299; 
Lewis  v.  Wilcox,  6  Xev.  215  ;  Thorn- 
ton   v.   Tandy,  39  Tex.    544;  Pier  v. 


§278 


DECLARATIONS    \l-  II.  R    SALE. 


491 


ence.1  Such  declarations  are  mere  hearsay,"  and  not 
made  under  the  sanction  of  an  oath  ;  the  debtor  bears  no 
relation  to  the  estate,  and  it  has  been  frequently  held  that 
exceptions  to  the  exclusion  of  this  class  of  evidence  should 
not  be  multiplied.  A  vendor  after  parting  with  his  prop- 
erty has  no  more  power  to  impress  the  title,  either  by  his 
acts  or  utterances,  than  a  mere  stranger.3  The  decla- 
rations of  a  former  owner  to  qualify  or  disparage  his  title 
are  only  admissible  when  made  while  the  title  is  in  him. 
Such  utterances  cannot  be  allowed  to  affect  a  title  which 
is     subsequently    acquired.4       The    declarations     of    the 


Duff,  63  Pa.  St.  59 ;  City  Nat  Bank  v. 
Hamilton,  34  N.  J.  Eq.  163  ;  Garrahy 
v.  Green,  32  Tex.  202 ;  Taylor  v. 
Webb,  54  Miss.  36  ;  Warren  v.  Wil- 
liams, 52  Me.  346 ;  Bullis  v.  Mont- 
gomery, 50  N.  Y.  358  ;  Watlswortb  v. 
Williams,  100  Mass.  126  ;  Silliman  v. 
Haas,  151  Fa.  St.  58,  25  Atl.  Rep.  72  ; 
McElfatrick  v.  Hicks,  21  Pa.  St.  402  ; 
Unangst  v.  Goodyear  I.  R.  Mfg.  Co., 
141  Pa.  St.  127,  21  Atl.  Rep.  499  : 
Tiscb  v.  Utz,  142  Pa.  St.  186,  21  Atl. 
Rep.  808  ;  Winchester  v.  Charter,  97 
Mass.  140  ;  Clark  v.  Wilson,  127  111. 
449,  19  N.  E.  Rep.  860  ;  Jones  v.  Sny- 
der, 117  Ind.  229,  20  N.  E.  Rep.  140; 
Thomas  v.  Black,  84  Cal.  221,  23  Pac. 
Rep.  1037;  Hicks  v.  Sharp,  89  Ga. 
311,  15  S.  E.  Rep.  314  ;  O'Donnell  v. 
Hall,  154  Mass.  429,  28  N.  E.  Rep.  349. 
Declarations  after  sale  but  before  de- 
livery were  held  admissible  as  against 
the  grantee.  Bovvden  v.  Spelhnan,  59 
Ark.  251,  27  S.  W.  Rep.  602.  Com- 
pare Truax  v.  Slater,  86  N.  Y.  630. 

1  Harris  v.  Russell,  93  Ala.  59,  9  So. 
Rep.  541. 

-  In  Winchester  &  Partridge  M  fg. 
Co.  v.  Creary,  116  IT.  S.  165,  the  court 
said  :  "The  plaintiff  was  itself  in  ac- 
tual possession,  exercising  by  its  agent 
full  control.  The  vendors,  it  is  true, 
entered  plaintiff's  service  as  soon  as 


the  sale  was  made  and  possession  was 
surrendered,  but  only  as  clerks  or 
salesmen,  with  no  authority  excepl 
such  as  employees  of  that  character 
ordinarily  exercise  What  they  might 
say,  not  under  oath,  to  others,  after 
possession  was  surrendered,  as  to  the 
real  nature  of  the  sale,  was  win  'II  \  ir- 
relevant. They  were  competent  to 
testify  under  oath,  and  subject  to 
cross-examination,  as  to  any  facts  im 
mediately  connected  with  the  sale,  of 
which  they  had  knowledge  ;  but  their 
statements  out  of  court,  they  nol  be- 
ing parties  to  the  issues  to  be  tried, 
were  mere  hearsay.  After  the  sale, 
their  interest  in  the  property  was 
gone.  Having  become  strangers  to 
the  title,  their  admissions  are  no  more 
binding  on  the  vendee  than  the  ad- 
missions of  others.  It  is  againsl  all 
principle  that  their  declarations,  mad.' 
after  they  had  parted  with  the  title 
and  surrendered  possession,  should  be 
allowed  to  destroy  the  title  of  their 
vendee." 

:iStewart  v.  Thomas,  35  Mo.  207. 

4Noyes  v.  Morrill.  L08  Mass.  396  . 
Stockwell  v.  Blarney,  129  Mass.  312; 
Welcome  v.  Mitchell,  81  Wis.  566,  51 
N.  W.  Rep.  1080.  But  where  both 
grantor  and  grantee  are  made  parties 
defendant,    such   subsequent    decla 


49- 


POSSESSION    AFTER   CONVEYAN<  I. 


&  2  79 


o-rantee  while  on  his  way  to  the  magistrate  to  obtain  the 
acknowledgment  of  the  grantor,  and  before  the  deeds 
were  delivered,  substantially  to  the  effect  that  the  deeds 
were  being  executed  because  of  apprehensions  on  the 
part  of  the  grantor  that  the  property  would  be  taken  to 
satisfy  the  debt  due  the  demandant,  were  excluded 
because  the  deed  had  not  been  delivered  at  the  time  the 
declarations  were  made,  and  it  was  clear  that  "  as  admis- 
sions in  disparagement  of  title,  the  evidence  was  not  com- 
petent." ! 

§  279.  Possession  after  conveyance.  —  Elsewhere  in  this 
discussion  the  failure  to  effect  a  change  of  possession  is 
shown  to  raise  either  a.  prima  facie  or  absolute  presump- 
tion of  fraud.2  As  proof  of  the  continued  possession  of 
the  vendor  is  competent  evidence  to  impeach  the  sup- 
posed transfer,  it  would  seem  to  follow  that  any  acts  or 
declarations  of  the  possessor  while  so  retaining  the  prop- 
erty must  also  be  competent  as  characterizing  his  posses- 
sion.3    So   long  as  the  debtor  remains  in    possession  of 


rations  were  admissible  to  show  fraud 
of  the  grantor,  although  not  admis- 
sible against  the  grantee.  See  also 
to  same  effect  McDonald  v.  Bowman, 
40  Neb.  269,  58  X.  W.  Rep. 704  ;  Wright 
v.  Towle,  (17  Mich  255,  U  N.  W.  Rep. 
578  :  Claflin  v.  Ballance,  91  Ga.  ill.  18 
8  I.  Rep.  309.  They  are  not  admis- 
sible against  the  grantee  eveo  where 
there  is  evidence  tending  to  show  con- 
spiracy. Scofield  v.  Spauldlng,  54 
Hun  (N.  Y.i  583,  7  X.  V.  Sup,,  927  : 
Harris  v.  Russell,  93  Ala.  59,  9  80.  Rep. 
541. 

Stockwell    v.    Blarney,    129  Mass. 
312 

1  !hap    XVI 1.  .:.■  848  352 

Eirby    v.   Bfasten,    70  X.  C.  540; 

Carnahan  v.  W 1,2  Swan  (Tenn.) 

502  :  fates  «  fates,  76  X.  C.  142; 
Saenschen  v.  Luchtemeyer,  19  Mo. 
51  :  '  'ani.v  v    ( iarney,  7  Bax.  (Tenn.) 


287  ;  Tedrowe  v.  Esher,  56  Ind.  447  ; 
United  States  v.  Griswold,  8  Fed.  Rep. 
560:  Caboon  v.  Marshall.  25  Cal.  202  : 
Oatis  v.  Brown,  59  Ga.  716;  Mills  v. 
Thompson,  72  Mo.  309  ;  Adams  v. 
Davidson.  10  X.  V.  309  :  Xeal  v.  Fos- 
ter. 36  Fed.  Rep.  34  ;  United  States  v. 
Griswold.  7  Sawy.  316;  Bowden  v. 
Spellman,  59  Ark.  251.  27  S.  W.  Rep. 
602.  See  Knight  v.  Forward.  63  Barb. 
(N.  V.i  311  ;  Hilliard  v.  Phillips,  si 
N.  C.  104,  Smith,  C.  J.,  dissenting 
upon  the  ground  thai  the  declarations 
in  this  latter  case  did  not  qualify  or 
explain  the  possession,  nor  disparage 
declarant's  title,  but  related  to  a  pre- 
existing  facl  to  impeach  the  validity 
and  effect  of  his  own  act  in  convey- 
ing title  lt>  incompetency  for  such 
a  purpose  he  considered  fully  estab- 
lished by  the  authorities.  1  Greeul. 
Ev.  §§  lUit,  110;  Ward  v.  Saunders,  6 


- 

property  which  once  belonged  to  him.  and  which  his  cr 
itor  is  seeking  to  condemn  as  fraudulently  conveyed,  the 
-  of  the  fraud,  if  any.  may  be  considered  as  in 
progress,  and  his  declarations,  though  made  after  he  has 
parted  with  the  formal  paper  title,  may  be  given  in 
dence  for  the  creditor  against  the  claimant.1  by  reason  of 
the  continuous  possession  which  accompanied  them. 
Where  the  assignor  continues  in  possession  of  the 
assigned  property,  his  acts  and  declarations  while  in 
actual  possession  may  be  given  in  evidence  as  part  of  the 
especially  if  there  is  absolutely  no  break  made 
in  the  continuity  of  the  possession  after  the  real  or  pre- 
tended sale.3  The  declarations  are  received  in  such 
cases  upon  the  ground  that  they  show  the  nature,  object 
or  motives  of  the  act  which  they  accompany,  and  which 
is  the  subject  of  inquir  be  a  part  of  the  r 

however,  the  declarations  must  be  made  at  the  time  the 
act  was  done  which  they  are  supposed  to  characterize  ; 
they  must  be  calculated  to  unfold  the  nature  and  quality 
of  the  facts  which  they  purport  to  explain  ;  and  must 
harmonize  with  such  facts  so  as  to  form  one  transaction."' 
The  declarations  must  be  concomitant  with  the  principal 
act  or  transaction  of  which  they  are  considered  a  part, 
and  so  connected  with  it  as  to  be  regarded  as  the  result 
and  consequence  of  co-existing  motives.' 

;:  -  v.  iins  v.  Davidson.  1' 

eler,  6  Ired.     X.  C-.     Law,   196;         *<    «*pare    "Williams   v.   Willi 
Hodg    st.  S  .   3:  Bur-      143  X.   Y.   15  I 

bank  v.  Wiley.  ~  •  X        601.  Loos  v.  Wilkinson.  110  X.  Y 

■Williams    v.    Hart.    10   i:  :iep.  99. 

citing   Oaris  v.  Brown,  X6: 

Sav.   Bank  v.   McDonnell.   »     S 
Ala.  434. 8  So.  Rep.  137 ;  N 

ter.  13  Sawy.  2   3      B    rton   v.   Lyons,      it  is  said  that  the  m-  it    a 

-    W.  Rep.  95  per-  .  - 

X-wlin    v 
Williamson      r.     William-      11      Lea      which  ! 

- 
Humph.  509.  thai  .udulent 


494  GOOD    FAITH  —  CONSIDERATION.        %%  2J9&-2Jgc 

§  279a.  Professions  of  good  faith.—  It  is  not  uncommon 
for  fraudulent  debtors  to  make  professions  of  honesty. 
The  Supreme  Court  of  Iowa  consider  that  the  bona  fide 
character  of  a  debtor's  transactions,  when  drawn  in  ques- 
tion, cannot  be  proved  by  such  professions  and  that  the 
same  are  not  competent  evidence.1 

?j  279b.  Intention  —  Knowledge.  —  As  we  have  seen,~  a 
party  may  testify  concerning-  his  intention  in  performing 
an  act  where  such  intention  becomes  material.3  Hence 
achattle  mortgagee,  where  the  mortgage  contains  a  danger 
clause,  may  testify  as  to  his  deeming  himself  in  danger 
where  possession  was  taken  by  him  prior  to  the  maturity 
of  the  mortgage.1  And  a  witness  may  be  asked  whether 
he  conveyed  away  property  to  prevent  it  from  being 
attached.5  And  it  is  competent  for  a  vendee  to  testify 
that  he  had  no  knowledge  or  notice  that  the  vendor 
intended  to  defraud  his  creditors.'1 

§2790.  Consideration.  — When  a  debtor  undertakes  to 
transfer  his  property  in  recognition  of  an  indebtedness  to 
his  wife,  originating  twenty-five  years  before,  no  account  of 
which  had  been  kept,  and  no  interest  or  principal  paid  or 
requested,  the  financial  condition  of  both  parties  for  the 
entire  period  is  a  proper  subject  of  inquiry,  and  the  broad- 
est latitude  should  be  allowed  to  the   judgment-creditor.7 

a  creditor.     This  is  certainly  a  border  1    Tex.    Civ.  App.  657,    -OS.  W.  Rep. 

case.     The  effeel   of   the  failure  to  952. 

change  possession  is  elsewhere  con-  'Barrett    v.    Bart,   42  Ohio  St.  41  ; 

sidered.    See  Chap.  XVII.  Buggans   v.    Fryer.    I   Fans.  (N.  Y.) 

Barwick   v    Weddington,  7::  Iowa  276. 

802,84  N.  W   868.  Ballock  v.  Alvord,  61  Conn.  194, 

3eef  J05.  23  At  I.  Rep.  LSI. 

Graves  v.   Graves,  45  N.   II.  323;  8  Richolson   v.    Freeman,  50  Kans. 

Bedell  v.  Chase,  '64  N   V.  888;  Wilson  165,  L3  Pac.  Rep.  772.    Compare  Gen- 

v.  Clark,  1  Ind.  App.  Ct.  182.  27  N.  E.  trv    v.    Eelley,  49    Kan.     88,  30  Pac. 

Rep  810  :  Gentrj  v.  Kellej .    19  Kan.  Rep.  186. 

10    Pac.    Rep     186;    Gardora    v.  '  Miller  v.  Hanley,  94  Mich.  253,  58 

Woodward,  II   Kan.  758,25  Pac.  Rep.  N.  W.  Rep.  962. 
l'.i'.i  ;   Blankenship  &  B.  Co.  v.  Willis, 


§  280  DECLARATIONS  Of    CO-CONSPIRATORS. 

False  recitals  of  consideration  tend  to  deceive  creditors 
and  are  badges  of  fraud.1  But  the  general  subject  of 
consideration  has  been  elsewhere  considered  - 

£280.  Declarations  of  co-conspirators  —  Where  it  is  proved 
that  the  debtor  and  others  have  joined  in  a  conspiracy  to 
defraud  creditors  by  a  fraudulent  disposition  of  property, 
the  acts  and  declarations  of  either  of  the  parties,  made  in 
the  execution  of  the  common  purpose,  and  in  aid  of  its 
fulfilment,  are  competent  evidence  against  any  of  the 
parties.3  Nor  is  it  of  consequence  that  the  particular 
declarations  under  consideration  were  in  reference  merely 
to  proposed  acts  of  fraud  which  may  not  have  been  con- 
summated in  the  particulars  proposed,  if  such  proposed 
acts  were  sui  generis  with  those  committed.  A  founda- 
tion must  first  be  laid,  by  proof  sufficient  to  establish 
prima  facie  the  fact  of  the  conspiracy  alleged  in  the  com- 
plaint.4 That  being  done,  every  declaration  of  the  par- 
ticipants in  reference  to  the  common  object  is  admissible 
in  evidence.5  It  makes  no  difference  at  what  time  the 
defendant  joins  the  conspiracy.6  Every  one  who  enters 
into  a  common  design  is  generally  deemed  in  law  a  party 
to  every  act  which  has  before  been  done  by  the  others,  in 
furtherance  of  the  common  design  ;  and  this  rule  extends 


1  De  Walt  v.  Doran,  21  Dist.  Col.  Richards  Co.,  10  Ind.  App.  76,  31  N. 
1(33.  E.  Rep.  362  ;  Dodge  v.  Goodell,  16  R. 

2  See  §§  207-223.  I.    48,    12  Atl.   Rep.   336;   Knowerv. 

3  Dewey  v.  Moyer.  72  N,  Y.  79,  80,  Caddea  Clothing  Co.,  57  <  !onn.  202,  1*3 
See  Newlin  v.  Lyon,  49  N.  Y.  061  :  Atl.  Rep.  580;  Little  v.  Lichkoff.  98 
Cujler  v.  McCartney,  40  N.  Y.  221,  Ala.  321,  12  So.  Rep.  429.  See  Kelley 
per   Woodruff,  J.;  Tedrowe  v.  Esher,  v.  People,  55  N.  Y.  565. 

56  Ind.  445;  Sherman  v.  Hogland,  73  4  Rutherford  v.  Schattman,    118  N. 

Ind.  472;  Stewart   v.  Johnson,  18  N.  Y.  604,  23  X.  E.  Rep.  440, 

J.  Law  87  :  Lee  v.  Lamprey,  43  N.  H.  » Moore  v.  Shields,  121    Ind.  -JUT,  23 

13  ;  Kennedy  v.   Divine,  77  Ind.  493  :  N.  E.  Rep.  89. 

Adams  v.  Davidson,  10  N.  Y.  309  ;  N.  6  Dodge  v.   Goodell,    16    R.  I    50,  12 

Y.  Guaranty  &  Ind.   Co.  v.  Gleason,  Atl.    Rep.   236;  Lincoln    v.  Claflin,  1 

78  N.  Y.  503  ;  Daniels  v.  McGinnis,  97  Wall.  132. 

Ind.    552  ;  Benjamin   v.    McElwaine- 


!•!•   LAF  \TF<  iNS    I  »F   a  >-C<  INSPIRATORS. 


§280 


to  declarations.1  The  statements  of  one  of  the  co-con- 
spirators, however,  as  to  past  transactions  not  connected 
with  or  in  furtherance  of  the  enterprise  under  investi- 
gation, are  not  competent.' 

In  case  of  conspiracy  where  the  combination  is  proved, 
the  acts  and  declarations  of  the  conspirators  are  not 
received  as  evidence  of  that  fact,  but  only  to  show  what 
was  done,  the  means  employed,  the  particular  design  in 
respect  to  the  parties  to  be  affected  or  wronged,  and  gen- 
erally those  details  which,  assuming  the  combination  and 
the  illegal  purpose,  unfold  its  extent  and  scope,  and  its 
influence  either  upon  the  public  or  the  individuals  who 
suffer  from  the  wrong,  or  show  the  execution  of  the  illegal 
design.  But  when  the  only  issue  is  whether  there  was  a 
conspiracy  to  defraud,  these  declarations  do  not  become 
evidence  to  establish  it.:i  The  court  may,  in  its  discretion, 
receive  the  declaration  first  and  the  evidence  of  connec- 
tion subsequently,4  though  it  is  conceded  that  the  rule 
calling  for  preliminary  proof  should  not  be  departed  from 
except  under  particular  and  urgent  circumstances.    It  has 


1  Tyler  v.  Angevine,  15  Blatchf. 
541,1  Greenleafs  Ev.  §111. 

N.  y.Guar.  &  End.  Co.  v.  Gleason, 
78  X.  Y.  503.  See  .Johnston  v.  Thomp- 
son, 23  Bun  (N,  Y.)  90;  Baptisl 
Church  v  Brooklyn  I'.  I.  Co.,  28  N. 
Y.  153 ; Cortland  Co.  v.  Berkimer  Co. , 
H  N    Y.  22 

Woodruff,  J.,  in  Cuyler  v.  McCar- 

ney,  W  N.  Y   229  .  Boyd  v.  .1 s.  <i0 

Mr..  454  .  N  Y.  Guaranty  &  End.  Co. 
v  Gleason,  7  ALL.  N.  < !.  (N.  Y.)  :;:;(  ; 

Kei ly  v     I  >i  vine.  77    End.  49  '<■     In 

Winchester  .\  Partridge  Mfg.  Co.  v. 
Creary,  in;  D.  8.  166,  6  S.  C  Etep. 
869,  the  <■' «ii it  Baid  :  "  Without  ex- 
tending this  opinion  bj  a  review  of 
tin'  adjudged  cases  in  which  there 
was  proof  of  a  concerl  or  collusion 
between  vendor  and  vendee  to  de- 
fraud creditors,  and  in  which  subse- 


quent declarations  of  the  vendor  were 
offered  in  evidence  against  the  vendee 
to  prove  the  true  character  of  the 
sale,  it  is  sufficient  to  say  that  such 
declarations  are  not  admissible 
against  the  vendee,  unless  the  alleged 
common  purpose  to  defraud  is  first 
established  hy  independent  evidence, 
ami  unless  they  have  such  relation  to 
the  execution  of  that  purpose  that 
they  fairly  constitute  ;i  part  of  the 
res  gestae.  There  was  no  such  inde- 
pendent evidence  in  this  case,  and 
there  is  no  foundation  for  the  charge 
of  a  conspiracy  between  the  vendors 
and  vendee  to  hinder  creditors,  out- 
side of  certain  statements  which 
Welili  is  alleged  to  have  made  after 
his  linn  had  parted  w  if  h  the  title  and 
surrendered  possession."' 

4  Place  \     Minster,  65  N.  Y.  80. 


§  28l  PROOF    OF    CIRCUMSTANCES.  \gj 

been  said  that  the  testimony  of  one  witness  is  enough  to 
let  in  the  acts  and  declarations  of  a  wrong-doer,  and  that 
the  court  will  not  decide  upon  the  question  of  his  cred- 
ibility ; *  and  in  Pennsylvania  the  rule  seems  to  prevail 
that  the  least  degree  of  concert  or  collusion  between 
parties  to  an  illegal  transaction  makes  the  act  of  one  the 
act  of  all.2 

§281.  Proof  of  circumstances.  —  In  litigations  of  the 
class  under  consideration,  great  latitude  should  undoubt- 
edly be  allowed  in  regard  to  the  admission  of  circum- 
stantial evidence,3  for  the  purpose  of  proving  participa- 
tion in  manifest  fraud.4  Objections  to  testimony  as 
irrelevant  are  not  favored  in  such  cases,  since  the  force  of 
circumstances  depends  so  much  upon  their  number  and 
connection.5  The  evidence  should  be  permitted  to  take 
a  wide  range,  as  in  most  cases  fraud  is  predicated  of  cir- 
cumstances, and  not  upon  direct  proof.6  Proof  is  said  to 
establish  the  truth,  and  circumstantial  evidence  to  lead 
toward  it  ;  hence  any  pertinent  and  legitimate  facts,  con- 
ducing to  the  proof  of  a  litigated  issue,  constitute  evi- 
dence of  the  disputed  fact,  stronger  or  weaker,  according 
to  the  entire  character  and  complexion  of  it,  or  as  affected 
by  conflicting  evidence.7  Though  the  evidence  to  prove 
fraud  may  be  circumstantial  and  presumptive,  it  "must  be 


1  Abney  v.  Kingsland,  10  Ala.  355,  37  Minn.  218,  34  N.  W.  Rep.  21; 
361.  Brittain  v.   Crowther,  54  Fed.    Rep. 

2  Confer  v.  McNeal,  74  Pa.  St.  115;  295:  Reynolds  v.   Gawthrop's   Heirs, 
Gibbs  v.  Neely,   7  Watts  (Pa.)  307;  37  W.  Va.  3,  16  8.  E.  Rep.  364     See 
Rogers  v.    Hall,  4  Watts  (Pa.)  361;  §  13:  Engraham  v.   Pate,  51  Ga.  587. 
McDowell  v.  Rissell,  37  Pa.  St.  164  ;  6  Sarle  v.  Arnold,  7  R.  I.  586  :  ( lastle 
Hartman  v.  Oilier.  62  Pa.  St.  37.  v.  Billiard.  23  How.   187. 

3  Schumacher  v.  Bell,  164  111.  184,  6  Ferris  v.  Irons,  83  Pa.  St  lvj. 
45  N.  E.  Rep.  428.  See  Wright  v.  Linn,  L6  Tex.  84  ;  Laird 

4  Curtis  v.  Moore,  20  Md.  96  ;  Shealy  v.  Davidson,  124  End.  412,  25  N.  E. 
v.  Edwards,  75  Ala.  416  ;  Nicolay  v.  Rep.  7;  Hinton  \.  Greenleaf,  lis  N. 
Mallery,  62  Minn.  121,  64  N.  W.  Rep.  C.  7,  23  S.  E.  Rep.  924 

108  ;  O'Donnell  v.  Hall,  157  Mass.  463,  'Miles    v.    Edelen,    1    Duv.    (Ky.) 

32  N.  E.  Rep.  666;  Allen  v.  Fortier,  270. 

32 


498  PROOF    "I     CIRCUMSTANCES.  §  28 1 

strong  and  cogent,  such  as  to  satisfy  a  man  of  sound 
judgment  of  the  truth  of  the  allegation."  ■  But  the  alle- 
gation of  fraud  in  a  civil  action  need  not,  like  the  charge 
of  crime,  be  proved  by  evidence  excluding  all  reasonable 
doubt ;  a  preponderance  of  evidence  will  suffice.2  But  in 
order  to  justify  a  finding  of  fraud,  the  inference  to  be 
drawn  from  the  circumstances  relied  on  must  not  only  be 
consistent  with  the  fraudulent  acts  charged,  but  incon- 
sistent with  honesty  and  good  faith.3  So  it  is  not  error 
to  refuse  to  charge  a  jury  that  "they  must  be  satisfied 
from  the  clearest  and  most  satisfactory  evidence,"  since  it 
is  the  province  of  the  jury  to  weigh  the  evidence.4  "Cir- 
cumstantial evidence,"  said  Bradley,  J.,  "  is  not  only  suffi- 
cient, but  in  most  cases  it  is  the  only  proof  that  can  be 
adduced."5  Often  other  things  which  cro  to  characterize 
a  transaction  are  more  convincing  than  the  positive 
evidence  of  any  single  witness,  especially  of  an  interested 
witness.6  The  only  true  test  is  whether  the  evidence  can 
throw  light  on  the  transaction,  or  whether  it  is  totally 
irrelevant.7  It  is  the  duty  of  the  court,  however,  to  see 
that  such  evidence  has  at  least  a  natural  and  reasonable 
tendency  to  sustain  the  allegations  in  support  of  which  it 
is  introduced  ;  that  it  is  of  such  a  character  as  to  warrant 
an  inference  of  the  fact  to  be  proved,  and  amounts  to 
something    more    than    a   mere   basis  for    conjecture     or 


Henry   v.  Henry,  8  Barb.  (N.  Y.  I  Mass.  275,  876;  White  v.  Perry,  14  W. 

Va.  66;  Butler  v.  Watkins,  13  Wall. 

Strader  v.   Mullane,  17  Ohio  St .  456;  Armstrong  v.  Lachman,  84  Va. 

626  726,  6  S.    K.  Rep.    L29;    Saunders  v. 

-  Blish  \     CoMns,  68  Mich.  542,  3(5  Parrish,  86  Va.  592,  10  S.  E.  Rep.  748. 

N    W\  Rep.  781.  "Molitor  v.  Robinson, 40  Mich.  202. 

1  Painter  v.  Drum,  40  Pa.  St.  467.  Sec  Blue  v.  Penniston,  27  Mo.  274. 

Rea    «     Missouri,    17   Wall.   543.  'Heath  v.  Page.  63  Pa.  St.  108-126, 

ookev  Cooke,  43  Md.  525 ;  King  and  cases  cited.    See  Stewart  v.  Fen- 

\.  Poole.  61  <;.i  :;Tl  ;  Sarle  v.  Arnold,  ner,  81   Pa.  St.  177;  Booth  v.  Bunce, 

•    R-    I     r>85;    Castle   v.    Bullard,    23  33  N.  Y.  159 ;  Gollobitsch  v.  Rainbow, 

Bow.  181     Winchester  v.  Charter,  102  84  Iowa 567,  51  X.  W.  Rep.  48. 


§281 


PROOF   OF   CIRCUMSTANCES. 


I.99 


vague  speculation.1  Evidence  may  be  legally  admissible 
as  tending  to  prove  a  particular  fact  which  by  itself  is 
utterly  insufficient  for  that  purpose.  "  It  may  be  a  link 
in  the  chain,  but  it  cannot  make  a  chain  unless  other 
links  are  added."  2  So  in  England  it  is  settled  that  the 
preliminary  question  of  law  for  thexourt  is  not  whether 
there  is  absolutely  no  evidence,  but  whether  there  is  none 
that  ought  reasonably  to  satisfy  the  jury  that  the  fact 
sought  to  be  proved  is  established.  If  there  is  evidence 
on  which  the  jury  can  properly  find  for  the  party  on 
whom  the  onus  of  proof  lies,  it  should  be  submitted  ;  if 
not,  it  should  be  withdrawn  from  the  jury.3 

Greater  latitude  is  undoubtedly  allowable  in  the  cross- 
examination  of  a  party  who  places  himself  upon  the  stand 
than  in  that  of  other  witnesses.4  The  cross-examination 
of  a  witness  not  a  party  is  usually  confined  within  the 
scope  of  the  direct   examination.5     Then  again  proof  of 


1  Battles  v.  Laudenslager,  84  Pa. 
St.  451. 

2  Howard  Express  Co.  v.  Wile,  64 
Pa.  St.  206. 

Latitude  of  the  inquiry. — In  Balti- 
more &  Ohio  R.  R.  Co.  v.  Hoge,  34 
Pa.  St.  221,  Thompson,  J.,  said  :  "  It 
is  a  great  error,  generally  insisted  on 
by  defendants,  in  cases  involving 
questions  of  fraud,  that  each  item  of 
testimony  is  to  be  tested  by  its  own 
individual  intrinsic  force,  without 
reference  to  anything  else  in  the  case  ; 
and  if  on  such  a  test  it  does  not  prove 
fraud,  it  must  be  excluded.  The 
system  of  destroying  in  detail  forces 
designed  for  concentrated  action  does 
well,  doubtless,  in  military  opera- 
tions ;  but  a  skillful  general  never 
suffers  such  a  disastrous  result,  except 
when  he  cannot  prevent  it.  Courts 
have  the  power,  and  must  prevenl 
such  a  system  of  assault,  otherwise 
fraud  would  ever  be  victorious.     It  is 


a  subtle  element,  and  is  to  be  traced 
out,  if  at  all,  by  the  small  indices  dis- 
coverable by  the  wayside  where  it 
travels :  and  to  enable  courts  and 
juries  to  detect  it,  they  must  in  most 
cases  aggregate  many  small  items, 
before  the  true  features  of  it  are  dis- 
cernible. Hence  it  is  that  great 
latitude  in  the  investigation  is  a  rule 
never  departed  from  in  such  cases. 
This  rule  is  elementary,  and  a  cita- 
tion of  authorities  to  prove  it  would 
not  only  be  useless,  but  superfluous." 

3  Ryder  v.  Wombwell,  L.  R.  4 
Exch.  39;  Jewell  v.  Parr,  13  C.  B. 
916. 

4  Rea  v.  Missouri,  17  Wall.  542; 
Cox  v.  Einspahr,  40  Neb.  411,  58N. 
W.  Rep.  941  ;  Riddell  v.  Munro,  (9 
Minn.  532,  52  N.  W.  Rep.  141. 

5  Rea  v.  Missouri,  IT  Wall.  542; 
Johnston  v.  Jones,  1  Black  216  ; 
Teese  v.  Huntingdon.  23  How.  'J. 


50O  PROOF  OF  CIRCUMSTANCES.  §  281 

collateral  facts  tending  to  show  a  fraudulent  intention  is 
held  to  be  admissible  whenever  a  fraudulent  intention  is 
to  be  established.1  The  fact  that  at  the  time  of  the  sale 
suits  were  pending  against  the  debtor,  or  that  he  was 
apprehensive  that  suits  would  be  commenced,  and  also  his 
general  pecuniary  condition,  or  that  the  parties  are  rela- 
tives,2 or  the  security  larger  than  the  debt,3  are  matters 
which  the  creditor  should  be  permitted  to  show.4  A 
promise  not  to  disclose  the  existence  of  a  mortgage  is 
evidence  of  fraud.5 

The  maxim  "  omnia  prasumuntur  contra  spoliatorem" 
is  frequently  invoked  by  creditors  in  cases  where  the 
debtor  or  those  acting  in  collusion  with  him  have  spirited 
away  witnesses,6  or  altered,  destroyed,  or  suppressed 
documents.7  And  curiously  enough  the  maxim  "  De 
minimus  non  curat  lex"  has  been  applied  where  the  sum 
claimed  to  have  been  misappropriated  by  the  debtor 
was  insignificant  in  value  or  amount.8 

We  have  already  glanced  at  the  effect  of  inadequacy  of 
consideration,9  and  have  seen  that  it  may  be  so  gross  as 
to  shock  the  conscience  and  furnish  decisive  evidence  of 
fraud.10  In  an  Oregon  case  this  language  occurs:  ''The 
fact  that  one  person  has  obtained  the  property  of  another, 
under  a  form  of  purchase,  without  having  paid  any  con- 
sideration  therefor,  and   with  a  design  of  acquiring  it  for 


United    Slates    v.    36   Barrels    of  7  See  Wardour  v.  Berisford.  1  Vera. 

High    Wines,  ?    Blatchf.  474;  Wood  452;    Attorney-General    v.    Dean    of 

\.  United  States,  16  Bet.  342-361.  Windsor,   24  Beav.   679:  Armory  v. 

Beeves  v.  Skipper,  94  Ala.  107,  10  Delamirie,    1    Stra.     505.      Compare 

So   Rep.  309.  Stateof  Michigan  v.  Phoenix  Bank,  33 

'Kellogg    \.    dyne.    :,;    Fed.    Rep.  N.    Y.   '.).      Hut    we  cannot    outer  this 

696  wide  field     See   is  Am.   Law    Rev. 

Barrel]   v.    Mitchell,  61   Ala.  278.  185. 

Bee  Chap  XVI.  -Crook    v.   Rindskopf,    l0.->    N.    Y. 

Wafer    n.    ll.nvey  County   Bank,  484, 12  N.  E.  Rep.  174. 

16  Kan.  597,  26  Pac    Rep.  1032.  'See   .:   282.     A.rcher   \.    Lapp,  12 

■  See  Kirbj  v.  Talhnadge,  160  U.  S.  Ore.  202.  6  Pac.  Rep.  672. 

'"  See  Pomeroy's  Eq/Jur.,  §  927. 


§  282  I  >THER    FRAUDS.  501 

nothing, js  fraudulent  in  itself.1  It  is  error  for  the  court 
to  direct  the  jury  as  to  what  weight  shall  be  given  to 
particular  items  of  the  testimony.2 

§282.  Other  frauds. — It  is  competent,  in  order  to  estab- 
lish the  fraudulent  intent  of  the  debtor,  to  give  proof  of 
other  fraudulent  sales 8  effected  about  the  same  time,4 
and  of  his  proposals  to  make  other  covinous  alienations 
together  with  his  statements  and  declarations  showing 
such  intent.5  Johnson,  J.,  said  :6  "  In  actions  involving 
questions  of  fraud,  the  intent  is  always  a  material  inquiry, 
and  for  the  purpose  of  establishing  that,  other  acts  of  a 
similar  character,  about  the  same  time,  may  always  be 
shown."  7  This  is  especially  the  rule  where  there  is  any 
relation  or  connection  between  the  different  transac- 
tions,8 or  they  form  any  part  of  a  connected  scheme  to 
defraud.9  When  the  motives  and  intent  of  the  parties 
to  an  act  become  material,  they  may  be  shown  by  separate 
and  independent  acts  and  declarations  accompanying  or 
preceding  the  act  in  question.  How  far  back  such  proof 
may  extend  must  depend  upon  the  nature  and  circum- 
stances of  each   particular  case,  and  no  positive  rule  can 

'Archer    v.    Lapp,   12   Ore.  202,  6  Brayton,    38  N.  Y.  198  ;  Withrcra  v. 

Pac.  Rep.  672.  Biggerstaff,  87  N.  C.  17<i. 

2  First  National  Bank  v.   Lowrey,  \msden   v.   Manchester,  40  Barb. 
36  Neb.  290,  54  N.  W.  Rep.  568.  (N.  Y.)  16;!.     Proof  of  other  indebted- 

3  Compare  Trumbull  v.  Hewitt,  65  ness    on    the    part    of   the   debtor  is 
Conn.  60,  31  Atl.  Rep.  492.  admissible  on   the  question  of  intent. 

4  Benerlien  v.    O'Leary,    149  N.  Y.  Ross   v.    Wellman,  102  Cal.  1,  36  Pac. 
38,    43    N.    E.    Rep.    417  ;     Gary     v.  Rep.  402. 

Hotailing,  1  Hill  (N.  Y.)  311.     See80  '•  Warren   v.   Williams.  52  Me.  846; 

N.  Y.  374  n.  Flagg     v.     Willington,    »'.    Me.    386. 

6Pomeroy    v.   Bailey,  43  N.  H.  125.  Evidence  that   the  grantee  had  been 

and  cases  cited;  Blake  v.  White,  13  engaged  in  other  fraudulent  transac- 

N.  H.  267;  Pierce  v.  Hoffman,  24  Vt.  tions,  entirely  distinct   from   the  our 

527  ;  Beuerlein  v.   O'Leary,  149  N.  Y.  under  consideration,  is  not  admissible. 

33;  Spaulding   v.    Keyesf  125  N.  Y.  Kaufer   v.    Walsh,    88  Wis.  68,  59  V 

113,  26  N.  E  Rep.  15.     Butsee Staples  W.  Rep.  460. 

v.  Smith,  48   Me.  470  ;  Huntzinger  v.  B  Erfort  v.  Consalns,  IT  Mo.  212. 

Harper,  44   Pa.    St.    204 ;  McCabe    v.  'Smith    v.    Schwed,     9    Fed.    Rep. 

483;  Clarke  v.  White.  12   Pet.  193. 


5<32  SUSPICIONS    INSUFFICIENT.  §  283 

be  laid  down.  In  the  case  of  fraudulent  conveyances  the 
proof  will  usually  be  limited  to  similar  acts  occurring 
about  the  same  time.1  Other  conveyances  tending  to 
strip  the  debtor  of  his  property  may  be  proved.2 

It  has  been  considered,  however,  not  competent  for  a 
party  imputing  fraud  to  another  to  offer  evidence  to 
prove  that  the  other  dealt  fraudulently  at  other  times  and 
in  transactions  wholly  disconnected  with  the  one  under 
consideration.3  It  is  believed  that  such  testimony  would 
tend  to  prejudice  the  minds  of  the  jury  by  impeaching 
the  general  character  of  the  party  charged  with  the  fraud, 
when  he  had  no  right  to  expect  such  an  attack,  and  could 
not  be  prepared  to  defend  himself,  however  unimpeach- 
able his  conduct  might  have  been.4 

§  283.  Suspicions  insufficient.  —  Mere  suspicion  of  the 
existence  of  fraud,  as  we  have  said,5  is  not  sufficient  to 
establish  its  existence,  but  it  must  be  clearly  and  satis- 
factorily shown.6  The  evidence  must  convince  the 
understanding  that  the  transaction  was  entered  into  for  a 
purpose  prohibited  by  law.7  Tangible  facts  must  be 
adduced  from  which  a  legitimate  inference  of  a  fraudulent 
intent  can  be  drawn.8      Again  circumstances  amounting 


1  Pomeroy  v.  Bailey,  43  N.  H.  125  :  Petersen  v.  Schroeder,  75  Wis.  571,  44 

Bernheim    v.    Dibrell,  66   Miss.  199,  5  N.W.  Rep.  652;  McEvony  v.  Rowland, 

So.  Rep.  693.  43  Neb.  98,  01  N.  W.  Rep.    124.     See 

•  Boffnian      v.     Eenderson     (Ind.  §§5,6. 

L896)   II  X.  E.  Rep.  629.  "  In  actions  for  false  representations 

Seating  v.    Retan,  SO  Mich.   324,  there  must  be  representation,  falsity, 

45N.  W.  Rep    111.  scienter,  deception  and  injury.     Ar- 

'Siiims  v.  Skinner,  HI  Mass.  360  ;  thur  v.  Griswold,  55 N.  Y.  400;  Brack- 
Grant  v.  Libby.71  Me.  430.  As  t<.  ett  v.  Griswold,  112  N.  Y.  467.  20  N. 
when  false  statements  to  a  commer-  E  Rep.  376;  Wheadon  v.  Hunting- 
cial agency  as  to  assets  and  liabilities  ton,  83  Hun  (N.  V.)  372,  31  N.  Y. 
ina\  in-  -how  n,  see  Treusch  v.  <)t-  Snpp.  912. 
tenburg    54    I  •   I    Rep.  867.  '  Pratt  v.  Pratt,  96  111.  184. 

Sherman     v.    Bogland,    73    Intl.  B  Sherman    v.    Hogland,    73    Ind. 

173  .  I  l.-.rk  v.  Krause.  12  Mackej  1  D.  C.)  177  ;  Jaeger  v.   Kelley,  52  N.  Y.  274. 

Jaeger  v.  Kelley,  52  X.  V.  274;  See  Chap.  XVI. 
Ridge  \.  Grieswell,  53  Mo.   A.pp.  479; 


§284 


PROVING    \  A  I  i   l  . 


503 


to  a  suspicion  of  fraud  are  not  to  be  deemed  notice  of  it, 
and  where  an  inference  of  notice  is  to  affect  an  innocent 
purchaser,  it  must  appear  that  the  inquiry  suggested  would 
have  resulted,  if  fairly  pursued,  in  the  discovery  of  the 
defect  or  fraud.1  The  transaction  will  not  be  overturned 
even  though  the  court  finds  "  that  there  is  ground  of 
suspicion."  2 

§  284.  Proving  value.  — As  we  have  seen,  the  value  of 
the  assigned  property  is  always  important  in  the  question 
of  fraud.3  Experts  may  be  called  to  prove  value.  In 
Bristol  Co.  Savings  Bank  v.  Keavy,4  the  witness  was  a 
real  estate  broker  and  auctioneer,  and  was  accustomed 
to  sell  and  value  lands  in  various  parts  of  the  city  in 
which  the  property  was  located,  and  had  appraised  land 
on  the  street  where  the  premises  were  situated.  He  was 
held  to  be  plainly  qualified  to  testify  as  to  the  value  of 
the  land. 


1  Simnis  v.  Morse,  4  Hughes  583. 
See  Ledyard  v.  Butler,  9  Paige  (N.  Y.) 
132. 

•  !  Parker  v.  Phetteplace,  1  Wall. 
683.  Mr  Jenks,  the  learned  counsel 
for  the  creditor  in  this  action,  relied 
largely  upon  the  suspicious  circum- 
stances in  evidence,  and  urged  that 
proof  of  a  covenant  to  commit  the 
fraud  could  not  be  adduced,  nor  even 
proof  of  words.  Some  of  the  greatest 
crimes  which  power  has  ever  com- 
manded have  been  consummated 
without  a  word  of  direct  instruction. 
The  learned  reporter,  in  a  note  to  this 
case,  aptly  quotes  from  King  John, 
Act  III,  Scene  III : 

King  John.  .... 

"  Hear    me    without   thine    ears,   and    make 

reply 
Without  a  tongue,  using  conceit  alone, 
Without  eyes,  ears,  and    harmful   sound   of 

words  ; 
Then,  in  despite  of  broad-eyed  watchful  day, 
I  would  into  thy  bosom  pour  my  thoughts  ; 


Hut  ah,  I  will  not : — 

Dost  thou  understand  me? 
Thou  art  his  keeper. 
Hubert.  And  I  will  keep  him  so. 

That  he  shall  not  offend  your  majesty." 


Again,  after  the  murder, 
Scene  II. : 


Act   IV. 


King  John .         .... 
"  Hadst  thou  but  shook  thy  head  or   made  R 

pause, 
When  I  spake  darkly  what  I  purposed  ; 
Or  turn'd  an  eye  of  doubt  upon  my  lace. 
As  bid  me  tell  my  tale  in  express  words  ; 
Deep  shame  had  struck  me  dumb,  made  me 

break  off, 
And    those   tny   fears   might   have   wrought 

fears  in  me  : 
But  thou  didst  understand  cue  by  my  signs. 
And  didst  in  signs  again  parley  with  sin, 
Yea,  without  stop,  didst  let  thy  heart  consent. 
And,  consequently,  thy  rude  hand  to  act 
The  deed  which  both  our  tongues  held  vile  to 

name. — " 

3  Stacy   v.  Deshaw,   i    Bun  (N.  Y.) 
451.     See  §§23,  41. 

4  128  Mass.  303. 


504  RECITALS  —  TESTIMONY.  §§2843,285 

§  284a.  Recitals  in  deed.  --The  recitals  in  a   deed  are 

manifestly  not  conclusive  against  creditors  attacking  the 

deed.1     Any  different  rule   would  be  destructive  of  the 
rights  of  creditors. 

§  285.  Testimony  must  conform  to  pleadings.  —  1  he  com- 
plainant will  only  be  allowed  to  prove  the  truth  of  the 
allegations  contained  in  his  bill.  Evidence  relating  to 
other  matters  will  be  excluded  upon  well-established 
principles  of  pleading  which  require  the  complainant  to 
state  the  case  upon  which  he  seeks  relief,  to  the  end  that 
the  court  may  learn  from  the  pleading  itself  whether  the 
creditor  is  entitled  to  the  relief  prayed,  and  that  the 
defendant  may  be  advised  as  to  the  matters  against 
which  he  is  to  defend.2  Facts  admitted  in  the  pleading 
cannot  be  contracted  or  varied  by  evidence. 


1  De  Farges  v.  Ryland.  87  Va.  404,  v.  First  Nat,  Bk.,  84  N.  Y.  420  ;  South- 

12  S.  E.  Rep.  805  ;  Hubbard  v.  Allen,  all  v.  Farisb,  85  Va.  410.  7  S.  E.  Rep. 

59  Ala.  296.  534  ;   Pusey  v.  Gardner,  21  W.  Va. 

-  Parkhurst    v.    McGraw,    24  Miss.  476,   477;   Bierne  v.   Ray,   37  W.  Va. 

139.     See  Truesdell  v.    Sarles,  104  N.  577,  16  S.  E.  Rep.  804.     See  §  140. 
Y.  167,  10  N.  E.  Rep.  139  ;  Soutbwick 


CHAPTER  XIX. 


DEFENSES. 


§  286.  As  to  defenses. 
28G<x.  Another  action  pending. 
2865.  Attacking  judgment. 

287.  Laches — Estoppel. 

288.  ) 

08g   r  Lapse  of  time. 

290.  Discovery  of  the  fraud. 

291.  Judge  Blatchford's  views. 

292.  Statute  of  limitations. 

293.  Limitations  in  equity. 
293a.  Statute  of  frauds. 


§  294.  Insolvency  or  bankruptcy  dis- 
charges. 
395.  Existing  and  subsequent    cred- 
itors. 

29G.  Sufficient  property  left  —  (iift 
of  land. 

297.  What  sheriff  must  show  against 
stranger. 

297a.  Set-off. 

297o.  Attacking  consideration. 

297c.  When  controversies  not  sepa- 
rable. 


§  286.  As  to  defenses.  —  The  principal  defenses  interposed 
in  suits  prosecuted  to  annul  fraudulent  transfers,  as  is 
elsewhere  shown,  are,  that  the  purchaser  acquired  the 
title  or  property  bona  fide,  without  notice  of  or  participa- 
tion in  the  grantor's  fraudulent  intent,  and  that  adequate 
consideration  was  paid  or  given  for  it.  The  principles 
and  authorities  governing  these  branches  of  our  investi- 
gation have  been  considered  of  sufficient  moment  to  call 
for  treatment  in  separate  chapters,1  and  need  not  be 
again  discussed,  but  there  are  certain  lines  of  defense 
common  to  this  class  of  litigation  which  command  at 
least  passing  attention.  It  may  be  observed  at  the  out- 
set that  the  fact  that  forms  of  law  have  been  pursued  is 
no  protection  in  a  court  of  equity,  if  the  result  aimed  at 
and  reached,  is  a  fraud.2  The  transaction  must  be  judged 
by  its  real  character,  rather  than  by  the  form  and  color 
which  the  parties  have  seen  fit  to  give  it.3     What  cannot 

1  See  Chaps.  XV,  XXIV.  a  Quackenbos  v.  Saver,  62  N.  Y.  346; 

-Metropolitan  Bank  v.   Durant,  22      Vreeland  v.  New  Jersej  Stone  Co.,  29 

N.  J.  Eq.  35,  41.  N.  J.   Eq.  190;  Fiedler  v.   Damn,  60 


506  ANOTHER  ACTION  PENDING —  LACHES.      §§  286a-287 

be  done  directly  cannot  be  done  by  indirection ;  and 
when  fraud  appears,  the  forms  will  be  discarded  and  the 
corrupt  act  exposed  and  punished.1 

It  is  not  a  fraud  for  a  debtor  to  fail  to  plead  the  statute 
of  limitations,2  and  an  abandonment  by  a  debtor  of  a 
technical  defense  is  not  a  fraud  on  other  creditors.3 

§286a.  Another  action  pending. —The  general  and  salu- 
tary principle  of  procedure  that  no  person  shall  be  twice 
vexed  for  the  same  cause,  of  course,  applies  to  proceed- 
ings instituted  by  creditors.  Thus,  in  a  case  which  arose 
in  Pennsylvania,  where  a  creditor's  bill  was  filed  against 
directors  of  an  insolvent  bank,  charging  mismanagement 
of  its  affairs,  and  an  assignee  of  the  bank  subsequently 
brought  an  action  at  law,  in  the  name  of  the  bank,  against 
the  directors  for  the.  same  cause,  it  was  held  that  the 
pendency  of  the  bill  was  well  pleaded  in  abatement  in 
the  action  at  law.4 

§286b.  Attacking  judgment.  —The  judgment  upon  which 
the  creditor's  bill  is  founded  is  conclusive  against  the 
debtor.5  Clear  proof  of  fraud  is  required  to  impeach  a 
judgment  on  which  a  creditor's  bill  is  based.0 

§  287.  Laches  —  Estoppel.  — We  have  elsewhere  discussed 
the  cases    relating  to  the  sufficiency  of    pleas    excusing 

X.  V.  440,  where  the  rule  is  applied  '  Buck  v.  Voreis,  89  Ind.  117. 
to  usurious  transactions.  Judgment-  -  Christie  v.  Bridgman,  51  N.  J.  Eq. 
creditors  are  considered  to  be  acting  333,  25  Atl.  Rep.  939,  30  Id.  429  ;  Shep- 
iu  privity  with  their  debtor  in  attack-  pard's  Estate,  180  Pa.  St.  61,  36  Atl. 
ing  or  defending  any  usurious  con-  Rep.  422;  Allen  v.  Smith.  129  U.  S. 
tract  which  he  may  have  made.  465,  9  S.  C.  Rep.  338;  French  v.  Mot- 
Chandler  v.  Powers,  24  N.  Y.  Daily  ley,  63  Me.  326. 
Reg.,  p.  1201  (Dec.  28, 1883).  SeeMer-  8  Inglehart  v.  Thousand  Island 
chants'  Exch.  Nat.  Bk.  v.  Commercial  Hotel  Co.,  109  N.  Y.  454,  17  N.  E. 
Warehouse  Co.,   49   N.  Y.   642,  and  Rep.  358. 

QOte.      tt  seems  thai   it  is  not  a   fraud  4Warner   v.  Hopkins,  111    Pa.    St. 

upon  creditors   for  a    debtor   or  as-  328. 

signor  to  provide  for  the  payment  of  6See§74. 

a  usurious  debt.  See  Chapin  v.  Thomp-  'Walters  v.  Walters,  28  111.   App. 

son,  B9  N.  Y.  371  ;   Murray  v.  Judson,  633. 
9  N    X".  78 


§287  LACHES  —  ESTOPPEL.  507 

apparent  laches  in  filing  a  bill  to  annul  a  fraudulent 
transfer.1  Endeavoring  to  avoid  unnecessary  repetition, 
let  us  recur  to  the  subject  of  laches  considered  as  a 
defense  or  bar  to  a  suit.  "  Courts  of  equity  do  not 
impute  laches  by  an  iron  rule.  Circumstances  are 
allowed  to  govern  every  case."  ~  It  may  be  asserted  at 
the  outset  that  equity  will  not  be  moved  to  set  aside 
a  fraudulent  transaction  at  the  suit  of  one  who,  after  he 
had  knowledge  of  the  fraud,  or  after  he  was  put  upon 
inquiry,  with  the  means  of  knowledge  accessible  to  him, 
has  been  quiescent  during  a  period  longer  than  that  fixed 
by  the  statute  of  limitations.3  He  must  have  used 
reasonable  diligence  to  inform  himself  of  the  facts.4 
A  stale  and  uncertain  demand,  as,  for  instance,  a  bill  filed 
to  set  aside  an  alleged  fraudulent  conveyance  nineteen 
years  old,  should  not  be  allowed  in  a  court  of  equity:' 
The  rule  is  peculiarly  applicable  where  the  difficulty  of 
doing  entire  justice  arises  through  the  death  of  the  prin- 
cipal participants  in  the  transactions  complained  of,  or  of 
the  witnesses.6  In  Eigleberger  v.  Kibler,7  it  appeared 
that  the  complainant  had  permitted  the  conveyance  in 
question  to  stand  for  nearly  ten  years,  during  which 
period  many  valuable  improvements  had  been  made  by 
the  grantee,  and  the  creditor  had  also  suffered  other 
creditors,  junior  in  date  to  him,  to  acquire  prior  liens,  and 


1  See  §§148,149.     See  Cedar  Rapids  '  Foster  v.  Mansfield  C.  &.  L.  M.  R. 
Ins.  Co.  v.  Butler,  83  la.  124,  48  N.  \V.  R.  Co.,  146  U.  S.  88,  13  S.  ('.  Re] 
Rep.  1026.  Halstead  v.  Grinnan,  152  U.  S.   117.  14 

2  Waterman     v.    Sprague    Manuf.  S.  C.  Rep.  641;  PearsaU  v.  Smith.  149 
Co.,  55  Conn.  574.  U.  S.  231,  13  S.  C.  Rep.  833 

Ita3  Burke    v.   Smith,    16  Wall.   401.  B  Dominguez  v.  Dominguez,    7  Cal. 

Compare  Meader  v.  Norton,  11  Wall.  424. 

443  ;  Trenton  Banking  Co  v.  Duncan,  'Hammond    v.   Hopkins.    1481  .  S 

86  N.  Y.  221  ;  Halstead    v.    Grinnan,  224,  12  S.  C.  Rep.  418. 

152   U.    S.    412,   14   S.    C.    Rep.    641;  7  1   Hill's   Ch.  (S.   (.)   113,   20    Am. 

Hathaway   v.  Noble,  55   N.    H.  508  ;  Dec.  192. 

Higgins  v.  Crouse,  63   Hun  (N.    Y.) 

139.  17  N.  Y.  Supp.  696. 


508  LACHES  —  ESTOPPEL.  §287 

thus  consume  the  estate  of  the  debtor.  Upon  this  state 
of  facts,  the  court  very  properly  decided  that  the  creditor, 
having  by  his  supineness  allowed  the  fund  to  be  taken 
away,  could  not  subsequently  be  permitted  to  make  his 
own  laches  aground  of  injury  to  another.  Fifteen  years' 
delay  was  considered  fatal  in  Norris  v.  Haggin.1  So  it 
has  been  considered  an  important  element  that  the  trans 
actions  out  of  which  the  suit  arose  commenced  about  thir- 
teen years  before  any  attempt  was  made  toward  impeach- 
ment, and  no  efforts  at  concealment  or  secrecy  were 
shown.2  "After  such  delay,"  said  Chief-Justice  Waite, 
"  we  are  not  inclined  to  set  aside  what  has  been  permitted 
to  remain  so  long  undisturbed,  simply  because  of  an 
inability  to  explain,  with  exact  certainty,  from  what  pre- 
cise source  the  money  came,  which  went  into  the  purchase 
of  each  particular  parcel  of  property." 3  A  delay  of  twenty 
years  was  deemed  fatal  in  New  Jersey.4 

Chancellor  Kent  said,  upon  this  subject  : 5  ''  There  is 
no  principle  better  established  in  this  court,  nor  one 
founded  on  more  solid  considerations  of  equity  and  pub- 
lic utility,  than  that  which  declares  that  if  one  man, 
knowingly,  though  he  does  it  passively,  by  looking  on, 
suffers  another  to  purchase  and  expend  money  on  land, 
under  an  erroneous  opinion  of  title,  without  making 
known  his  claim,  he  shall  not  afterwards  be  permitted  to 
exercise  his  legal  right  against  such  person.  It  would  be 
an  act  of  fraud  and  injustice,  and  his  conscience  is  bound 


136   r.  8.  386,  10  S.  C.   Rep.  942.  J  Frenche  v.  Kitchen,  53  N.  J.  Eq. 

Compare  Foster  v.  Mansfield,  C.  &  L.  37,  30  All.  Rep.  815. 

M.   I:     R.  Co.,   L46   U.  8.  88,  13  S.  C.  s  Wendell     v.    Van    Rensselaer,    1 

Rep  88;  Leggett  v.  Standard  Oil  Co.,  Johns.  Ch.  (N.  V.)   354.     In  Corbitt 

149  r.  s.  394,  18  8.  C.  Rep.  903.  v.  Cutoheon,  79  Mich.  41,  44  N.  W. 

1  Aldridge   \     Muirhead,   101   U.  S.  Rep.  163,  it  was  held  that  mere  acqui- 

401.  escence  by  taking  no  present  measure 

Udridge  v.   Stairhead,  101    U.S.  Lb  not  enough  to   prevent  afterwards 

403.    See  Norria  v.  Eaggin,  130  U.  8.  the  bringing  of  an  action,  in  the  ab- 

0  s  C.  Rep.  942.  Bence  of  facts  upon  which  an  estoppel 

could  be  predicated. 


<J  288  I   ^PSE   OF   'II  Ml  .  509 

by  this  equitable  estoppel."1  The  Court  of  Appeals  of 
New  York  could  "see  no  reason  why  the  same  principle 
should  not  protect  creditors,  who  have  given  credit  upon 
the  faith  of  the  apparent  ownership  of  property  in  pos- 
session of  the  debtor,  against  a  secret  unrecorded  con- 
veyance, fraudulently  concealed  by  the  grantee  ;  as  when, 
with  knowledge  that  the  debtor  is  holding  himself  out  as 
owner,  and  is  gaining  credit  upon  this  ground,  he  keeps 
silence,  giving  no  sign."1  But  in  this  latter  case  the 
creditor's  suit  failed  because  of  his  laches  in  not  examin- 
ing the  record,  and  because  of  a  lack  of  evidence  of 
knowledge  of  circumstances  which  called  upon  the 
defendant  to  record  his  deed.  Of  course,  if  the  creditor, 
with  full  knowledge  of  the  fact  which  constitutes  the 
fraud,  assents  to  it,  he  cannot  attack  the  conveyance, 
and  he  cannot,  by  making  a  colorable  assignment  of  his 
claim,  invest  another  with  the  right  to  attack  the  convey- 
ance. But  if  he  buys  a  claim  from  another  creditor  who 
had  no  knowledge  of  the  fraud,  he  succeeds  to  all  the 
rights  of  such  creditor  and  can  maintain  a  bill  to  set  the 
conveyance  aside.3 

§  288.  Lapse  of  time.  —  The  general  principle  of  equity 
jurisprudence  that  lapse  of  time,  independent  of  limita- 
tions or  simple  laches,  may  constitute  a  defense  to  a  suit, 
is  ably  considered  by  McCrary,  J.,  in  United  States  v. 
Beebee,4    in     an     action     brought    to     annul     fraudulent 


'Laches   and   limitations  apply  to  Given,  8  Johng.  (N.Y.)  1S7;  Alexander 

municipal  corporations  and    county  v.  Pendleton,  8  Cranch    162. 
commissioners.    Boone  Co.  v.  Burling-         4  17    Fed.     Rep.    37;      Laughlin    v. 

ton  &  M.  R.  R.  Co.,  139  U.  S.  693,  11  Calumet  &   Chicago  Canal   &    Dock 

S.  C.  Rep.  687.  Co.,  13  C.  C.   A.  1.  65  Fed.  Rep    ill. 

2  Trenton  Banking  Co.  v.  Duncan.  It  is  nol  easy  to  define  whal  consti- 
86  N.  Y.  229;  Randolph's  Ex'r  v.  tutes  a  stale  equity;  length  of  time 
QuidnickCo.,  135  U.  S.  457,  10  S.  C.  alone  is  not  the  test;  the  question 
Rep.  655.  must  be  determined  by  the  facts  and 

3  Johnson    v.  Rogers,  15  N.  B.  K.  I,  circumstances  of  each  case,  and  ac 
13  Fed.    Cas.    795.      See  Jackson   v.  cording  to  the  natural   principles  of 


510  LAPSE   OF   TIME.  §288 

patents.  The  court  says  in  substance  that  the  authorities 
support  the  proposition  that  lapse  of  time  may  be  a  good 
defense  in  equity,  independently  of  any  statute  of  limita- 
tions, and  it  shows  that  the  doctrine  rests  not  alone  upon 
laches  ;  it  is  often  put  upon  one  or  all  of  the  following 
grounds,  namely  :  First,  that  courts  of  equity  must,  for 
the  peace  of  society,  and  upon  grounds  of  public  policy, 
discourage  stale  demands  by  refusing  to  entertain  them  ; 
second,  that  lapse  of  time  will,  if  long  enough,  be  regarded 
as  evidence  against  the  stale  claim,  equal  to  that  of 
credible  witnesses,  and  which,  beinc:  disregarded,  would  in 
a  majority  of  cases  lead  to  unjust  judgments  ;  third,  that 
after  the  witnesses  who  had  personal  knowledge  of  the 
facts  have  all  passed  away,  it  is  impossible  to  ascertain 
the  facts,  and  courts  of  equity  will,  on  this  ground,  refuse 
to  undertake  such  a  task.  Thus  Mr.  Justice  Story  says: 
"  A  defense  peculiar  to  courts  of  equity  is  founded  upon 
the  mere  lapse  of  time,  and  the  staleness  of  the  claim,  in 
cases  where  no  statute  of  limitations  directly  governs  the 
case.  In  such  cases,  courts  of  equity  act  sometimes  by 
analogy  to  the  law,  and  sometimes  act  upon  their  own 
inherent  doctrine  of  discouraging,  for  the  peace  of 
society,  antiquated  demands,  by  refusing  to  interfere 
when  there  has  been  gross  laches  in  prosecuting  rights, 
or  long  and  unreasonable  acquiescence  in  the  assertion  of 
adverse  rights."  1  And  in  Maxwell  v.  Kennedy,2  the 
Supreme  Court  of  the  United  States,  in  answer  to  the 
argument  that  there  was  no  statute  of  limitations  applica- 
ble to  the  case  at  bar,  said  :  "  We  think  the  lapse  of  time, 
upon  the  facts  stated  in  the  bill  and  exhibits,  is,  upon 
principles  of  equity,  a  bar  to  the  relief  prayed,  without 
reference  to  the  direct  bar  of  a  statute  of  limitations." 
Chief   Justice    Fuller   says:    "In   all   cases   where  actual 

justice      tfeppacb   v.  Jones,  20  Ore.         l  2  Story's  Eq.,  §  1520. 
491,  26  Pac.  Rep.  569,  849.  •  8  How.  222. 


§  28o  LAPSE   OF    TIME.  51  1 

fraud  is  not  made  out,  but  the  imputation  rests  upon  con 
jecture,  where  the  seal  of  death  lias  closed  the  lips  of 
those  whose  character  is  involved,  and  lapse  of  time  has 
impaired  the  recollection  of  transactions  and  obscured 
their  details,  the  welfare  of  society  demands  the  rigid 
enforcement  of  the  rule  of  diligence.  The  hour-glass 
must  supply  the  ravages  of  the  scythe,  and  those  who 
have  slept  upon  their  rights  must  be  remitted  to  the 
repose  from  which  they  should  not  have  been  aroused."  ' 

§  289.  —  Again,  in  Clark  v.  Boorman's  Executors,2  the 
same  court  observed  :  "  Every  principle  of  justice  and 
fair  dealing,  of  the  security  of  rights  long  recognized,  of 
repose  of  society,  and  the  intelligent  administration  of 
justice,  forbids  us  to  enter  upon  an  inquiry  into  that 
transaction  forty  years  after  it  occurred,  when  all  the 
parties  interested  have  lived  and  died  without  complain- 
ing of  it,  upon  the  suggestion  of  a  construction  of  the 
will  different  from  that  held  by  the  parties  concerned, 
and  acquiesced  in  by  them  through  all  this  time."  In 
Brown  v.  County  of  Buena  Vista,3  the  doctrine  is 
expressed  in  these  words  :  "  The  lapse  of  time  carries 
with  it  the  memory  and  life  of  witnesses,  the  muni- 
ments of  evidence,  and  other  means  of  proof.  The  rule 
which  gives  it  the  effect  prescribed  is  necessary  to  the 
peace,  repose,  and  welfare  of  society.  A  departure  from 
it  would  open  an  inlet  to  the  evils  intended  to  be 
excluded."  In  Harwood  v.  Railroad  Co.4  the  principle  is 
concisely  and  clearly  stated  thus  :  "  Without  reference 
to  any  statute  of  limitations,  the  courts  have  adopted  the 


1  Hammond  v.  Hopkins,   143  U.  S.  S.    136,  7  S.  C.  Rep.  430;   Phillips  v. 
224,  274,  12  S.  C.  Rep.  418.  Negley,  117  U.  S.  675,  6  S.  <  '  Rep.  901  : 

2  18  Wall.  509.  Abraham  v.  Ordway,    158  U.  8.416, 

3  95  U.  S.  161.     See  Emory  v.  Pal-  15  S.  C.  Rep.  891  ;  Balsey  v.  Cheney, 
mer,  107  U.  S.  11 ;  National  Bank  v.  68  Fed.  Rep.  763. 

Carpenter,    101   U.   S.    568;   Kirby   v.  *  17  Wall.  78,  81. 
Lake  Shore  &  M.  S.  R.  R.  Co..  120  U. 


3,12  DISCOVERY    OF   THE    FRAUD.  §  290 

principle  that  the  delay  which  will  defeat  a  recovery  must 
depend  upon  the  particular  circumstances  of  each  case." 
Lord  Redesdale  observed  :  "It  is  said  that  courts  of 
equity  are  not  within  the  statute  of  limitations.  This  is 
true  in  one  respect  ;  they  are  not  within  the  words  of  the 
statutes,  because  the  words  apply  to  particular  legal 
remedies  ;  but  they  are  within  the  spirit  and  meaning  of  the 
statutes,  and  have  always  been  so  considered."  J  Import- 
ant discussions  of  this  general  principle  may  be  found  in 
Elmendorf  v.  Taylor2  and  Badger  v.  Badger.3  In  Boone 
v.  Childs 4  the  rule  is  thus  laid  down  :  "  A  court  of 
chancery  is  said  to  act  on  its  own  rules  in  regard  to  stale 
demands,  and  independent  of  the  statute.  It  will  refuse 
to  give  relief  where  a  party  has  long  slept  on  his  rights, 
and  where  the  possession  of  the  property  claimed  has 
been  held  in  crood  faith,  without  disturbance,  and  has 
greatly  increased  in  value."  In  Wilson  v.  Anthony,5  cited 
with  approval  by  the  Supreme  Court  of  the  United  States 
in  Sullivan  v.  Portland  &  Kennebec  Railroad  Company,6 
the  doctrine  is  well  stated  thus  :  "  The  chancellor  refuses 
to  interfere  after  an  unreasonable  lapse  of  time  from  con- 
siderations of  public  policy,  and  from  the  difficulty  of 
doing  entire  justice  when  the  original  transactions  have 
become  obscured  by  time,  and  the  evidence  may  be  lost." 

^j  290.  Discovery  of  the  fraud.— It  is  a  general  rule  that 
where  the  party  injured  by  the  fraud  remains  in  ignorance 
of  it,  without  any  fault  or  want  of  care  on  his  part,  the 
statute  does  not  begin  to  run  until  the  fraud  is  discovered 
by,  or   becomes   known    to,  the    party   suing,  or   those  in 


Hovenden    v.    Lord    Annesley,    2         *94U.  S.  311.     And   see  Hume  v. 

Sch   &  Let  607.  Beale,  17  Wall.  343  ;  Ball  v.  Law,  102 

10  Wheat.  172.  U.  S.  46!)  ;  Godden  v.  Kimmell,  99  0". 

'■Vail    94  S.  210  ;  Pusey  v.  Gardner,  21    W.  Va. 

1  10  Pel  481. 
•  19   Ark.   16.     See  Gibson   \     Ber 
riott,  56  \rk.  98,  L7  8.  W.  Rep  589. 


§  29l 


JUDGE    BLATCHFORD'S    VIEWS. 


-  «  i 


privity  with  him.1  "To  hold  that  by  concealing  a  fraud," 
says  Miller,  J.,  "  or  by  committing  a  fraud  in  a  manner  thai 
it  concealed  itself  until  such  time  as  the  party  committing 
the  fraud  could  plead  the  statute  of  limitations  to  protect 
it,  is  to  make  the  law  which  was  designed  to  prevent 
fraud  the  means  by  which  it  is  made  successful  and 
secure."2  This,  as  we  have  already  shown,  is  a  rule  of 
pleading,3  as  well  as  a  matter  of  evidence  or  of  defense. 
The  party  defrauded  must  be  diligent  in  inquiry.4 

§  291.  Judge  Blatchford's  views.  —  This  subject  was  ably 
discussed  in  Tyler  v.  Angevine,5  by  Blatchford,  J.,  while 
a  circuit  judge.  He  said:  "In  suits  in  equity,  the 
decided  weight  of  authority  is  in  favor  of  the  proposition, 
that,  where  the  party  injured  by  the  fraud  remains  in 
ignorance  of  it  without  any  fault  or  want  of  diligence  or 
care  on  his  part,  the  bar  of  the  statute  does  not  begin  to 
run  until  the  fraud  is  discovered,  though  there  be  no  special 
circumstances  or  efforts,  on  the  part  of  the  party  commit- 
ting the  fraud,  to  conceal  it  from  the  knowledge  of  the 
other  party.6  On  the  question  as  it  arises  in  actions  at 
law,  there  is,  in  this  country,  a  very  decided  conflict  of 
authority.  Many  of  the  courts  hold  that  the  rule  is  sustained 
in  courts  of  equity  only  on   the  ground  that  these  courts 


1  Upton  v.  McLaughlin,  105  U.  S. 
640  :  Bailey  v.  Glover,  21  Wall.  349  ; 
Gifford  v.  Helms,  98  U.  S.  248  ;  Erick- 
son  v.  Quinn,  47  N.  Y.  413  ;  Richard- 
son v.  Mounce,  19  S.  C.  477  ;  Harrell 
v.  Kea,  37  S.  C.  369,  16  S.  E.  Re]..  42  ; 
Weaver  v.  Haviland.  68  Hun  (N.  V.) 
376,  22  N.  Y.  Supp.  1012. 

2  Bailey  v.  Glover,  21  Wall.  349, 
mpra  ;  Kirby  v.  Lake  Shore  &  M.  S. 
R.  R.  Co.,  120  U.  S.  136,  7  S.  C.  Rep. 
430. 

3  See  §£  148,  149. 

4  Gillespie  v.  Cooper,  36  Neb.  786, 
55  N.  W.  Rep.  302  ;  Norris  \.  Haggin, 

33 


28  Fed.  Rep.  275  ;  O'Dell  v.  Burnbani, 
fil  Wis.  562,  21  N.  W.  Rep.  635 ;  Kuhl- 
iiKiu  v.  Baker,  50  Tex.  630;  Co< 
Lee,  75  Texas   111.  12  s.  W.  Rep.  188. 

5  15  Blatch.  541. 

6  Citing  Booth  v.  Warrington,  1 
Bro.  P.  C.  163  ;  South  Sea  Co.  v. 
Wymcmdsell,  :l  1'.  Wins.  1  1:: ;  Boven- 
den  v.  Lord  Aini^lrv,  3  Sch.  <\  I  .<  1 
634;  Stearns  v.  Page,  7  Bow.  819; 
Moore  v.  Greene.  19  Bow.  'i'.i ;  Sher- 
wood \.  Sutton,  5  Mason  143;  Snod- 
-niss  v.  Branch  Bank  of  Decatur.  25 
Ala.    Mil. 


514  JUDGE    BLATCHFORD  S   VIEWS.  £291 

are  not  bound  by  the  mere  force  of  the  statute,  as  courts 
of  common  law  are,  but  only  as  they  have  adopted  its  prin- 
ciple as  expressing  their  own  rule  of  applying  the  doctrine 
of  laches  in  analogous  cases.  They,  therefore,  make 
concealed  fraud  an  exception  on  purely  equitable  prin- 
ciples.1 On  the  other  hand,  the  English  courts,  and  the 
courts  of  Connecticut,  Massachusetts,  Pennsylvania,  and 
others  of  great  respectability,  hold  that  the  doctrine  is 
equally  applicable  to  cases  at  law.2  As  the  case  before 
us  is  a  suit  in  equity,  and  as  the  bill  contains  a  distinct 
allegation  that  the  defendants  kept  secret  and  con- 
cealed from  the  parties  interested  the  fraud  which  is 
sought  to  be  redressed,  we  might  rest  this  case  on  what 
we  have  said  is  the  undisputed  doctrine  of  the  courts  of 
equity,  but  for  the  peculiar  language  of  the  statute  we  are 
considering.  We  cannot  say,  in  regard  to  this  Act  of 
limitations,  that  courts  of  equity  are  not  bound  by  its  terms, 
for  its  very  words  are,  that  no  suit  at  law  or  in  equity 
shall  in  any  case  be  maintained  unless  brought  within  two 
years,  etc.  It  is  quite  clear  that  this  statute  must  be  held 
to  apply  equally,  by  its  own  force,  to  courts  of  equity  and 
to  courts  of  law,  and,  if  there  be  an  exception  to  the 
universality  of  its  language,  it  must  be  one  which  applies, 
under  the  same  state  of  facts,  to  suits  at  law  as  well  as  to 

suits  in  equity And  we  are  also  of  opinion,   that 

this  is  founded  in  a  sound  and  philosophical  view  of  the 
principles  of  the  statute  of  limitations.  They  were  enacted 
to  prevent  frauds  ;  to  prevent  parties  from  asserting 
rights  after  the  lapse  of  time  had  destroyed   or  impaired 

1  Citing  Troup  v.  Smith,  20  Johns.  &  C.  149;   First  Mass.  Turnpike  Co. 

:  Callia  v.  Waddy,  2Munf.  v.  Field,  3Mass.  201  ;  Welles  v.  Fish, 

(Va.)511  :  Miles  v.   Barry,  1  Bill's  (S.  3  Pick.  (Mass.)  75 ;  Jones  v.  Conoway, 

Law    296;    York     v.    Bright,    I  I    Xeates  (Pa.)    109;  Itusli    v.  Barr,  1 

Humph.  (Tenn.)  812.  Watts  (Pa.)   110;  Pennock  v.   Free 

iting    Bree    v.    Holbech.    Doug,  man,   1    Watts  (Pa.)  401  ;  Mitchell  v. 

Clark  v.  Hougham,  3  Dow],  &  Thompson,    1    McLean    96;    Carr    v. 

iranger   v    George,  5  Barn  Hilton,  I  Curtis  C.  C.  280. 


§292  STATUTE   OF    LIMITATIONS.  5  1  5 

the  evidence  which  would  show  that  such  rights  never 
existed,  or  had  been  satisfied,  transferred  or  extinguished, 
if  they  ever  did  exist.  To  hold  that,  by  concealing  a 
fraud,  or  by  committing  a  fraud  in  a  manner  that  it  con- 
cealed itself,  until  such  time  as  the  party  committing  the 
fraud  could  plead  the  statute  of  limitations  to  protect  it, 
is  to  make  the  law  which  was  designed  to  prevent  fraud, 
the  means  by  which  it  is  made  successful  and  secure." 
Mr.  Justice  Harlan  has  said:1  "  It  is  an  established  rule 
of  equity,  as  administered  in  the  courts  of  the  United 
States,  that,  where  relief  is  asked  on  the  ground  of  actual 
fraud,  especially  if  such  fraud  has  been  concealed,  time 
will  not  run  in  favor  of  the  defendant  until  the  discovery 
of  the  fraud,  or  until,  with  reasonable  diligence,  it  might 
have  been  discovered." 

§  292.  Statute  of  limitations.  —  It  follows  then  that,  as  to 
a  creditor  who  seeks  to  impeach  a  deed  made  by  his 
debtor  conveying  real  estate  to  a  third  person  in  fraud  of 
his  creditors,  the  statute  of  limitations,  when  applicable, 
begins  to  run  from  the  time  the  fraudulent  deed  is 
recorded  or  from  the  time  the  creditor  has  actual  notice 
of  the  conveyance,  whichever  first  occurs.2  In  New  York 
the  rule  has  been  laid  down  that  the  statute  does  not 
begin  to  run  until  the  creditor  has  obtained  judgment  and 
execution  has  been  returned  unsatisfied.3  It  is  familiar 
learning  that  in  the  absence  of  a  contrary  rule  established 
by  statute,  a  defendant  who  desires  to  avail  himself  of  a 
statute  of  limitations  as  a  defense,  must  raise  the  question 
either  in  pleading,  or  on   the  trial,  or   before  judgment.4 

1  Kirby  v.   Lake  Shore  &  M.  S.  R.         a  Weaver  v.    Haviland,    142    N     5 
R.  Co.,  120  U.  S.  136,  7S.C.  Rep.  430.  534,37   N.    E.   Rep.    641;    Brown    v. 

2  Hughes  v.   Littrell,    75  Mo.    573;  Campbell,  100  Cal.  685,  35  Pac.  Rep. 
Rogers  v.  Brown,  61  Mo.  187  ;  Wright  433. 

v.  Davis,  28  Neb.  479,  44  N.  W.  Rep  *  Retzer   v.  Wood,  L09   U.   8.   187,8 

490;    Conn.   Mut.    Life    Ins.   Co.    v.  S.    C.    Rep.     164;    storm    v.     United 

Smith,   117  Mo.  261,   22  S.    W.   Rep.  States.   94    U.    S.  81  ;    Upton    v.   Mc- 

628.  Laughlin,  105  U.  S.  640. 


5 16  LIMITATIONS    IN    EQUITY.  §§293-294 

Ten    years  adverse    possession   is  a  good  defense  in  Ala- 
bama to  a  suit  to  set  aside  a  deed  as  fraudulent x 

£293.  Limitations  inequity.  — In  the  consideration  of 
purely  equitable  rights  and  titles  courts  of  equity  act  in 
analogy  to  the  statute  of  limitations,2  but  are  not  bound 
by  it.3  As  was  said  in  the  case  of  Hall  v.  Russell  :  ' 
••  When  an  action  upon  a  legal  title  to  land  would  be 
barred  by  the  statute,  courts  of  equity  will  apply  a  like 
limitation  to  suits  founded  upon  equitable  rights  to  the 
same  property.  So,  in  cases  of  implied  or  constructive 
trusts,  where  it  is  sought  for  the  purpose  of  maintaining 
the  remedy  to  force  upon  the  defendant  the  character  of 
trustee,  courts  will  apply  the  same  limitation  as  provided 
for  actions  at  law."5 

§  293a.  Statute  of  frauds.  —  A  contract  to  convey  land 
in  consideration  of  labor  or  services  to  be  rendered  is 
manifestly  within  the  statute  of  frauds." 

£  294.  Insolvency  or  bankruptcy  discharges. —  I  he  insolv- 
ent laws  of  a  State  have,  manifestly,  no  extra-territorial 
force.  They  affect  only  contracts  between  citizens  of  the 
State  in  which  such  laws  were  enacted."  As  was  tersely 
stated  in  Cook  v.  Moffatt,8  a  certificate  of  discharge  will 
not  bar  an  action  brought  by  a  citizen  of  another  State 
on  a  contract  with   him.      Such  was  the  conclusion  of  the 


Snedecor   v.  "Watkins,  71    Ala.  Is.  pet.   66;    Beaubien   v.    Reaubien,   23 

See     Metropolitan     Bank    v.    St.  Bow.  207,  to  which  may  be  added, 

Louis  Dispatch  Co..  149  U.S.  148, 13  S.  Wisner  v.  Barnet.  \  Wash.  C.  C.  638; 

C    Rep.  944  ;  Whitridge  v.  Whitridge,  Kane  v.  Bloodgood,  7  Johns.  Ch.  (N. 

76Md.85,    24    A.tl.  Rep.  645 ;  Godden  Y.)  110 ;   Michoud   v.   Girod,    1   How. 

v.  Kimmell,  uu  U.  s.  201:  Hammond  560. 

v.  Hopkins,  1  13  r.  s.  274,  l.-s  C.  Rep.  B  Masterson    v.   Little,  75  Tex.  68*, 

418.  13 S.  W.  Rep.  154  ;Spraguev.  Haines, 

Manning   v.    Hayden,    5    Sawyer  68  Tex.  217,  4  S.  W.  Rep.  371. 

•Hills    v.    Carlton,     74    Me.     L56 ; 

twyer  515.  Rhawn  v.  Pearce,  110  111   350. 

Citing    Elmendorf    v.   Taylor,     10  s5How.295 
Wheat.    176  ;    Miller   v.    Mclntyre,   (i 


>M 


BANKRl    PTCV     DIS(   IIARG1  S. 


Supreme  Court  of  Maine  in  Felch  v.  Bugbee,1  where  this 
question  is  most  carefully  examined;  and  in  Baldwin  v. 
Hale,2  citing  that  case  with  approbation,  the  court  decided 
that  a  discharge  under  the  insolvent  law  of  one  State  was 
not  a  bar  to  an  action  on  a  note  given  and  payable  in  the 
same  State,  the  party  to  whom  the  note  was  given  being 
a  resident  of  a  different  State,  and  not  having  proved  his 
debt  against  the  defendant's  estate  in  insolvency,  nor  in 
any  manner  having  been  a  party  to  the  proceedings.'1  In 
Pratt  v.  Chase4  it  is  said  that  "as  to  creditors  of  the 
insolvent  who  are  not  citizens  of  the  same  State  where 
the  discharge  is  granted,  the  want  of  binding  force  to 
defeat  the  obligation  of  a  contract  is  founded  upon  the 
want  of  jurisdiction  over  such  creditors."5  A  debt  con- 
tracted and  payable  in  a  foreign  country  is  not  barred  by 
a  discharge  under  the  United  States  Bankrupt  Act,  where 


1  48  Me.  9  ;  Silverman  v.  Lessor,  88 
Me.  605. 

■}  1  Wall.  223.  In  Brown  v.  Smart, 
145  IT.  S.  457,  the  court  says:  "So 
long  as  there  is  no  national  bankrupt 
act,  each  State  has  full  authority  to 
pass  insolvent  laws  binding  persons 
and  property  within  its  jurisdiction, 
provided  it  does  not  impair  the  obli- 
gation of  existing  contracts  ;  but  a 
State  cannot,  by  such  a  law,  (lis 
charge  one  of  its  own  citizens  from 
his  contracts  witli  citizens  of  other 
States,  though  made  after  the  passage 
of  the  law,  unless  they  voluntarily 
become  parties  to  the  proceedings 
in  insolvency.  Sturges  v.  Crownin- 
shield,  4  Wheat.  122  ;  Ogden  v.  Saun- 
ders, 12  Wheat.  213;  Gilman  v.  Lock- 
wood,  4  Wall.  409." 

3  See  Guernsey  v.  Wood,  130  Mass. 
503  ;  Bedell  v.  Scruton,  54  Vt.  493  ; 
Watson  v.  Bourne,  10  Mass.  337 ; 
Phelps  v.  Borland,  30  Hun  (N.  Y) 
362,  366,  17  Weekly  Dig.  (N.  Y.) 
556;  McMillan  v.  McNeill,  4  Wheat. 


209;  Hale  v.  Baldwin.  1  Clitl.  517, 
affi'd  as  Baldwin  v.  Hale,  1  Wall. 
223;  Boyle  v.  Zacharie,  6  Pet.  635, 
648;  Soule  v.  Chase,  39  N.  Y.  342; 
Ogden  v.  Saunders,  \2  Wheal.  313; 
Green  v.  Sarmiento,  1  Pet.  ( '.  I  1  ;  . 
Palmer  v.  Goodwin,  32  Me.  535  :  Very 
v.  McHenry,  29  Me.  206  ;  Fiske  v.  Fos- 
ter, 10  Met.  (.Mass.  |  597  ;  ( 'ha-.-  \ . 
Flagg,  48  Me.  L82  ;  Savoye  v.  .Marsh. 
10  Met.  (Mass.)  594  ;  Bell  v.  Lamprey, 
1  Am.  Insolv.  Rep.  it) :  Scribner  \ . 
Fisher,  2  Gray  i  Mas-,.)  13;  Smith  v. 
Smith,  2  Johns.  I  X.  V.  I  335  ;  Gardner 

v.  Oliver  1 '-  Bank,  1 1  Barb,  i  N.  Y.  i 

558  :  Towne  v.  Smith.  I  Woodb.  &  M 
115;   Peck    v.    Eibbard,    26    Vt.    698  ; 

Eawley  v.  Hunt, -J?  rowa  303  ;  W I- 

bridge  v.  Allen.  12  Met.  i  Mass.  170  : 
Beer  v.  Hooper,  32  Miss.  346  ;  Ander- 
son v.  Wheeler.  25  Conn.  608;  (row 
v.  Coons.  27  Mo.  512. 
*44N.  V.  597. 
1  *.iit  compare  Murray  v.  Rotten. 
ham.  6  Johns.  Ch.    N     > 


EXISTING   CREDITORS. 


§295 


the  creditor  was  not  a  party  to  and  had  no  personal 
notice  of  the  proceedings  in  bankruptcy.1  The  discharge 
of  the  debtor  is  not  necessarily  a  bar  to  the  creditor's 
proceedings  to  reach  property  fraudulently  alienated. 
Thus,  in  State  v.  Williams,"  it  appeared  that  A,  having 
made  a  fraudulent  conveyance  of  his  real  estate,  was 
afterward  sued  by  B.  During  the  pendency  of  the  suit, 
A  filed  his  petition  in  bankruptcy,  and  obtained  his  dis- 
charge before  judgment  was  had  against  him.  After- 
ward B  filed  a  bill  to  set  aside  the  fraudulent  conveyance, 
and  to  subject  the  property  to  the  payment  of  the  judg- 
ment against  A.  The  court  held  that  the  discharge  in 
bankruptcy  was  no  bar  to  the  proceeding.  The  creditor's 
proceedings  are  quasi  in  rem? 

§  295.  Existing  and  subsequent  creditors.  —  It  is  said  in 
Collins  v.  Nelson  4  that,  in  a  suit  by  a  creditor  to  set 
aside  a  conveyance  of  real  estate,  alleged  to  have  been 
executed  by  his  debtor  for  the  fraudulent  purpose  of 
cheating,   hindering    and    delaying  the    creditor    in    the 


McDougall    v.    Page,   55    Vt.    L87, 
28   Alb.   L.  J.   372;  See  McMillan  v. 
McNeil,  -1  Wheat.  309  ;  Smith  v.   Bu- 
chanan, 1  East  6;  Klli^  v.  McHenry, 
!..  R.  6  I     P.  22 
•  9  Baxt.  (Tenn.)  64. 
A    plea  of  discharge  under  a  for- 
Lnsolvency  law  must  Bel  forth  the 
law  under  which  it  was  procured,  and 
show  that  it  discharged  the  debt  sued 
upon.     Baker  v.  Palmer,  1  Am   [nsolv. 
Rep  eas  granted 

under  the   United    States    Bankrupl 
\<[  to  corporations.     AnsoniaB.  &C. 
•  u    Lamp  <  Ihimney   Co.,  53 
N.  \     12  ;.     I  0  -  ure  the  benefil  of  a 
harge  in  bankruptcy  it  should  be 
promptly  interposed  as  a  defense  to 
a  pending  against  t he  bank- 
rupl     Dimock  v.  Rei  ere  I  topper  Co., 
ll?i      3.   559.  8  s  C.   Rep.  855,  and 


a  cited;  Bradford  v.  Rice,  102 
Mass.  472;  Hollister  v.  Abbott,  31 
N.  II.  442.  As  to  attacking  a  dis- 
charge, see  Poillon  v.  Lawrence,  i? 
X.  V.  207,  ami  casos  cited.  As  to 
claims  barred  ami  not  barred,  see 
Eennequin  v.  Clews,  111  I".  S.  676,  I 
s.  t '.  Rep.  576;  Strang  v.  Bradner, 
ill  I '.  s.  555,  5  s.  ( '.  Rep.  10as  ;  Noble 
v.  Hammond,  129  V.  S.  69,  9  S.  C. 
Rep.  235;  Ann-,  v.  Moir,  138  U  S.  311, 
11  S.  c  Rep.  311.  It  may  be  here 
noted  that,  in  New  Fork,  an  impris- 
oned debtor  is  not  entitled  to  a  dis- 
charge upon  making  a  voluntary 
gnment  under  the  statute  it'  it  is 
shown  that  he  made  a  disposition  of 
his  property  with  intent  to  defraud 
creditors.  Matter  of  Brady,  69  N.  Y. 
215,  1  Am  [nsolv.  Rep.  102. 
•m  End.  7.-.. 


§  296,  297  GIFT   OF    LAND.  5  [9 

collection  of  the  debtor's  indebtedness  to  him,  the  answer 
of  the  debtor  to  the  effect  that,  at  the  time  of  the  com- 
mencement of  the  suit,  no  part  of  his  indebtedness  to  the 
creditor  was  due  and  unpaid,  will  constitute  a  complete 
defense  in  bar  of  such  suit.  This  statement  is,  it  seems 
to  us,  misleading.  As  is  elsewhere  shown,  subsequent 
creditors  may  attack  conveyances  made  with  the  inten- 
tion to  avoid  future  liabilities  l  or  schemes  of  fraud,  or 
to  place  the  risks  of  new  ventures  and  speculations  upon 
the  creditor's  shoulders.2 

§  296.  Sufficient  property  left— Gift  of  land.  — The  general 
rule  applicable  to  conveyances  of  both  real 3  and  per. 
sonal  property,4  as  announced  by  the  Supreme  Court  of 
Indiana,  is,  that  a  sale  cannot  be  impeached  as  fraudulent 
unless  it  is  shown  that  the  debtor  had  no  other  property 
subject  to  execution  at  the  time  the  conveyance  was 
made.5     This  is  also  a  rule  of  pleading.6 

Where  a  father  in  solvent  circumstances  made  an  oral 
gift  of  land  to  his  son,  who  entered  into  possession  and 
made  lasting  improvements  on  the  property,  the  latter 
was  considered  to  have  a  good  title  as  against  creditors 
of  the  father.7  "  Taking  possession  under  a  parol  agree- 
ment with  the  consent  of  the  vendor,  accompanied  with 
other  acts  which  cannot  be  recalled  so  as  to  place  the 
party  taking  possession  in  the  same  situation  that  he  pre- 
viously occupied,  has  always  been  held  to  take  such 
agreement  out  of  the  operation  of  the  statute"  of   fraud. 

§  297.  What  sheriff  must  show  against  stranger. —  As  a 
general  rule  process   regular  on   its  face,  and  issued   by  a 

1  See  Chap.  VI,  g$  96-101.  6  See  §  140. 

2  See  §100.  1  Dozier  v.  Matson,    94   Mo. 

3  Hardy  v.    Mitchell,    67  Ind.  485;      S.  W.  Rep.  268. 

Nohlev.  Hines,  72  Ind.  12  ;  Spaulding  B  Sedg.  &  Wait  on  Trial  of  Title  to 

v.  Blythe,  73  Ind.  93.  Land  (2ded.),  §321a;    Lowrj  v.  Tew, 

«Rose  v.  Colter,  76  Ind.  592.  3  Barb.  1  !h.  (N.  Y.  I  407;   Freeman  v 

5  See  Emerson  v.  Opp,   139  Ind.  27.  Freeman,  13  N.  Y.  34. 
38  N.  E.  Rep.  330. 


520  SET-OFF  —  CONSIDERATION.  §§  297a,  297b 

tribunal  or  officer  having  authority  to  issue  it,  is  sufficient 
to  protect  the  officer,  although  it  may  have  been  irregu- 
larly issued.  But  when  an  officer  attempts  to  overthrow 
a  sale  by  a  debtor  on  the  ground  that  it  was  fraudulent  as 
to  creditors,  he  must  go  back  of  his  process  and  show  the 
authority  for  issuing  it.  If  he  acts  under  an  execution,  he 
must  show  a  judgment;  and  if  he  seizes  under  an  attach- 
ment, he  must  show  the  attachment  regularly  issued.1 

§  297a.  Set-off.  - —  The  cases  relating  to  set-off  are  full  of 
technical  statements.  The  field  is  a  broad  one.  We  may 
observe  that  where  an  assignee  seeks  to  enforce  a  bond 
and  mortgage  which  was  part  of  the  assigned  estate,  the 
defendant  mortgagor  is  entitled  to  set-off  in  equity  a  debt 
due  to  him  from  the  assignor,  though  the  mortgage  may 
not  have  been  due  when  the  assignment  was  made." 

§  297b.  Attacking  consideration  and  good  faith. — The  sub- 
ject of  consideration  is  elsewhere  discussed.3  A  mortgagor 
may,  in  defending  foreclosure,  show  want  of  considera- 
tion, and,  when  this  is  shown,  the  mortaaofee  cannot 
rebut  the  defense  by  proving  that  the  notes  and  mortgage 


1  Keys    v.    Grannis,   3     Nev.    550;  41 ;  Savage  v.  Smith,  2  W.  Bl.  1104; 

Thornburgh  v.  Sand  7  Cal.  561.     See  Bac.  Abr.  Trespass,  G.  1."     See,  also, 

81.     In    Damon  v.   Bryant,  2  Pick.  Hargetv.    Blackshear,   1  Taylor    (N. 

(Mass.)  413,  Chief -Justice  Parker  said:  C. )  »107  ;  High  v.    Wilson,   2  Johns. 

"  Where  the  goods  taken  are  claimed  (N.  Y.)  46;  Doed.   Bland   v.  Smith, 

l>\  a  person  who  was  not  a  party  to  the  2  Stark.  199;  Weyand  v.  Tipton,    5 

suit,   and   be  brings  trespass,  and  his  Serg.   &  R.    (Pa.)  332;  Casanova    v. 

title    is   contested    on   the  ground  of  Aregno,    3    La.    211;  Trowbridge    v. 

fraud,  under  the  statute  13  Eliz.  c.  5,  Bullard,  81  Mich.  451,  45  N.  W.  Rep. 

a  judgmenl    musl    be    shown   if  the  1012;    Bartlett  v.   Cheesebrough,    32 

officer  justifies  under  an  execution,  or  Neb.  339,  49  N.  W.  Rep.  360. 

a  debt  it  under  a  writ  of  attachment,  '-'  Richards  v.   La  Tourette,  119   N. 

because  it  is  only  by  showing  that  he  Y.  54,  23  N.   E.  Rep.  531.     See  Roths- 

acted  f<>!  a  creditor,  that  he  can ques-  child  v.  Mack,  115  N.  Y.  1,  21  N.  E. 

tion  thetitleof  the  sendee,     The  au-  Rep.  726;  Smith  v.  Felton,  43  N.  Y. 

tborities  to  this  poinl  arc  Lake  v.  Bil-  419. 

lers,    1    Ld.   Raym.   783 ;  Bull.   N.  P.  'SeeChap.XV. 
91,  2->  I  .   A ck worth  v.  Kenipe,  Doug. 


§  29/c 


\\  HEN  f'.<  >\  I  R<  >VERSIES  N(  >  I    SEP  \k.\i:l  I  . 


521 


were  also  given  to  defeat  creditors.1  A  trust  deed  made 
with  the  design  of  preventing  the  enforcement  of  a  judg- 
ment for  alimony,  will  not  be  enforced  in  a  court  of 
equity,2  and  the   facts   may  be  brought    out  as  a  defense. 

§  297c.  When  controversies  not  separable.  —  In  a  suit  by 
an  assignee  for  the  benefit  of  creditors,  to  disencumber  a 
fund  of  alleged  liens  claimed  by  different  creditors,  the 
fact  that  each  defendant  had  a  separate  defense  will  not 
create  a  separable  controversy  as  to  each.3 


1  Clark    v.    Clark.    62    N.    H.    271  ; 
Wearse  v.  Pierce,  24  Pick.  (Mass.)  141. 

2  Scott   v.    Magloughlin,   138   [1136, 
24  N.  E.  Rep.  1030. 

3  Rosenthal    v.    Coates,    148   U.    S. 
143, 13  S.  C.  Rep.  576.     See  Fidelity  1 11s. 


T.  &S.  D.  Co.  v.  Huntington.  117  I'.  S. 
280,  6  S.  C.  Rep.  733 :  Young  v.  Par- 
ker, 132  U.  S.  207.  Hi  S  C.  Rep.  75  ; 
Graves  v.  Corbin,  132  U.  S.  586,  10 
S.  C.  Rep.  196;  Brinkerhoff  v,  Brown, 
6  Johns.  Oh.  (N.  V.)  139. 


CHAPTER  XX. 

HUSBAND  AND    WIFE  —  FRAUDULENT    MARRIAGE 
SETTLEMENTS. 


§298. 
299. 
299a 
300. 

301. 
302. 


303. 
304. 
305. 

305a 
306. 


Tbe  marriage  relationship. 

Wife  as  husband's  creditor. 

.  Claim  for  support. 

Transactions  between,  how  re- 
garded. 

Burden  of  proof. 

Mutuality  of  fraudulent  design 
in  cases  of  ante-nuptial  settle- 
ments. 

Husband  as  agent  for  wife. 

Wife's  separate  property. 

Mingling  property  of  husband 
and  wife. 
Book  entries  of  transactions. 

Marriage  settlements — Amount 
of  settlement. 


§  307.  Post  nuptial  settlement. 

308.  Purchase   by  wife    after    mar- 

riage. 

309.  Valid  gifts  —  Subsequent  insol- 

vency. 

310.  Articles  of  separation. 

311.  Statute  of  frauds. 

312.  Policies  of  insurance. 

313.  Competency  of  wife  as  witness. 
314    Fraudulent  conveyances  in  con- 
templation of  marriage. 

315.  Fraudulent  transfers  as  affect- 
ing dower. 
315a.  Judgment  against  wife. 


§  298.  The  marriage  relationship.  —  It  would  be  impracti- 
cable to  devote  separate  chapters  to  the  consideration  of 
the  different  frauds  upon  creditors  incident  to  each  of  the 
various  relationships  recognized  by  law;  but,  as  the  fair- 
ness and  good  faith  of  transactions  and  conveyances 
between  husband  and  wife  are  so  frequently  challenged 
and  assailed  by  creditors,  the  rules  and  decisions  govern- 
ing this  branch  of  our  subject  must  be  discussed.  As 
will  appear,  husband  and  wife  have  been  made  by  legisla- 
tion independent  legal  personages.1  A  debtor,  when 
threatened  with  insolvency,  naturally  reposes  confidence 
in  his  wife  ;  the  relationship  inspires  this  confidence, 
and   it   very   often   results    that  she    becomes  wrongfully 


I-"         Page,    Ml    U.  8.  118,      88  N.  Y.  304  ;  Manchester  v.  Tibbetts, 
4  s.  C    Rep.  888;  Whiton   v.  Snyder,      121  N.  Y.  219,  24  N.  E.  Rep.  304. 


§  299 


WIFE    AS    HUSBAND  S    CRED1  n  >R. 


5-3 


possessed  of  "  the  creditor's  trust  fund,"  so  called.  The 
statutes  conferring  upon  married  women  the  power  to 
hold  and  convey  property  much  the  same  as  though  they 
were  single,  have  unfortunately  encouraged  husbands  to 
confide  to  the  keeping  of  their  wives  property  which 
should  have  been  turned  over  to  creditors  or  held  subject 
to  their  process.  Frauds  committed  by  the  husband  and 
wife  upon  one  another,  or  in  contemplation  of,  or  after 
entering  into  the  relationship,  will  call  for  incidental  dis- 
cussion as  we  proceed. 

§  299.  Wife  as  husband's  creditor.—  A  wife  can  become  a 
creditor  of  her  husband,1  and  he  may  pay  an  honest  debt 
to  her,2  though  as  to  other  creditors  the  claim  may  appear 
stale  and  ancient.  The  debtor  is  not  compelled  by  law 
to  resort  to  the  statute  of  limitations  as  a  defense,3  nor 
can  others  interfere  or  insist  upon  it  for  him,  nor  is  the 
wife  estopped  to  receive  payment  of  a  debt  of  this  char- 


1  Garr  v.  Klein,  93  Iowa  313  ;  Man- 
chester v.  Tibbetts,  121  N.  Y.  219.  21 
N.  E.  Rep.  304  ;  Robinson  v.  Stevens, 
93  Ga.  538.  21  S.  E.  Rep.  96  ;  Romans 
v.  Maddux,  77  Iowa  203,  41  N.W.  Rep. 
763  ;  Ardis  v.  Theus,  47  La.  Ann.  1438, 
17  80.  Rep.  865  ;  Stramann  v.  Schee- 
ren,  7  Col.  Ct.  App.  1,  42  Pac.  Rep. 
191 ;  First  Nat.  Bk.  v.  Kavanagh,  7  Col. 
Ct.  App.  160,  43  Pac.  Rep.  217;  Wil- 
liams v.  Harris,  4  S.  Dak.  22,  54  N. 
W.  Rep.  926. 

8  Patton  v.  Conn,  114  Pa.  St.  183,  6 
Atl.  Rep.  468:  Hewitt  v.  Williams,  47 
La.  Ann.  712  ;  Fulp  v.  Beaver,  136 
Ind.  319,  36  N.  E.  Rep.  250  ;  Robinson 
v.  Stevens,  93  Ga.  535,  21  S.  E.  hep. 
96  ;  Lassiter  v.  Hoes,  11  Misc.  (N.  Y.) 
1,  31  N.  Y.  Supp.  850  ;  Hugbes  v.  Bell, 
62  111.  App.  74  ;  National  Bank  of  Re- 
public v.  Dickinson,  107  Ala.  265,  18 
So.  Rep.  144;  Tarsney  v.  Turner,  48 
Fed.  Rep.  818.  Where  money  was 
loaned  in  good  faith  by  the  wife  to 


the  husband,  it  is  no  objection  to  the 
validity  of  the  deed  of  the  land  given 
in  repayment  of  such  loan  t  li.it  it  was 
given  after  a  creditor  bad  recover.. I 
judgment.  Qaar  v.  Klein,  93  Iowa 
313,  01  X.  W.  Rep.  wis:  cf.,  Carson  v. 
Stevens,  40  Neb.  112,  58  N  W.  Rep. 
845.  In  Woodbridge  v.  Tilton,  84 
Me.  95.  24  Atl.  Rep.  583,  the  court 
says:  "A  husband  who  is  justly  in- 
debted to  Ins  wife  may  appropriate 
his  property  to  the  payment  of  her 
claim,  io  the  exclusion  of  his  other 
creditors.  Ferguson  v.  Spear,  65  Me 
277."  See  DeBerry  v.  Wheeler,  128 
Mo.  84,  30  S.  W.  hep  388;  Winfield 
Nat.  Hank  v.  Croco,  4'i  Kan.  629,  26 
Pae.  Rep.  942.  See  Schreyi  r  v.  Scott, 
134  U.  S.  405,  H»  s.  c.  Rep 

Manchester  v.  Tibbetts,  121  N  V 
219,  24  X.  E.  lop.  -ot  ;  Burnham  \ 
McMichael,  6  Tex.  Civ.  App.    196,  26 

S.    \\  .   h'e]  1.  887. 


524 


WIFE     VS    II  (JSBAND  S    CREDIT!  >R. 


.:  299 


acter.1  She  has  the  same  standing  as  any  other  creditor.- 
The  rule  as  it  prevailed  at  common  law  was,  that  a  hus- 
band could  not  contract  with  his  wife.  Her  money  not 
held  to  her  separate  use,  coming  into  his  possession,  was 
regarded  as  his  property  ;3  and  his  promise  to  repay  such 
money  to  her  could  not  be  enforced  either  at  law  or  in 
equity.4  This  rule,  as  we  have  said,  has  now  been  almost 
universally  abrogated.5  In  many  respects  a  wife  may, 
under  the  existing  policy  of  the  law,  deal  with  her  hus- 
band, as  regards  her  separate  estate,  upon  the  same  terms 
as  though  the  relationship  had  no  existence.  "  When  the 
wife,  by  proper  and  sufficient  proof,  shows  that  her  hus- 
band owes  her,  she  is  entitled  to  the  same  remedies  and 
has  the  same  standing  to  enforce  any  security  for  the 
payment  of  the  debt  that  she  may  have  received  as  any 
other  creditor."6  Thus,  in  a  case  in  Massachusetts,  in 
which  the  opinion  was  rendered  by  Chief-Justice  dray, 
now    one    of    the    justices    of    the     Supreme    Court   of 


1  Brookville  Nat.  Bank  v.  Kimble, 
7C  ln.l.  195. 

•  Manchester  v.  Tibbetts,  121  N.  Y. 
219,  24  .V  I-:.  Rep.  304. 

8  Joiner  v.  Franklin,  12  B.  J.  Lea 
(Tenn.)  422,  Whiton  v.  Snyder,  88  N. 
Y  302;  rates  v.  Law,  si;  Va.  117,  9 
S.  E.  Rep.  Vis  :  Granl  v.  Sutton,  90 
Va.  771,  I'.i  S.  K.  Rep.  784. 

'  Atlantic  Nat.  Bank  v.  Tavener, 
130  Mass  109;  Vlexander  v.  Crit- 
tenden, 4  Allen  (Mass.)  342;  Turner 
<  Nye,  7  Allen  (Mass.)  176  ;  Phillips 
v.  Frye,  it  Allen  (Mass.)  36;  Degnanv. 
Farr,  12(5  Mass.  397,  299 :  Kesner  v. 
Trigg,  98  U.  S.  54 ;  Jaffrey  v.  Mc- 
Gough,  88  Ala.  202,  3  80.  Rep.  594. 
In  West  Virginia  (Miller  v.  Cox,  38 
W  Va.  717,  18  8.  K.  Rep.  960  :  Kana- 
wha Valley  Hank  v.  Atkinson,  82  W. 
Va  203,  9  s.  1:.  Rep.  175)  it  is  held 
that  the  presumption  <>r  law,  where 
money  is  delivered  l>\  a  wife  t<>a hus- 


band, is  that  it  is  a  gilt,  which  pre 
sumption  can  only  be  overcome  bj 
cdear  evidence  of  a  contrary  under- 
standing. But  see  Hood  v.  Jones,  "i 
Del.  Ch.  77.  Compare  Iseminger  v. 
CrisweU  (Iowa,  1896)  (17  X.  W.  Rep. 
289. 

'Towers  v.  Eagner,  3  Whart, 
(Pa.)  48;  Johnston  v.  Johnston, 
1  Grant  (Pa.)  468;  Kutz's  Appeal. 
10  Pa.  St.  90;  Grabill  v.  Mover, 
45  Pa  St.  530  ;  Atlantic  Nat.  Bank 
v.  Tavener,  130  Mass.  409;  Bab- 
cock  v.  Eckler.  24  N.  Y.  623 
Whiton  v.  Snyder,  88  N.  Y.  299: 
Savage  v.  O'Neil,  44  N.  Y.  298  ;  Stead- 
man  v.  Wilbur,  7  R.  I.  181  ;  //;  re 
Blandin,  1  Lowell  543;  Horton  v. 
Dewey,  53  Wis.  410,  10  N.  W.  Rep 
599. 

•  Manchester  v.  Tibbetts,  121  N.  Y. 
222,  24  N.  E.  Rep.  304. 


§  2(J9  V\  III'.   AS    HUSBAND'S    l  REDITOR. 

the  United  States,  it  was  decided  that  where  a 
wife  loaned  to  her  husband  upon  a  promise  of  repay- 
ment money  constituting  a  part  of  her  separate  estate, 
a  conveyance  of  land  made  by  him  to  her,  through  a 
third  person,  in  repayment  of  such  loan,  and  free  from 
a  fraudulent  design,  would  be  valid  against  his  creditors.1 
A  husband  may,  of  course,  give  his  wife  a  mortgage  to 
secure  a  valid  debt.2  The  wife  may  loan  monev  to  her 
husband  and  he  has  the  right  to  prefer  her,3  and  the  wife 
when  not  questioned  is  not  bound  to  proclaim  the  fact 
that  she  is  a  creditor.4  While  a  husband  has  a  risrht  to 
pay  his  wife  a  bona  fide  debt,  yet  a  deed  by  the  husband 
to  the  wife  cannot  be  supported  as  being  founded  upon  a 
valuable  consideration  which  rests  upon  his  mere  volun- 
tary promise  that  he  would  at  some  time  give  her  a  sum 
of  money  ; 5  nor  will  it  be  upheld  where  the  consideration 
is  grossly  inadequate.6 

Manifestly  a  wife's  relinquishment  of  her  dower  right 
is  a  sufficient  consideration  for  a  reasonable  settlement 
upon  her  out  of  the  husband's  property.7  But  joining  in 
a  release  of  property  incumbered  to  almost  its  full  value, 
is  not  sufficient  consideration  to  support  a  conveyance  of 
other  realty  by  the  husband  to  the  wife  ;8  and  where  the 
value  of  the  property  greatly  exceeds  the  value  of  the 
dower  right,  the  deed  will  be  set  aside  as  to  such  excess  '•' 

1  Atlantic   Nat.   Bank     v.  Tavener,  3  Laird   v.   Davidson,    1'24  Ind.    111. 

130  Mass.  407  ;  followed  and  approved  25  X.  E.  Rep.   7;  Strauss  v.   Parshall, 

by  the  United  States  Supreme  Court  93  Mich.  475.  51  X.  W.  Rep.  1117. 

in  Medsker  v.  Bonebrake,  108  U.  S.  'Robinson    v.  Stevens,  93  Ga 

66,  2  S.  C.  Rep.  351.     See  Tomlinson  21  S.  E.  Rep.  «-#»;. 

v.   Matthews,   9S    111.   178;  Jewett    v.  ■'•Wynne    v.    Mason,  72  Miss.    183    L8 

Noteware,     30    Huh     (N.    Y.)    194;  So.  Rep.  422. 

French   v.   Motley,  63  Me.  326 ;  Gra-  'Case    Manufacturing   Co.    v.    Per- 

bill  v.  Mover,  45   Pa.  St.  530;  Stead-  kins  (Mich,  1895),  64  N.   W.  Rep.  301. 

man  v.   Wilbur,   7  R.    I.   481:  Lang-  Eershy  v.  Latham. 46   \rk.  542. 

ford  v.  Thurlby,  60  Iowa  105,  14   N.  'Commonwealth  [ns.&TrustCo  v 

W.  Rep.  135.  Brown.  166 Pa. St.  477, 31   Ml   Rep  205 

'Spaulding  v.  Keyes,  125N.  Y.113,  'Glascock    v.   Brandon,  35  W.  Va. 

26  N.  E.  Rep.  15.  84,112  S.  E.  Rep.  1 102. 


526  CLAIM    FOR    SUPPORT.  §§  299a,  300 

§  299a.  Claim  for  support. —  As  has  already  appeared, 
a  wife  may  bring  suit  to  annul  a  conveyance  made  to 
defeat  her  claim  for  alimony,1  but  it  seems  to  be  doubted 
in  a  recent  Connecticut  case2  whether  the  debt  or  duty 
to  support  the  wife,  which  is  a  continuing  one,  is  a  debt 
or  duty  within  the  protection  of  the  statute,  or  the  rules 
of  the  common  law  against  fraudulent  conveyances.  The 
court  says:  "We  are  not  aware  of  any  case  anywhere, 
which  holds  that  a  duty  of  this  kind  is  within  the  protec- 
tion of  any  statute,  or  of  the  rules  of  the  common  law, 
against  fraudulent  conveyances  The  duty  protected  by 
such  rules  or  statutes  is  generally  some  particular  spe- 
cific duty  to  pay  money  or  money's-worth,  and  not  a 
general  continuing  duty,  like  this  of  support,  to  pursue  a 
certain  course  of  conduct."  Naturally  the  rule  that  a 
conveyance  made  to  defeat  a  contingent  claim  will  be 
overturned,  should  be  applied  to  the  case  of  a  failure  to 
discharge  the  duty  of  support. 

§  300.  Transactions  between—  How  regarded.  —  Transac- 
tions between  husband  and  wife,  to  the  prejudice  of  the 
husband's  creditors,  are,  however,  to  be  scanned  closely,3 
and  their  bona  fides  must  be  clearly  established,4  as  fraud 


'See    ?    90.      Chase  v.    Chase,   105  Rep.   580;    Skellie   v.   James,  81   (ia. 

Mass.  385  ;  Livermore  v.  Boutelle.  11  11'.),  s  S.   E.  Rep.  GOT;     Brownell  v. 

Gray  l  M.-bs.  >  217;  Stoddard,  42  Neb.  184,  60  N.  W.  Rep. 

"Ullrich  v.    Ullrich,  63  Conn.  585.  380;   Wynne  v.  Mason,  72  Miss.  433, 

Eershy    \     Latham,  40  Ark.  550;  L8  So.  Rep.  422  ;  Billington  v.  Sweet- 

Graves  v.    Davenport,   50  Fed.   Rep.  ing,  172  Pa.  St.  161,  33  Atl.  Rep.  548  ; 

881  ;  White  v.   Benjamin,  150  X.   V.  Reese  v.    Reese,   157  Pa.  St.   200,  27 

.1    N     i:     Rep.    956;    Duttera  v.  Ml.   Rep.  70:5 :  Town  of  Norwalk  v. 

Babylon,  -:;  Md.  544,  35  AH.  Rep.  64;  [reland,  68Conn.  1 4,  35  Atl.  Rep.  804. 

Robinson  v.  Clark,  76  Me.  494 ;  Frank  *Booher    v.    Worrill,   57  Ga.    235. 

v.King,    121    111     254,    L2   N.   E.  Rep.  See  Thompson  v.  Feagin,  60  Ga.  82 ; 

Williams  v.  Barris,4S   Dak.  22,  Hinkle  v.  Wilson,  :>■',  Md.  292;  Seitz 

■"■I    N     W.    Rep.   926;    Binchman    v.  v.  Mitchell,  94  D".  S.  584  ;  Lee  v.  Cole, 

Parlin  &  O.  Co.,  71    Fed.   Rep.  698  ;  44  N.  J.  Eq.  828,   15  Atl.    Rep.  531; 

Kennedy  v.  Lee,  72  Ga.  10;  Gross  v.  Webb  v.  [ngham,  29  W.  Va.  389,  1  8. 

Eddii                                 3  8.   W.   Rep.  E    Rep.  816 ;  Curtis  \.  Wortsman,  2fi 

L ;  Reese  v.  Shell, 95  Ga.  750,  22  S.  E.  Fed.    Rep.   893;    Bayne   v.   state,   02 


§  300  TRANSACTIONS    BETWEEN.  5.;; 

is  so  easily  practiced  and  concealed  under  cover  of  the 
marriage  relation.1  Lord  Mardwicke  said:  "1  have 
always  a  great  compassion  for  wife  and  children,  yet.  on 
the  other  side,  it  is  possible,  if  creditors  should  not  have 
their  debts,  their  wives  and  children  may  be  reduced  to 
want."  The  court  observed  in  Hoxie  v.  Price:2  "On 
account  of  the  great  facilities  which  the  marriage  relation 
affords  for  the  commission  of  fraud,  these  transactions 
between  husband  and  wife  should  be  closely  examined  and 
scrutinized.3  to  see  that  they  are  fair  and  honest,4  and 
not  mere  contrivances  resorted  to  for  the  purpose  of 
placing  the  husband's  property  beyond  the  reach  of  his 
creditors."  In  all  such  cases  the  parties  are  under  temp- 
tation to  do  themselves  more  than  justice.5  What  is 
secured  to  the  one  is  apt  to  be  shared  by  the  other.  Ordi- 
narily the  claim  of  a  creditor  against  a  debtor  is 
antagonistic,  but  in  this  class  of  cases  they  are  sure  to  be 
in  harmony,  the  debtor  supporting  the  claims  of  the  cred- 


Md.  103  :  Grant  v.  Sutton.  90  Va.  771,  be  regarded  with  watchful  suspicion, 

19  S.  E.  Rep.  784;  Kemp  v.  Folsom,  and,  when  attempted  to  be  asserted 

14  Wasli.  16,  43  Pac.  Rep.  1100.     See  against  creditors  upon  the  evidence 

§308.  of  the  parties  alone,  uncorroborated 

'White  v.  Benjamin.  150  N.  Y.  265,  by  other  proof ,  should  be  rejected  at 

44  N.  E.  Rep.  956  ;  Williams  v.  Har-  once,  unless  their  statements  are  so 

ris,  4  S.  Dak.  22.  54  N.  W.  Rep.  926  ;  full  and  convincing  as  to  make  the 

Town    of    Norwalk,    v.     Ireland,    68  fairness    and    justice    of    the    claim 

Conn.  14,  35  Atl.  Rep.  804.  manifest."     Diggs  v.   McCullough.  Hi) 

8  31  Wis.  86.    See  Fisher  v.  Shelver,  Md.  592,  16  Atl.  Rep.  45:!  :  Manning  v. 

53  Wis.  501,  10  N.  W.  Rep.  681.  Carruthers,  83  Md.  6,  34  Atl.  Rep.  254 

3Resse  v.  Shell,  95  Ga.  749.  22  S.  E.  Seitz  v  Mitchell,  94 U.  S.  583  ;  Town  of 

Rep.   580;    Lambrecht   v.   Patten,   15  Norwalk   v.   Ireland,   68  Conn.   11.  35 

Mont.  260,  38  Pac.  Rep.  1063.  Atl.    Rep.    804.       See    s.    v..    I v. 

4  Gable  v.  Columbus  Cigar  Co.,  140  Cole,  44  N.  J.  Eq.  338  \  con- 
Ind.  563,  38  N.  E.  Rep.  474  :  Knappv.  veyanee  by  a  husband  to  a  wife  may 
Day,  4  Col.  App.  23,  34  Pac.  Rep  be  treated  as  voluntary,  where  the 
1008.  alleged    debt    had    not    been    n 

5  In  Post  v.  Stiger,  29  N.  J.  Eq.  556,  nized  for  many  years,  and  no  account 
the  court  says  :  "  A  claim  by  a  wife  kept  or  interest  required.  Dillman  v. 
against  a  husband,  first  put  in  writ-  Nadelhoffer,  162  [11.625,45  N.  E.  Rep. 
ing  when  his  liabilities  begin  to  680;  Frank  v.  King,  121  III.  250,  12 
jeopardize  his  future,  should  always  N.   B.  Hep.  720. 


BUROICN    OF    PROOF 


§  301 


itor. '  When  a  creditor  challenges  such  a  contract  for 
fraud,  slight  evidence  will  change  the  onus  and  cast  on  the 
conjugal  pair  the  duty  of  manifesting  the  genuineness  and 
good  faith  of  the  transaction  by  such  evidence  as  will 
satisfy  or  ought  to  satisfy  an  honest  jury.2  "  Dealings 
between  husband  and  wife  which  result  in  the  appropria- 
tion of  the  husband's  property  for  the  payment  of  a  debt 
claimed  to  be  due  to  the  wife,  to  the  exclusion  of  other 
creditors,  it  must  be.  admitted,  furnish  uncommon  oppor- 
tunities for  the  perpetration  of  fraud,  and  should  be 
carefully  and  rigidly  scrutinized." 3  There  is,  however, 
no  absolute  legal  presumption  that  a  conveyance  of  land 
made  by  a  debtor  to  his  wife  is  fraudulent  as  against  a 
creditor  of  the  husband  whose  judgment  was  recovered 
after  the  conveyance.4  A  wife  may  be  held  as  trustee 
ex  maleficio  for  the  benefit  of  her  husband's  creditors.5 

§  301.  Burden  of  proof.  —  It  is  said  by  Mr.  Justice  Taylor, 
in  the  case  of  Horton  v.  Dewey, ^  that,  "  in  a  contest 
between  the  creditors  of  a  husband  and  the  wife,  if  the 
wife  claims  ownership  of  the  property  by  a  purchase,  the 
burden  of  proof  is  upon  her  to  prove,  by  clear  and  satis- 
factory   evidence,    such   purchase,  and  that  the   purchase 


Knapp    v.  Day.  4  Col.  App.  24,  34 
Pac.  Rep.  1008. 

h  has  been  said,  however,  that 
"such  dealings  (though  to  be  care- 
fully scrutinized  on  account  of  the 
temptation  i<>  give  an  unfair  advant- 
age to  the  wife  over  other  creditors) 
i ■  1  ■  ■ — t  be  tested  by  tin-  same  principles 
a-  a  conveyance  by  a  debtor  to  a 
stranger,  when  brought  into  question 
as  fraudulenl  againsi  creditors." 
Kaufman  v.  Whitney,  "i1*  Mis-,,  ins. 
Citing  Mangum  v.  Pinucane,  38  Miss. 
Vertner  v.  Humphreys,  22  Miss. 
130  ;  Roach  \  .  Bennett,  21  Miss.  98; 
Wilej  \  Gray,  36  Miss.  510  ;  Butter 
field    v.    Stanton,    M    Miss.    L5,     Tins 


does  not  seem  to  us  to  harmonize  with 
the  best  authority  relating  to  the 
subject. 

•  Manchester  v.  Tibbetts,  121  N.  V. 
222.  24  X.  E.  Rep.  :J04  :  Town  of  Nor- 
walk  v.  [reland,  68  Conn.  14. 

Hussey  v.  Castle.  41  Cal.  239; 
Grant  v.  Ward.  64  Mr.  239.  But  see 
$308. 

5 James  Goold  I  '<>.  v.  Maheady,  38 
I  inn     X.  Y  1  296. 

'  53  Wis.  413,  10  N.  W.  Rep.  599; 
Hoffman  \.  Nolte,  127  Mo.  120.  29 
S.  W.  Rep.  1006;  Peeler  v.  Peeler, 
109  N.  C.  681,  11  S.  E.  Rep.  59; 
Helms  v.  Green,  105  X.  1 '.  257,  11  S. 
1;    Rep.  170. 


*30i 


BURDEN    OF    PROOF. 


was  for  a  valuable  consideration,  paid  by  her  out  of  her 
separate  estate,  or  by  some  other  person  for  her."  And 
it  is  further  observed,  in  the  course  of  the  opinion,  that  : 
"  In  all  such  cases  the  burden  of  proof  showing  the  bona 
fides  of  the  purchase  is  upon  her,  and  she  must  show  by 
clear  and  satisfactory  evidence  that  the  purchase  was 
made  in  good  faith,  with  her  separate  estate,  or  for  a  con- 
sideration moving  from  some  person  other  than  her  hus- 
band. In  all  such  cases  the  presumptions  are  in  favor  of 
the  creditors,  and  not  in  favor  of  the  title  of  the  wife."8 
The  mere  recital  of  a  valuable  consideration  in  the  instru- 
ment or  bill  of  sale  has  been  considered  insufficient  to 
support  a  verdict  in  favor  of  the  wife.3  Such  a  recital  is 
regarded  as  evidence  only  between  the  parties  and  their 
privies.4 

It  must  be  remembered  that  the  presumption  of  posses- 
sion of  the  wife's  property  by  the  husband,  and  that  he 
is  therefore  prima  facie  the  owner,  has  been  impaired   by 


1  Citing  Stanton  v.  Kirsch,  6  Wis. 
338  ;  Horneffer  v.  Duress.  13  Wis.  603  ; 
Weymouth  v.  Chicago  &  N.  W.  Ry. 
Co.,  17  Wis.  550  ;  Duress  v  Horneffer, 
15  Wis.  195 ;  Beard  v.  Dedoph,  29 
Wis  136  :  Stimson  v.  White,  20  Wis. 
56:};  Elliott  v.  Bently.  17  Wis.  591  ; 
Putnam  v.  Bicknell,  18  Wis.  333; 
Hannan  v.  Oxley,  23  Wis.  519  ;  Fen- 
elon  v.  Hogoboom,  31  Wis.  172  ; 
Hoxie  v.  Price,  31  Wis.  82 ;  Car- 
penter v.  Tatro,  36  Wis.  297  ;  Gettel- 
mann  v.  Gitz,  78  Wis.  439,  47  N.  W. 
Rep.  660.  In  that  case  the  ruling  was 
put  on  the  ground  that  the  circum- 
stances raised  a  strong  presumption 
that  the  property  belonged  to  the 
husband ,  which  could  be  overcome 
only  by  clear  proof  on  the  wife's  part. 
See  also  Glass  v.  Zutavern,  43  Neb. 
334,  61  N.  W.  Rep.  579. 

s  See  Gable  v.  The  Columbus  Cigar 
Co.,  140  Ind.  563-569,   38  N.   E.    Rep. 

34 


474;  Stevens  v.  Carson,  30  Neb.  550, 
4<J  N.  W.  Rep.  655;  Thompson  v. 
Loenig,  13  Neb.  386,  11  N.  W  Rep 
168;  Seasongood  v.  Ware.  H>4  Ala. 
212,  16  So.  Rep.  51  :  Kelley  v.  Con- 
nell,  110  Ala.  543.  18So.  Rep.  9  ;  Glass 
v.  Zutavern.  43  Neb.  334.  61  N.  W. 
Rep.  579;  Hoffman  v.  Nolte,  1*37  Mo. 
120,  29  S.  W.  Rep.  1006  ;  Grant  v.  Sut- 
ton, 90  Va.  772,  19  S.  K  Rep  784  : 
Wood  v.  Harrison.  41  W.  V 
23  S.  E.  Rep.  560  ;  Clarliu  v  Ambrose, 
37  Fla.  78,'  19  So.  Rep  628;  Butch- 
inson  v.  Boltz,  35  \V.  Va.  754,  1  1  S  E. 
Rep.  267;  Peeler  v.  Peeler,  1"'.'  V  C. 
628,  14  s.  E.  Re] 

3  See  Sillyman  v.  King.  36  Iowa  207. 
But  compare,  contra,  stall  v.  Fulton, 
30  N.  J.  Law  430  ;  Horton  v.  Dewey, 
53 Wis.  410.  ION.  W.  Rep  599 
*  Sillyman  v.  King,  86  [ow 
Long  v.  Dollarhide  24  Cal.  218  ;  Kim- 
ball v.Fenner,  12N.H  248.  See§  220. 


530  FRAUDULENT    DESIGN.  §  302 

modern  innovations  in  the  law.  Since  under  the  present 
rule  the  wife  may  generally  take  by  gift  from  her  hus- 
band '  as  well  as  from  others,  and,  by  purchase,  from  any 
one,  her  separate  and  personal  possession  of  specific 
articles  must  draw  after  it  the  presumption  of  ownership, 
and  there  is  no  longer  any  controlling  reason  for  making 
her  case  exceptional,  or  excluding  her  from  the  operation 
of  the  general  rule.'-'  Of  course  the  wife  will  not  be  pro- 
tected when  she  co-operates  with  her  husband  in  any 
scheme  to  keep  his  creditors  at  bay.3 

£  302.  Mutuality  of  fraudulent  design  in  cases  of  ante-nup- 
tial settlements. —  To  render  an  ante-nuptial  settlement 
fraudulent  and  voidable  as  to  creditors,  it  is,  as  we  have 
seen,  necessary  that  both  parties  should  concur  in  or  have 
cognizance  of  the  intended  fraud.4  If  the  settler  alone 
intended  a  fraud,  and  the  prospective  wife  had  no  notice 
of  it,  she  cannot  be  affected  by  it.5  Marriage,  as  already 
shown,  is  a  consideration  of  the  highest  value,  which,  from 
motives  of  the  soundest  policy,  is  upheld  with  a  steady 
resolution.'' 

FYaud  may  be  imputed  to  the  parties  either  by  direct 
co-operation  in  the  original  design  at  the  time  of  its 
concoction,  or  by  constructive  co-operation  in  carrying 
the     design    into     execution     after    notice   of     it.'       The 


'  Armitage  v.   Mace.  96   N.  Y.  538.  Nat.  Bk.   v.    Hamilton.  59    N.   Y.  St. 

Whiton    v.   Snyder,  s*  N".  Y.  304  ;  Rep.  331,  27  X.  Y.  Supp.  1029. 

Gilben    v.  Glenny,  75    Iowa  513,   39  Prewil    v.   Wilson,   103  U.S.   22  ; 

N.  W.  Rep.  818;    Chadbourn   v.  Wil-  Berring  v.  Wickham,   29  Gratt.  (Va.) 

liams,  45  .Minn.  294,   47   X.   W.  Rep.  628.    Magniac    v.    Thompson,     T    Pet. 

812;  Ettlinger  v.   Eahn,  L34  Mo.   198,  392. 

\v    Rep.  37 ;  Coyne  v.  Sayre,  54  '  Prewil    v.   Wilson,    103  U.  S.  22; 

N  .1    Eq  702,  36  \tl.  Rep.  96  ;  Rhodes  See  Nance  v,  Nance,  84  Ala.  375,  4  So. 

v.  Wood.93Tenn.  702,288.  W.  Rep.  Rep.699;  ('ohm  v   Knox,  90  Cal.  266, 

294  27  Pac.    Rep.  215.      See  Chap.    XV. 

Sloan   v.  Huntington,  8  *.pp.  Div.  §§210,212. 

(X.  Y  |  98.  10  V  Y.  Supp.  393.  Magniac   \.  Thompson,  7  Pet.  398j 

•  See  Chap.  XIV,  .7  199,  200.     Firsl  per  Story,  J. 


§303  HUSRAND    As    \(.i:\i     FOR    WIFE.  5 3  1 

question  of  intent  must,  as  in  other  cases,  he  submitted 
to  the  jury  l 

§  303.  Husband  as  agent  for  wife.  --  It  is  settled  beyond 
controversy  that  a  husband  may  manage  the  separate 
property  of  his  wife  without  necessarily  subjecting  it,  or 
the  profits  arising  from  his  management,  to  the  claims  of 
his  creditors.2  The  wife  being  vested  with  the  right  to 
hold  and  acquire  property  free  from  the  control  of  her 
husband,  the  legitimate  inference  seems  to  result  that  she 
can  employ  whomsover  she  desires  as  an  agent  to  man- 
age it.3  To  deny  her  the  right  to  select  her  husband  for 
that  purpose  would  constitute  a  very  inequitable  limita- 
tion upon  her  right  of  ownership,  compelling  her  to  resort 
to  strangers  for  advice  and  assistance,  and  would  perhaps 
seriously  mar  the  harmony  of  the  marriage  relation.  In 
Tresch  v.  Wirtz,4  the  vice-chancellor  said  :  "  A  man's 
creditors  cannot  compel  him  to  work  for  them.  A  debtor 
is  not  the  slave  of  his  creditors.  The  marital  relation 
does  not  disqualify  a  husband  from  becoming  the  agent  of 
his  wife.  All  the  property  of  a  married  woman  is  now 
her  separate  estate  *  she  holds  it  as  a  feme  sole,  and  has  a 
right  to  embark  it  in  business.  She  may  lawfully  engage 
in  any  kind  of  trade  or  barter.  If  she  engages  in  busi- 
ness, and  actually  furnishes  the  capital,  so  that  the  busi- 
ness is  in  fact  and  truth   hers,  she  has  a  right   to  ask  the 


1  Monteith    v.    Bax,    4  Neb.     166;  Y.    568.    25  X.    E.    Rep.  986 ;  Ladd  v. 

Primrose  v.  Browning,  59  Ga.  70.    See  Newell.  34  Minn.    107,  24  N    M     Rep. 

tJ254.  366;  Osborne   v.    Wilkes,    108    X.    C. 

-  Voorhees   v.    Bonesteel.   16  Wall.  672,    13   S.    E.    Rep    285;   Eirklej    \ 

16;  Aldridge  v.  Muirhead.  101  U.  S.  Laeey,  7  Houst.(Del.)213,  30  Atl.  Rep. 

399,  per  Chief-Justice  Waite  ;  Tresch  994. 

v.  Wirtz,  34  N.  J.   Eq.  129  ;    Hyde  v.  s  Hyde    v.    Frey    28   Fed.    Re| 

Frey,  28  Fed.  Rep.  819  ;  Second   Nat  Woodworth   v.   Sweet,    51    X.     V     11; 

Bk.  v.  Merrill,  81    Wis.  151,  50  N.  W.  Garner  v.  Second  Nat.    Bk.,  151  I     8 

Rep.   505;    Garner     v.     Second     Nat.  420,  14  S.  C.  Rep.  390 

Bk..  151  U.  S.  420,  14  S.  C.  Rep.  390 ;  '34  N.  J.  Eq.  129  ;    A.bbej  v.  Deyo, 

Third   Nat.    Bk.  v.  Guenther,  123  N.  44N.  Y.  347.     Compare  j    .". 


532  wife's  separate  property.  ^304 

aid  of  her  husband,  and  he  may  give  her  his  labor  and 
skill  without  rendering  her  property  liable  to  seizure  for 
his  debts."  l  In  Merchant  v.  Bunnell,2  Davies,  Ch.  J., 
said  :  "  This  court  has  frequently  held  that  there  is  noth- 
ing in  the  marriage  relation  which  forbids  the  wife  to 
employ  her  husband  as  her  agent  in  the  management  of 
her  estate  and  property,  and  that  such  employment  does 
not  subject  her  property  or  the  profits  arising  from  such 
business,  to  the  claims  of  the  creditors  of  her  husband. "J 
But  a  husband  cannot  use  his  wife's  name  as  a  mere 
device  to  cover  up  and  keep  from  his  creditors  the  assets 
and  profits  of  a  business  which  is  in  fact  his  own.  It 
must  clearly  appear  that  his  wife  is  the  bona  fide  owner  of 
the  capital  invested,  and  that  the  accumulations  which 
result  from  the  conduct  of  the  business  are  the  legitimate 
outcome  of  the  investment  of  her  property.4  In  Boggess 
v.  Richards  Adm.,5  it  was  held  that  in  equity  the  wife's 
separate  estate  is  chargeable  with  the  debts  of  her  hus- 
band when  it  is  acquired  by  his  skill  and  experience,  even 
if  the  capital  is  furnished  by  her.  We  fail  to  perceive 
how  this  rule  can  be  supported,  for*  a  debtor  may  give 
away  his  services  if  he  desires.0 

^304.  Wife's  separate  property. — It  follows  from  the 
cases  cited  that  a  creditor  cannot  subject  to  the  payment 
of  his  claim  lands  belonging  to  the  debtor's  wife,  the  pur- 
chase-money of  which  constituted  a  part  of  her  separate 
estate  ; "   and  where  the   wife    was   the  owner    of  a   farm 


('itin_r    V -hees  v.  Bonesteel,    16  4  Lachman  v.   Martin,   139    111.450. 

Wall.  81.     See  28  N.  E.  Rep.  795. 

3  Keyes     N    Y.  1  539,  541.  539  W.  Va.  5G7.  20  S.  E.  Rep.  r>99- 

•CSting   Sherman    v.    Elder.    24  N.  Abbej    v.    Deyo,    44   N.    Y.   347: 

Y     381  :  Knapp   v.   Smith,  27  N.   Y.  Mayers  v.   Kaiser,  85  Wis.  382,55  N. 

Buckley  v  Wells,  33N.  Y.  518;  W.  Rep.  688.     See  §  50a  ;  Osborne  v. 

v.    Dauchy,  34  X.   Y.  293.     See  Wilkes,  108  X.  C.  054,  13  S.  E.  Rep. 

Milwaukee  Barvester  <'n.  v.  Culver,  285. 

89    Bun    (N.  Y  ,  601,  35  X   Y.  Sup,,.  'Davis  v.  Fredericks,  104  U.  S.  61$ 

289:  Abbey  v.  Deyo,  II  X.  Y.  345.  Compare  Rutherford   v.  Chapman,  59 

Ga.!177. 


§305  MINGLING    PROPERTY.  533 

upon  which  she  resided,  and  which  the  husband  carried 
on  in  her  name,  without  any  agreement  as  to  compensa- 
tion, it  was  held  that  neither  the  products  of  the  farm,  nor 
property  taken  in  exchange  therefor,  could  be  attached 
by  creditors  of  the  husband.1  A  husband  must  account 
to  his  wife  for  her  moneys  received  by  him.8  And  where 
a  debtor  conveyed  to  his  father-in-law,  in  consideration  of 
a  debt  due  the  latter,  and  the  father-in-law  conveyed  by 
way  of  gift  to  the  debtor's  wife,  the  conveyance  was  upheld 
as  against  creditors  of  the  debtor.3 

^  305.  Mingling  property  of  husband  and  wife — If  a  wife 
permits  her  husband  to  take  title  to  her  lands,  and  to  hold 
himself  out  to  the  world  as  the  owner  of  them,  and  to 
contract  debts  upon  the  credit  of  such  ownership,  she  can- 
not afterward,  by  taking  title  to  herself,  withdraw  them 
from  the  reach  of  his  creditors,  and  thus  defeat  their  claims.' 
At  least  the  courts  of  New  Jersey  so  hold.  And  where 
a  husband  and  wife  acquire  property  by  their  joint  indus- 
try and  management,  the  title  being  taken  and  held  in  the 
husband's  name,  a  conveyance  of  the  property  to  the  wife, 
without  consideration,  to  the  prejudice  of  existing  cred- 
itors of  the  husband,  will  not,  it  seems,  be  supported.6 


'Gage  v.   Dauchy,  34  N.    Y.    293.  of  the  law,  put  in  motion  by  his  cred- 

See  Buckley   v.    Wells,  33  N.  Y.  518;  itors,  the  very  property  Bhe  had  per- 

Garrifcy  v.  Haynes,  53  Barb.  (N.  Y.)  mitted    him,     year    after     year,     \>> 

599;  Bancroft  v.  Curtis,  108  Mass.  47.  represent  to  be  liis   and  the  apparent 

2  Pitkin  v.  Mott,  56  Mo.  App.  401.  ownership  <>f   which   had    given   him 

::  Smith  v.  Riggs,  56  Iowa  488,  8  N.  his   business   credit    and    standing." 

W.  Rep.  479,  9  Id.  385.  Besson  v.  Eveland.  26  X    -I.   Eq.   17! 

4  City  Nat.  Bank  v.    Hamilton,  34  See  Sexton  v.  Wheaton,  8  Wheat    829; 

N.  J.  Eq.  162.     "  Having  constantly  Riley  v.   Vaughan,  116  Mo.  169,  22  8 

consented  he  should  hold  himself  out  W.  Rep.  707  ;  Frederick  v.  Shorey,  4 

to  the  world  as   the   owner    of  this  Wash.  75,  29   Pac.    Rep.  766     Stuart 

property,  and  contract  debts  on  the  v.  McClelland.  31  Neb.  646 
credit  of  it,  up  to  the   very  hour  of         5  Langf ord    v.    Thurlby,    60    towa 

his  disaster,  it  would  be  against  the  107,   14   N.    W.    Rep.    185;    Riley    v. 

plainest    principles    of    justice,    and  Vaughan,  116  Mo.  169,  32  S.  W.  Rep 

utterly  subversive  of  everything  like  707  ;  Frederick  v  Shorey,  I  Wash.  75, 

fair  dealing,  to  permit  her  to  step  in  29  Pac.  Hep.  766. 
now  and  withdraw  from  the  process 


534  MINGLING    PROPERTY.  §305 

It  is  said  by  the  Supreme  Court  of  the  United  States  : 
"If  the  money  which  a  married  woman  might  have  had 
secured  to  her  own  use  is  allowed  to  go  into  the  business 
of  her  husband,  and  be  mixed  with  his  property,  and  is 
applied  to  the  purchase  of  real  estate  for  his  advantage, 
or  for  the  purpose  of  giving  him  credit  in  his  business, 
and  is  thus  used  for  a  series  of  years,  there  being  no  spe- 
cific agreement  when  the  same  is  purchased  that  such  real 
estate  shall  be  the  property  of  the  wife,  the  same  becomes 
the  property  of  the  husband  for  the  purpose  of  paying 
his  debts.  He  cannot  retain  it  until  bankruptcy  occurs 
and  then  convey  it  to  his  wife.  Such  conveyance  is  in 
fraud  of  the  just  claims  of  the  creditors  of  the  husband."1 
But  the  fact  that  the  title  was  so  placed  in  the  husband  for 
the  purpose  and  the  intent  on  the  part  of  the  wife  that  he 
should  thereby  acquire  a  fictitious  credit,  and  that  such 
credit  was  extended,  must  be  specially  alleged  and  proved.2 
If  the  creditor,  when  he  extended  the  credit,  had  knowl- 
edge or  notice  sufficient  to  put  a  prudent  man  upon  inquiry 
as  to  the  real  state  of  the  title,  the  wife  is  not  estopped  to 
claim  the  property  as  her  own.3  Humes  v.  Scruggs  is 
discussed  and  analyzed  by  Choate,  J.,  in  Van   Kleeck  v. 


Bumes   v.   Scruggs,   94  U.   S.   27.  468;  Moore  v.    Page,  111  U.  S.  119,4 

Citing   Fox   v.   Moyer,   44  N.  Y.   125,  S.  G.  Rep.  388 ;  Beecher  v.  Wilson,  84 

l:;i  :    Savage    v.    Murphy,    :J4    X.    Y.  Va.   813,  6  S.    E.   Rep.  209;  Diggs  v. 

508;    Babcock    v.    Eckler,    24    X.    V.  MeCullough,    69    Md.   592;  Porter   v. 

<;■.':;:  Robinson   v.   Stewart,    10  X.  V.  Goble,   88  Iowa  565,  55   N.  W.  Rep. 

L90;  Carpenter  v.  Roe,  10  X.  V.  227;  530;  Hopkins  v.  Joyce,   78  Wis.  443, 

Hinde'a     Lessee    v.    Longworth,     11  47  N.  W.  Rep.  722. 

Wheat.  199;  City  Nat.  Bk.  v.  Hamilton,  Brisco  v.  Harris,  112  N.  C.  671,  16 

34   N.J    Eq.  158;   Kennedy  v.  ] ,72  S.  E.  Rep.  850 ;  De  Votie  v.  McGerr,  15 

Ga      W;    Rilej    \.    7aughan,   116   Mo.  Col.    467.    24  Pac.   Rep.  923 ;   Hews  v. 

178,  22S.  W.  Rep.  707  ;  Flynn  v.  .lack-  Kenney.  4:5  Neb.  si:,,  <;j  x.  \y.  Rep. 

son,  93  Va.341,25S.  E.  Rep    1,  which  204;  Marston  v.  Dresen,  85  Wis.  530, 

do  ii"i   all   seem   to  be  entirelj  55  N.  W.  Rep.  896  :  Girault  v.  A.  P. 

in  point    lor  so   broad   a    proposition.  Iloialin^  Co.,  7  Wash.  90,  34  Pac.  Rep. 

See  Wake  v.  Griffin,  '.)  Neb.  47,  2  N.  171. 

W.    Rep.    461  .  <).|, 41  v.  Flood,  8  Ben.  Chadbourn  v.  Williams,  45  Minn. 

»n  v    Eveland,  26  X.  .1.  Eq.  294,  47  N.  W.  Rep.  812. 


§305 


MINGLING    PROPERTY 


535 


Miller,1  and  it  was  very  properly  considered  that  the  lan- 
guage was  not  to  be  deemed  as  asserting  the  doctrine 
that  the  wife,  whose  moneys  were  so  received  by  the  hus- 
band, ceased  to  be  his  creditor  for  the  money  so  retained, 
or  forfeited  by  the  use  which  she  had  allowed  the  hus- 
band to  make  of  the  money  any  of  her  rights  as  creditor 
in  case  of  bankruptcy."  If  the  money  is  received  by  the 
husband  as  his  wife's,  and  to  be  accounted  for  or  secured 
by  him  to  her,  he  waiving  his  marital  rights  thereto,  she 
has  an  equitable  right  to  the  fund  sufficient  to  sustain  a 
mortgage  subsequently  given  to  secure   it,  and   the  mere 


•19  N.  B.  R.  496  ;  Garner  v.  Second 
Nat.  Bk.  151  U.  S.  420 ,  14  S.  C.  Rep. 
390.  This  language  is  employed  by 
Hopkins,  J.,  In  re  Jones,  6  Biss.  68, 
73,  in  deciding  a  motion  to  expunge  a 
proof  of  debt  in  bankruptcy  filed  by 
a  wife  against  a  husband:  "She al- 
lowed him  [the  husband]  to  collect, 
deposit  and  use  the  money  when  col- 
lected as  his  own,  and  to  enjoy  the 
credit  and  reputation  that  the  recep- 
tion and  use  of  the  money  necessarily 
gave  him  ;  and  after  parties  have 
dealt  with  him,  supposing  and  be- 
lieving he  was  the  owner  of  such 
money,  she  cannot  be  heard  to  assert 
her  right  to  it,  and  thus  defraud  honest 
creditors  who  have  trusted  him,  rely- 
ing upon  the  truth  of  appearances  of 
ownership  which  she  permitted  him 
to  present."  See  Briggs  v.  Mitchell, 
60  Barb.  (N.  Y.)  317,  where  Potter, 
P.  J.,  said:  "  A  quiet  acquiescence  that 
her  husband  should  use  her  estate  as 
his  own,  mingling  it  indiscriminately 
with  his  own,  in  business,  for  a  period 
of  from  twelve  to  nineteen  years, 
without  the  recognition  of  its  sepa- 
rate existence  by  even  a  written  re- 
ceipt, memorandum,  or  separate 
investment,  and  without  ever  having 
during  that  period  accounted  for  in- 


terestor    principal    or    even    having 

talked  about  it  until  the  bona 
fide  creditors  were  aboul  to  call 
for  it,  is  a  kind  of  trust  or  settle- 
ment that  cannot  be  recognized  by 
any  rule  of  law  or  equity  to  stand 
against  the  rights  of  antecedent  cred- 
itors." The  arguments  advanced  in 
the  cases  last  quoted  tend  strongly 
toward  the  repression  of  fraudulent 
transfers  of  assets  by  husband  to  wife 
Since  the  emancipation  of  married 
women  from  the  bondage  of  the  com- 
mon law  as  regards  their  right  to  hold 
property,  they  have  become  tbe  con 
venient  alienees  of  dishonest  hus- 
bands who  are  seeking  to  elude  the 
just  claims  of  creditors.  Nothing  is 
more  natural  than  that  courts  should 
rigidly  examine,  and,  in  proper  ca8es, 
overt  urn  transfers   of   this   character. 

The  chief  ground   usually   assigned, 
that  the  husband  gains  a  false  credit 

bythe  apparent  ownership  and  use  of 
the  wife's  money  and  property,  might, 
it  seems  t"  us,  be  urged  against  any 
creditor  who  sold  personal  property 
to  the  debtor  upon  credit,  reserving 
title,  or  any  bailor  who  had  entrusted 
the  debtor  with  the  temporary  cua 
tody  of  chattels. 
2  See  Grabill  v.  Mover,  05  Pa.  St. 580, 


3  0 


6  BOOK    ENTRIES.  §§  305a,   306 


lapse  of  time  would  not  invalidate  the  security.1  "  When- 
ever a  husband  acquires  possession  of  the  separate  prop- 
erty of  his  wife,  whether  with  or  without  her  consent,  he 
must  be  deemed  to  hold  it  in  trust  for  her  benefit,  in  the 
absence  of  any  direct  evidence  that  she  intended  to  make 
a  gift  of  it  to  him."2  Some  of  the  cases,  however,  dis- 
tinguish between  principal  and  income,  and  incline  to 
regard  the  use  of  the  latter  by  the  husband  as  implying  a 
gift  of  it  from  her.3  Where  husband  and  wife  both  own 
a  lot  which  they  convey  away  for  another  which  is  con- 
veyed directly  to  the  wife,  the  creditors  of  the  husband 
can  sell  the  land  to  satisfy  their  claims,  but  the  wife  is 
entitled  to  the  return  of  the  amount  which  she  con- 
tributed toward  the  purchase.4 

I  305a.  Book  entries  of  transactions.  — Where  a  husband 
acts  as  the  wife's  agent  his  entries  in  his  books  of  account 
may  be  given  in  evidence  against  her.5 

£  306.  Marriage  settlements  —  Amount  of  settlement.  — 
Marriage  settlements  are  always  watched  with  consider- 
able jealousy  owing  to  the  relations  of  the  parties  and  the 
chances  of  fraud  on  creditors.6  If  the  amount  of  prop- 
erty settled  is  extravagant,  or  grossly  out  of  proportion  to 
the  station  and  circumstances  of  the  husband,  this  has 
been  regarded  as  of  itself  sufficient  notice  of  fraud.7  In 
an  able  opinion,  in  the  case  of  Davison  v.  Graves,8  Jus- 
tice Nott  says  :  "  There  is  no  case  that  I  have  seen  where 


1  Syracuse    Chilled    Plow     Co.    v.  «  Burton  v.  Gibson,  32  W.  Va.  406, 

Wing,  85  N.  Y.  426;  Woodworth  v.  9  S.  E.  Rep.  255. 

Sweet,   51   N.   Y.  9.     See  Reel  v.  Eiv-  B  White    v.    Benjamin,   150    N.   Y. 

ingston,  34  Fla.  377,  16  80.  Rep.  284.  264,  44  N.  E.  Rep.  956. 

'lamer    v.   Second    Nat.    Bk.,    151  «  Benne    v.  Schnecko,    100  Mo.  250, 

U.  S.  433,  14  S.  C.  Rep.  390  ;  Stickney  13  S.  W.  Rep.  82. 

v.  Stickney,  131  U.  S.  227,  9  S.  C.  Rep.  1  Ex  parte  McBurnie,  1  De  G.,  M. 

677.  &  G.  441  ;  Croft  v.  Arthur,  3  Dessaus. 

Bauer's   Estate,    140  Pa.   St.   420,  (S.  C.)  223. 

21  A 1 1     Rep.  445;    McGlinsey's  App.,  *  Riley's  Eq.  (S.  C.)  236  ;  Colombine 

!  1  s.  &.    B    (Pa  I  64  ;   In   r<    Flamank  v.   Penhall,  1  Sm.  &  G.  228  ;    Bulmer 

I,    R.,  40  ( !b.  Div.  461.  v.  Hunter,  L.  R.  8  Eq.  Cas.  46. 


§  306  MARRIAGE    SETTLEMEN1 

a  man  has  been  permitted  to  make  an  intended  wife  a 
mere  stock  to  graft  his  property  upon,  in  order  to  place 
it  above  the  reach  of  his  creditors.  A  marriage  settle- 
ment must  be  construed  like  every  other  instrument. 
The  question  may  always  be  raised,  whether  it  was  made 
with  good  faith,  or  intended  as  an  instrument  of  fraud."  ' 
The  usual  test  is  that  the  settlement  must  be  reasonable 
considering  the  grantor's  circumstances.2  If  it  complies 
with  this  requirement  it  will  be  upheld.  When  a  person 
possesses  a  large  estate,  and,  owing  debts  inconsiderable 
in  amount,  makes  a  voluntary  settlement  of  a  part  of 
his  property  upon  a  wife  and  child,  retaining  enough  of  his 
property  himself  to  pay  his  existing  debts  many  times 
over,  it  would  not  be  a  fair  or  reasonable  inference  that 
such  a  transaction  was  intended  to  hinder  or  defraud  per- 
sons to  whom  he  happened  to  owe  trifling  debts.5  A 
settlement  upon  a  wife  of  all  a  man's  property  exempt 
from  execution,  cannot,  of  course,  be  upheld,  unless  the 
marriage  was  not  only  the  sole  consideration  for  it.  but 
the  agreement  was  entered  into  by  the  wife  in  ignorance 
of  her  husband's  indebtedness,  and  without  knowledge  of 
circumstances  sufficient  to  put  her  upon  inquiry.4  In 
Colombine  v.  Penhall,5  a  celebrated  English  case,  the 
court  said  :  "  Where  there  is  evidence  of  an  intent  to 
defeat  and  delay  creditors,  and  to  make  the  celebration  of 
a  marriage  a  part  of  a  scheme  to  protect  property  against 
the  rights  of  creditors,  the  consideration  of  marriage  can- 
not support  such  a  settlement."  6 


See  Phipps  v.  Sedgwick.  95  D    -  -   hnider, 

Sommermeyer     v.     Schwartz.    ^      Y.  637 
Wis.  71,  61  N.  W.   Rep.  311 ;  Bohn  v.  rdon     v.    Worthier,     48    Iowa 

Weeks,  50  111.  App.  236.  -i:J.l 

rawford    v.  Logan.    97  II!.  Bfl  '  1  Sin.  &  <  •■  - 

DeFargesv  Ryland.  87  Va.  405,  12  S.  3        Bulmer    v.    Bunter,   1.    R,  - 

E.  Rep.  805  :    Nichols  v.  Wallace,  41      Eq.  Cas.  46. 

111.  App.  627. 


538  POST-NUPTIAL   SETTLEMENTS.  §§  307,  308 

§  307.  Post-nuptial  settlements. —  The  court  decided,  in 
French  v.  Holmes,1  that  a  voluntary  gift  by  a  husband  to 
his  wife,  if  he  was  indebted  at  the  time,  was  prima  facie 
fraudulent  as  to  creditors2  Davis,  J.,  states  the  rule  to 
be  that  a  voluntary  post-nuptial  settlement  will  be  upheld 
"  if  it  be  reasonable,  not  disproportionate  to  the  hus- 
band's means,  taking  into  view  his  debts  and  situation, 
and  clear  of  any  intent,  actual  or  constructive,  to  defraud 
creditors."3  Mr.  Justice  Field  observes:  "A  husband 
may  settle  a  portion  of  his  property  upon  his  wife,  if  he 
does  not  thereby  impair  the  claims  of  existing  creditors, 
and  the  settlement  is  not  intended  as  a  cover  to  future 
schemes  for  fraud."  *  Post-nuptial  settlements  are  pre- 
sumed to  be  voluntary.5  A  settlement  consummated 
after  marriage,  in  pursuance  of  an  agreement  entered 
into  before  marriage,  will  be  upheld  against  creditors,6 
and  a  voluntary  conveyance  for  the  benefit  of  a  wife  and 
children  will  not  be  overturned  at  the  suit  of  a  mortgage 
creditor  who,  by  reason  of  his  own  laches,  has  lost  ample 
security.7  An  agreement  by  a  wife  to  remove  to  and  reside 
in  a  particular  county  does  not  as  against  creditors  con- 
stitute a  valuable  consideration  for  a  transfer  to  her,  by  the 
husband. s 

§  308.  Purchase  after  marriage.  -  Purchases  of  either 
real  or  personal  property  made  by  the  wife  of  an  insolvent 
debtor    during    coverture   are    justly    regarded  with   sus- 

67   Me.    L89.     See    De    Farges    v.  '  Mo  ore    v.   Page,  ill  U.  S.  118,4 

Ryland,  *7  Va.  404,  12  S   E.  Rep.  805.  S.  C.  Rep.  388.     See  Jones  v.  Clifton, 

Otis  v.  Spencer,  L02I11.  622;  Man-  101  U.  S.  225. 

ning  v.  Riley,  52  N.  J.  Eq.  39,  27  Ail.  r>  Robbins  v.  Armstrong,  84  Va.  810, 

Rep.  810;  Massey  v.   fancey,  90  Va.  6  S.  E.  Rep,  130. 

L9    3     E.    Rep     L84;    Adams  v.  » Kinnard    v.    Daniel,    13   B.    Mon. 

rton,  18  Ark   U9,3S  W.  Rep. 628.  I  Ky.)499. 

Kehr  v.  Smith,  20  Wall.  85 ;  Cook  'Stephenson   v.  Donahue,  40  Ohio 

■.    Holbrook,  1 16   Mass.   66,    M  X.    E.  St.  184. 

Rep  948      See  Wi-u.n   v.  Jarvis,  9  B  Radley   v.  Riker,  80  Hun  (N.  V.) 

I  ed.  Rep.  ^7  i  Bonn  v.  Weeks,  50  111.  354,  30  N.  Y.  Supp.  130. 

A|'|> 


§  3o8 


PURCHASE     VFTER    MAKHI  M.l  . 


picion,  unless  it  clearly  appears  that  the  consideration 
was  paid  out  of  her  separate  estate.1  The  community  of 
interest  between  husband  and  wife  requires  that  purchases 
of  this  character  which  are  so  often  made  a  cover  for  a 
debtor's  assets,  and  so  frequently  resorted  to  for  the  pur- 
pose of  withdrawing  his  property  from  the  reach  of  his 
creditors  and  preserving  it  for  his  own  use,  should  be 
closely  scrutinized,  and  in  a  contest  between  the  creditors 
of  the  husband  and  those  of  the  wife,  there  is,  and  should 
be,  a  presumption  against  her  which  she  must  overcome 
by  affirmative  proof.  This  was  the  rule  of  the  common 
law,  and  it  continues,  though  statutes  have  modified  the 
doctrine  which  gave  the  husband  title  to  the  wife's 
personalty.3 


1  Seitz  v.  Mitchell,  94  U.  S.  582  ; 
Hinkle  v.  Wilson,  53  Md.  287  ;  Simms 
v.  Morse,  4  Hughes  579  ;  Knowlton  v. 
Mish,  8  Sawyer  627  ;  Garrett  v.  Wag- 
ner, 125  Mo.  461,  28  S.  W.  Re}..  762. 
In  Hoey  v.  Pierron,  67  Wis.  262,  269, 
30  N.  W.  Rep.  692,  the  court  said  : 
"  As  to  whether  the  debtor  made  and 
executed  that  mortgage  to  his  wife 
with  the  intent  to  hinder,  delay,  or 
defraud  his  creditors,  the  court 
charged  the  jury  that  the  burden  of 
proof  was  upon  the  defendant  to  show 
by  clear  and  satisfactory  evidence 
that  it  was  made  by  him  with  such 
intent.  This  is  assigned  as  error. 
Undoubtedly  the  burden  of  proving 
that  the  mortgage  to  the  wife  was 
given  to  secure  an  actual  indebted- 
ness to  her  from  her  husband  for 
moneys  or  property  advanced  by  her 
from  her  separate  estate,  or  by  some 
other  person  for  her  use,  was  upon 
the  wife  ;  but  when  that  was  proved 
and,  in  effect,  admitted,  it  shifted 
such  burden  to  the  defendant.  Sem- 
mens  v.  Walters,  55  Wis.  683,  684,  13 
N.  W.  Rep.  889 ;  Evans  v.  Rugee,  57 
Wis.  624,  16  N.  W.  Rep.  49.     Assum- 


ing that  the  defendant  mad'-  a  case 
within  the  provisions  of  i  2319,  R  S., 
which,  in  such  case,  declares  that 
'  the  burden  shall  be  upon  the  plain- 
tiff to  show  that  such  mortgage  was 
given  in  good  faith,  and  to  secure  an 
actual  indebtedness  and  the  amounl 
thereof,'  yel  it  has  often  been  held,  in 
effect,  by  this  court  that  the  estab- 
lishment of  such  'actual  indebtedness 
and  the  amount  thereof,"  satisfies  the 
requirements  of  the  section  and  shifts 
the  burden  of  proof  to  such  defend- 
ant."    See   §  300. 

-'  Seitz    v.   Mitchell,    94    0.    - 
583;  Gamber  v.  Gamber   18    P 
366;  Keenev  v.  Good,  21    Pa   si  349; 
Walker  v.  Reamy,  36  Pa.  St.  410  ;  Par- 
vin  v.Capewell,  45  Pa   Si    89  ;  Robin 
son   v.    Wallace,  39   Pa,  St     129  ;    \u 
,-and    v.    Schaffer,    43    Pa     St     363; 
Bradford's  Appeal,    29    Pa.    St.    518  . 
(Mann  v.  Younglove,  27  Barb.  I  N.  Y 
isii;  Edwards  v.  Entwisle,  2  Mackej 
,1).  C.)  43  ;  Ryder  v.   Bulse,  24  N    J 
372  ;   Duncan  v.  Roselle,  15   lov 
Cramer  v.  Reford,  17   N    J     Eq    36*3  ; 
Elliott   v.    Bently,  n  Wis.    591.    See 
Edson  v.  Harden.  ^>  Wis. 


540  VALID   GIFTS  —  ARTICLES   OF   SEPARATION.       §§309,  310 

§  309.  Valid  gifts.  — Subsequent  insolvency.  —  It  is  said  in 
a  recent  case  in  Texas,  that  a  gift  from  the  husband  to 
the  wife  is  not  necessarily  fraudulent  and  void  as  to  exist- 
ing creditors.  It  might  be  a  badge  of  fraud,  a  circum- 
stance to  be  considered  in  determining  whether  the  intent 
was  fraudulent,  if  it  were  shown  that  he  was  then  heavily 
in  debt.  But  it  does  not  follow  that,  because  a  man  may 
be  indebted  to  an  inconsiderable  or  even  a  considerable 
amount  at  the  time,  he  cannot  settle  a  part  of  his  prop- 
erty upon  his  wife  or  children,  provided,  as  we  have  seen, 
he  retains  an  ample  amount  of  property  to  liquidate  his 
just  debts.1  Nor  will  the  settlement  be  affected  because 
it  may  turn  out  afterward,  from  accident  or  ill-fortune, 
that  his  property  has  perished  or  been  swept  away.8  The 
general  rule  then  is  that  a  conveyance  by  a  husband, 
solvent  at  the  time,  to  his  wife  and  children  will  be 
supported,3  if  he  retains  ample  means  to  pay  his  debts,4 
and  the  gift  or  conveyance  is  a  reasonable  one.5  If,  on 
the  other  hand,  the  conveyance  is  made  with  the  actual 
intent  of  defrauding  persons  who  may  subsequently 
become  creditors,  it  is  void  as  to  them.6 

§310.  Articles  of  separation.  —  Where  a  husband  and 
wife  executed  articles  of  separation  by  which  the  husband 
bound  himself  to  pay,  in  trust  for  his  wife,  a  certain 
amount  of  capital,  and  interest  on  it  till  paid,  it  becomes 
a  voluntary  settlement  if  the  parties  become  reconciled 


1  Van    Bibber    v.    Matins,    52  Tex.  5  When  a  partner  uses  firm  funds 

407 ;  Morrison  v.  Clark,  55  Tex.  444.  to  purchase  property  to  settle  upon 

See   Emerson    v.    Bemis,  69   111.  537;  his  wife,  creditors  of  the  copartner- 

Eindee's    Lessee    v.    Longworth,    11  ship    may    pursue    the    property    in 

Wheat.  199.  equity.     Edwards     v.      Entwisle,     2 

'Ibid.;  Cooper,  Chancellor,  in  Per-  Mackey    (D.     C.)    43;     Emerson     v. 

kins  v.  Perkins,  1  Trim    Ch.  543.  Bemis,  69  111.  537  ;  Mattingly  v.  Nye, 

Brown  v.  Spivey,  53  Ga.  155.  8  Wall.   370;  Kesner  v.   Trigg,  98  U. 

1  <  lhambers  v.  Sallie,  29  Ark.  407  ;  S.  54. 

Kenl     v.    Riley,    L.    R.   14    Eq.    Cas.  6  Wynne  v.  Mason,  72  Miss.  424,  18 

190.  S<>.  Rep.  422.     See  §§  93.  242. 


§§3IT«312  STATUTE  01    FRAUDS.  -|i 

and  again  cohabit,  even  though  there  be  an  agreement 
that  the  settlement  shall  stand.1  A  settlement  has  been 
avoided  upon  this  theory,  where  it  appeared  that  the 
amount  of  the  husband's  estate  was  $16,132,  while  the 
settlement  was  $7,000,  leaving  $9,132  to  meet  the  debts 
confessedly  due,  amounting  to  $9,306. 

§311.  Statute  of  frauds. —  In  New  York  every  agreement 
or  undertaking  made  upon  consideration  of  marriage, 
unless  reduced  to  writing,  and  subscribed  by  the  parties, 
is  void,2  and  a  settlement  made  subsequently,  in  pur- 
suance of  such  void  agreement,  is  to  be  considered  as 
voluntary  as  against  creditors.3 

I  312.  Insurance  policies.— As  we  have  shown  in  New 
York,  policies  of  life  insurance  may  be  placed  upon  a  hus- 
band's life  for  the  benefit  of  his  wife,  free  from  the  claims 
of  creditors,4  the  annual  premiums  being  limited.  But 
where  assignments  of  policies,  taken  out  by  a  debtor  who 
was  insolvent,  are  made  in  trust  for  the  benefit  of  his 
wife,  such  transfers  may  be  annulled  in  favor  of  cred- 
itors.5 The  court,  however,  says  in  the  case  last  cited  that 
they  "  do  not  mean  to  extend  it  to  policies  effected  with- 
out fraud  directly  and  on  their  face  for  the  benefit  of  the 
wife,  and  payable  to  her;  such  policies  are  not  fraudulent 
as   to    creditors."6     In   cases  where  a  debtor  at  his  own 


1  Kehr  v.  Smith.  20  Wall.  31.  Co.,  24  Fed.   Rep.  770  ;  Charter  <  >ali 

3  Dygert    v.  Remerschnider,  32  N.  Life  Ins.  Co.  v.  Brant,  47  Mo.  419.     In 

Y.  629.  Michigan  it  was  held  that  a   policy 

3  Reade  v.  Livingston,  3  Johns.  Ch.  originally  taken  out  to  the  insured's 
(N.  Y.)  481  ;  Borst  v.  Corey,  16  Barb,  executors  or  administrators,  and  Bub- 
(N.  Y.)  136,  and  cases  cited.  The  sequently  assigned  t<.  the  vrife,  «> 
same  rule  exists  in  Massachusetts,  not  protected  by  the  statute.  Ionia 
Deshon  v.  Wood,  148  Mass.  132.  19  County  Saw  Bank  v.  McLean,  84 
N.  E.  Rep.  1.  Mich.  625,  48  N.  W.  Rep.   L59 

4  See  §  23.     Stokes   v.    Amerman,  5  Appeal  of  Elliott's  Exrs.,  50   Pa 
121    N.    Y.    337,    24   N.  E.  Rep.  819  ;  St.  75. 

Central  Bank  of  Washington  v.  Hume,  6  See  Thompson  v.  Cundiflf,  I  I  Bush 

128  U.  S.  195,  9  S.  C.  Rep.  41  ;  JEtna  (Ky.)567.     Compare  Nippes'  Appeal, 

Nat.  Bank  v.  United  States  Life  Ins.  75  Pa.  St.  478;  Gould  v.  Emerson,  99 


542  COMPETENCY    OF   WIFE   AS   WITNESS.       §,§313,  3 14 

expense  effects  insurance  on  his  life  as  security  to  a  cred- 
itor, the  representative  of  the  debtor  gets  title  to  the  sur- 
plus after  the  debt  is  paid.  And  if  the  debtor  in  his  life- 
time pays  the  debt,  he  is  entitled  to  have  the  policy 
delivered  up  to  him.1  As  already  shown,  a  man  may 
devote  a  portion  of  his  earnings  to  insurance  for  the  ben- 
efit of  his  family.2 

>?  313.  Competency  of  wife  as  witness.  —  On  a  creditor's 
bill  to  set  aside  a  conveyance  of  land  by  a  husband  to  his 
wife,  she  is  regarded  in  Illinois  as  a  competent  witness  to 
prove  the  consideration  of  the  conveyance  and  its  good 
faith.3  It  seems,  however,  to  be  doubted  whether  a  wife 
can  be  compelled  to  testify  against  her  husband  when  he 
is  a  co-defendant  with  her,  if  the  husband  objects  to  her 
examination.4  While  the  act  of  Congress5  cut  up  by  the 
roots  all  objections  in  Federal  courts  to  the  competency 
of  a  witness  on  account  of  interest,  it  is  considered  that 
the  statute  has  no  application  to  a  wife,  as  her  testimony 
is  excluded  solely  upon  considerations  of  public  policy 
and  not  of  interest.15 

>  314.  Fraudulent  conveyances  in  contemplation  of  mar- 
riage.— Alienations  of  real  property  by  a  man  about  to  be 
married,   made    without  the  knowledge  of    his   intended 


Muss.  154  ;  Durian  v.  Central  Verein,  3  Payne  v.  Miller,  103  111.  443.     The 

7  Daly  (N.  Y.)  171  ;  Leonard  v.  Clin-  testimony  of  a  husband  in  favor  of  his 

ton,  26    Bun   <N.  V.)  290;  Estate  of  wife,  on  a  bill  to  subject  land  in  her 

Henry  Trough,  8  Phila.  (Pa.)  214.  name  to  the   payment  of   his    debts, 

1  Re  Newland,  T  N.  B.  R.  ITT.  Sre  when  not  impeached,  must  be  re- 
Lea  '■  llmtoii.  5  De  G.,  M.  &  <;.  823;  garded  the  same  as  thai  of  any  other 
Drysdale  v.  Piggott,  22  Beav.  238;  witness  having  a  personal  interest  or 
Courtenay  v.  Wright,  2  ('•\t\.  337;  feeling  as  to  the  matters  about  which 
Morland  v.  Isaac,  20  Beav.  389.  A.s  to  he  testifies.  Eads  v.  Thompson,  109 
who  should  sin-  to  reach  the  proceeds  111.  87 

'.f  a  policy  where  the  debtor  has  ma  <  It  •  '  <  'lark  v.  Krause,  2  Mackey  (D.  C.) 

a  genera]  as  ignment,  see  Lowery  v.  572. 

Clinton,  32  Hun  (N.  Y.)  207.  'U.S.  Rev.  St.  §  858. 

'Central  Bank  of  Washington  v.  "  See  Lucas  v.  Brooks,  is  Wall.  453. 
Hum.'.  128  U.  s.  195,  9  s.  ( !.  Rep.  li. 


§314  CONTEMPLATION    O*    MARRIAGE.  543 

bride,  and  with  the  intent  and  object  of  depriving  her  of 
the  rights  which  she  would  otherwise  acquire  in  his  prop 
erty  by  the  marriage,  may,  as  we  have  already  seen,1  be 
avoided  by  the  wife  as  fraudulent.2  In  Smith  v.  Smith,3 
the  chancellor  said:  "I  am  of  opinion  that  a  voluntary 
conveyance  by  a  man,  on  the  eve  of  marriage,  unknown 
to  the  intended  wife,  and  made  for  the  purpose  of  defeat- 
ing the  interest  which  she  would  acquire  in  his  estate  by 
the  marriage,  is  fraudulent  as  against  her."  The  doctrine 
is  not  limited  to  covinous  conveyances  of  realty,  but 
where  personal  property  is  disposed  of  by  a  colorable 
transfer,  the  husband  retaining  a  secret  interest,  and  the 
ultimate  object  being  to  deprive  the  wife  of  her  share  of 
it,  the  conveyance  may  be  avoided.'  The  rule  is  also 
applied  and  enforced  where  the  conveyance  is  made  by 
the  husband  during  coverture  with  a  like  intent  and  pur- 
pose.5 Thus  in  Gilson  v.  Hutchinson6  it  appeared  that 
a  mortgagor  procured  a  sale  of  the  mortgaged  estate 
under  a  power  contained  in  the  mortgage,  with  a  view  to 
evade  liabilities  to  his  wife,  from  whom  he  had  been  sep- 
arated, and  to  deprive  her  of  her  right  of  dower.  The 
court  held  that  she  could  maintain  a  bill  in  equity  for  the 


1  See  §  70.  3  6  N.  J.  Eq.  522. 

2  DeArrnond  v.  DeArrnond,  10  Ind.  4  See  Littleton  v.  Littleton,  1  Dev.  & 
191;  Pomeroy  v.  Pomeroy,  54  How.  B.  (N.  C.)  Law  327  ;  Davis  \.  Davis,  •"> 
Pr.  (N.  Y.)  228;  Swaine  v.  Perine,  5  Mo.  183:  Stone  v.  Stone,  L8  Mo.  389  ; 
Johns.  Ch.  (N.  Y.)  482  ;  Youngs  v.  Tucker  v.  Tucker,  29  Mo.  359  ;  U  • 
Carter.  1  Abb.  N.  C.  (N.  Y.)  136,  n.,  v.  MeGee,  Ired.  Law  (N.  C.)  L05 ; 
affi'd  10  Hun  (N.  Y.)  194;  Smith  v.  Smith  v.  Smith,  22  Col.  180,  16  Pac. 
Smith  6N.  J.  Eq.  515  ;  Simar  v.  Cana-  Rep.  128  :  Stewart  v.  Stewarl  5  I  lonu. 
day,  53  N.  Y.  298  ;  Petty  v.  Petty,  4  B.  316. 

Mon.  (Ivy.)  215;  Thayer  v.  Thayer.  14  See    Walker  v   Walker,  66    N.   B. 

Vt.,107  ;  Brown  v.  Bronson,  35 Mich.  390.  31  Atl.  Rep.  14. 

415;  Smith    v.    Smith,    12   Cal.  217 ;  6  120    -Mass.    27.     See    Killinger    v. 

Kelly  v.  McGrath,  70  Ala.  7."")  :  Man-  Reidenhauer,   6  S.    &    R.   I  Pa      531  ; 

ikee  v.  Beard,  85  Ky.  20,  2S.  W.  Rep.  Brewer  v.  Connell,  11   Humph.  (Tenn.) 

545  ;  Smith  v.  Smith,  22  Col.  480,  46  500  ;  Jennj     v.    Jenny,    24     VI     324; 

Pac.  Rep.  128.     See  b-  70.  Jiggitts  v.  Jiggitts,  40  Miss 


544 


CONTEMPLATION    OF    MARRIAGE. 


§  3H 


recovery  of  the  property,  both  as  administratrix  and  in 
her  own  right.1  The  rule  has  been  said  to  embrace  con- 
veyances made  by  the  intended  wife  as  well  as  by  the 
husband.2  Brickell,  C.  J.,  said:  "  We  confess  an  inability 
to  distinguish  the  ante-nuptial  frauds  of  the  husband  from 
the  ante-nuptial  frauds  of  the  wife,  or  to  perceive  any 
sound  reason  for  repudiating  and  avoiding  the  one,  while 
permitting  the  other  to  work  out  its  injustice  and 
injury."3  But  making  a  settlement  of  a  moderate 
amount  on  children  of  a  former  marriage  does  not  con- 
stitute  fraud  as  to  the  wife.4  Whether  a  conveyance 
constitutes  a  fraud  on  the  wife  must  depend  on  all  the 
circumstances  of  the  case5  The  weight  of  opinion  is  that 
mere  non-communication  to  the  wife  is  not  in  itself  conclu- 
sive evidence  of  fraud.6  In  any  case  such  conveyance 
can  only  be  set  aside  by  her  to  the  extent  of  her  dower 
right.7 


1  In  Littleton  v.  Littleton,  1  Dev.  & 
B.  Law(N.  C.)331.  Chief  -  Justice  Ruf- 
fin  observed:  "But  bona  fide  con- 
veyances, that  is  to  say,  such  as  are 
not  intended  to  defeat  the  wife, 
do  not  seem  to  be  more  than 
within  the  words  of  the  act. 
Such  are  sales,  to  make  which  an 
unfettered  power  is  allowed  the 
husband.  Such,  too,  appear  to  be 
bona  fide  gifts,  whereby  the  husband 
actually  and  openly  divests  himself  of 
the  property  and  enjoyment  in  his 
lifetime,  in  favor  of  children  or  oth- 
ers, thereby  making,  according  to  his 
circumstances  and  the  situation  of  his 
family,  a  just  and  reasonable  present 
provision  for  persons  having  meri- 
torious claims  on  him,  and  with  that 
view,  and  not  with  the  view  to  defeat 
nor  for  the  sake  of  diminishing  the 
wife's  dower."  Compare  Mcintosh  v. 
l/idd.  1  Humph.  (Tenn.)  4.19;  Miller 
v.    Wilson,    1.1    Ohio  108  ;    Stewart    v. 


Stewart,    5  Conn.   317  ;  Kelly  v.  Mc- 
Grath,  70  Ala.  75. 
3  Kelly  v.  McGrath,  70  Ala.  75. 

3  See  Butler  v.  Butler,  21  Kans. 
522  ;  Spencer  v.  Spencer,  3  Jones'  Eq. 
(N.  C.)  404;  Terry  v.  Hopkins,  1 
Hill's  Ch.  (S.  C.)l  ;  Williams  v.  Carle, 
10  N.  J.  Eq.  543  ;  Freeman  v.  Hart- 
man,  45  111.  57  ;  Belt  v.  Ferguson,  3 
Grant  (Pa.)  289  ;  Duncan's  Appeal,  43 
Pa.  St.  67;  Fletcher  v.  Ashley,  6 
Gratt.  (Va.)  332. 

4  Alkire  v.  Alkire,  134  Ind.  350,  32 
N.  E.  Rep.  571  ;  Murray  v.  Murray, 
90  Ky.  1,  13  S.  W.  Rep.  244. 

St.  George  v.  Wake,  1  Mylne&K. 
610  ;  Strathmore  v.  Bowes,  2  Cox  28. 

s  England  v.  Downs,  2  Beav.  522  ; 
(  handler  v.  Hollingsworth,  3  Del.  'Ch. 
99. 

1  Dudley  v.  Dudley,  76  Wis.  567,  45 
N.  W.  Rep.  602  ;  Chandler  v.  Hollings- 
worth, 3  Del.  Ch.  99. 


I  31 


FRAU  DULENT   TK A  NSF  I .  RS. 


§  315.  Fraudulent  transfers  as  affecting  dower.  —  It  seems 
to  be  quite  clearly  established  '  that  where  a  deed  made 
by  a  husband  and  wife  is  set  aside  as  a  fraud  upon  cr 
itors,  the  judgment  will  not  operate  to  bar  the  wife's  right 
of  dower.  The  creditors  cannot  claim  under  the  con- 
veyance and  against  it,  or  ask  to  have  it  annulled  as  to 
creditors  and  held  valid  as  against  the  wife.-  The  theory 
of  the  law  is  that  the  wife  cannot  release  her  dower  in 
her  husband's  real  estate,  except  by  joining  with  him  in  a 
conveyance;3  a  release  to  a  stranger  to  the  title  is 
ineffectual,4  and  as  the  husband's  deed  is  declared  void 
at  the  creditor's  instigation,  the  wife's  release  falls 
with  it.5 

Dower  is  not  barred  by  an  assignment  under  the  Bank- 
rupt Act.6 

§  315a.  Judgment  against  wife.  —  It  has  appeared7 that,  in 
the  Federal  courts,  a  personal  money  judgment  cannot 
be  had  against  a  wife  though  she  be  a  fraudulent  alienee.8 


1  See  '"Effect  of  Fraudulent  Con- 
veyances upon  the  Right  of  Dower." 
5  Cent.  L.  J.  459,  and  cas^s  cited. 

1  Robinson  v.  Bates.  3  Mete.  (Mass 
40  :  Summers  v.  Babb,  13  111.  483  ; 
Dugan  v.  Massey,  6  Busb  (Ky.)  81  : 
Cox  v.  Wilder,  2  Dillon  47  :  Wood- 
worth  v.  Paige,  5  Ohio  St.  70  ; 
Richardson  v.  Wyman,  62  Mi 
Hutchinson  v.  Boltz.  35  W.  Va.  754, 
14  S.  E.  Rep.  267  :  Morton  v.  Noble,  4 
Chic.  L.  X.  157;  Maloney  v.  Horan, 
12  Abb.  Pr.  (N.  Y.  1  X.  S  389,  49  N.  Y. 
Ill  ;  Lowry  v.  Smith,  9  Hun  (N,  Y.  I 
515  ;  Follansbee  v.  Follansbee,  1  D. 
C.  App.  326  ;  Miller  v.  Miller,  140 
Ind.  174.  39  X.  E.  Rep.  547. 

3  Tompkins   v.  Fonda.   4  Paige    N 
Y.)  448:  Merchant-,"  Bank  v.   Thom- 
son. 55  X.  Y.  12. 

4  Harriman   v.  Gray,  49  Me.  5:J7. 

0  Munger  v.    Perkins,    62   Wis.  499, 


22  X.  W.  Rep.  511  ;  Bohannon  v. 
Comb>.  97  .Mo.  446.  11  S.  W  Rep. 
232;  Horton  v.  Kelly,  40  Minn.  L93, 
41  X.  W.  Rep.  1031  ;  Hinchliffe  v. 
Shea,  in:;  X.  Y.  155,  B  N  E.  Rep,  477: 
Wilkinson  v.  Paddock.  57  Hun,  191, 
11  X.  Y.  Supp.  442;  afiPd  185  N.  Y. 
74-:  27  X.  E.  Rep.  407  A-  to  the 
question  whether  t!i-'  wife  has  a  right 
of  dower  in  land  paid  for  by  her  bus- 
band  but  taken  in  tin-  name  of  a  third 
parry,  if  such  land  is  subjected  to  the 
claims  litors   the    authorities 

differ      - 
6  Porter   v.   Lazear,    L09   '"    -    84, 

"Phipps        -  k,  :<"■   1 

Trust    C  -  ck  97  U.  8 

Clark  v.  Beecher,  154  it  8. 

C.  Rep.  ue 


JO 


CHAPTER  XXI. 


FRAUDULENT  GENERAL  ASSIGNMENTS. 


g  316.     Voluntary  assignments. 
316a.  Property  transferred  by  assign- 
ment. 
316b.  Assent  of  assignee. 
316c.  Creditor's  proceedings. 

317.  Word  "  void"  construed. 

318.  Delay  and  hindrance. 

319.  Intent  affecting  assignments. 
319a.  Rights  and  duties  of  assignee. 
3196.  Partnership  assignments. 

:!J0.     Fraud  must   relate   to   instru- 
ment itself. 
32'.     Good  faith. 

322.  Void  on  its  face. 
323a.  Power  to  reform. 

3226.  Purchaser  under  void  assign- 
ment. 

323.  Constructive     frauds     defined 

by  Story. 

324.  Assignments         contravening 

statutes. 

335.  Transfers  to  prevent   sacrifice 

of  property. 

336.  Reservations  —  Exempt     prop- 

erty. 
:>27.      Kesris  in-  surplus. 

328.  Releases  exacted  in  assign- 
ments. 

339.  Preferring  claims  in  which  as- 
signor is  partner  —  Rights 
of  sur\ ivor. 

330.  Authorizing    trustee    to    con- 

t  inue  business. 

331.  Illustrations    and     authorities. 


'"  i  Delay— Sales  upon  credit. 
333   I 

333a.  Exceptional  rule. 

334.  Exempting  assignee  from  lia- 

bility. 

335.  Providing  for  counsel  fees. 

336.  Authority  to  compromise. 

337.  Fraud  of  assignee. 

338.  Ignorance  or  incompetency  of 

assignee  as  badge  of  fraud. 

339.  Transfers    inuring    as    assign- 

ments. 
339a.  White  v.  Cotzhausen  and  con- 
flicting cases. 

340.  Assets  exceeding  liabilities. 

341.  Assignments  to  prevent  prefer- 

ence. 

341a.  Excessive  preferences. 

341&.  Preferences  of  laborers. 

341c.   Notice  to  preferred  creditors. 

341d.  Bill  of  particulars. 

343.     Threatening   to   make   assign- 
ment. 

343a.  Antecedent  agreement. 

343.  Construction   of   assignments. 

344.  Explaining      obnoxious      pro- 

visions. 

345.  Assignments  held  void. 

345a.  Insufficient  grounds  of  attack. 
345&.  Defeated    creditor  entitled    to 

dividend. 
8 16.     Foreign  assignments. 
346a.  Assignments  by  corporations. 
346b.  Contingent  creditors. 


§  316.  Voluntary  assignments.  —To  discuss  the  general 
phases  of  the  law  regulating  voluntary  assignments  made 
by  debtors   for  the   benefit  of  creditors  would    require  a 


316 


VOLUNTARY    ASSIGNMENTS. 


547 


volume,1  and  is  foreign  to  our  purposes.  Certain  elemen- 
tary features  and  principles  easily  traced  through  tin 
multitude  of  cases  illustrating  this  branch  of  our  subject, 
will  be  considered.  When,  as  is  frequently  the  case, 
these  assignments  are  mere  contrivances,  called  into  being 
to  hinder,  delay  or  defraud  creditors,  and  from  their  sur- 
roundings, or  upon  their  face,  contravene  the  provisions 
of  the  statute  13  Eliz.  c.  5,  creditors  or  their  representa- 
tives may  attack  and  annul  them.  The  principles  of  law 
regulating  this  branch  of  the  subject  are  legitimately 
within  the  line  of  our  discussion,  and  will,  upon  close 
investigation,  be  found  to  constitute  a  prolific  source  of 
legal  controversy.  It  seems  remarkable  that  the  instru- 
ment under  which  an  insolvent  surrenders  up  his  depleted 
estate  to  his  creditors  should  be  itself  so  frequently  tainted 
with  the  poison  of  fraud.      Historically  it   may  be   stated 


1  See  Bur  rill  on  Assignments,  6th 
ed.  Baker,  Voorhis  &  Co.,  New 
York.  See,  especially.  Chapter  XXV 
of  that  work.  See  Bishop  on  Insol- 
vent Debtors,  3d  ed.  Baker,  Voorhis 
&  Co.,  1895.  See  §§  114.  115  of  the 
present  treatise  for  the  rules  as  to 
complainants.  Also,  Spelman  v. 
Freedman,  130  N.  Y.  427,  29  N.  E. 
Rep.  765  ;  Reynolds  v.  Ellis,  103  N.  Y. 
115,  123,  8  N.  E.  Rep.  392  ;  Harvey  v. 
McDonnell,  113  N.  Y.  526,  531,  21  N. 
E.  Rep.  695;  Matter  of  Cornell,  110 
N.  Y.  360  18  N.  E.  Rep.  142.  As  to 
election  to  accept  benefits  which  will 
estop  creditors  from  attacking  an 
assignment,  see  Wilson  Bros.  W.  & 
T.  Co.  v.  Daggett,  9  Civ.  Pro.  (N.  Y.) 
408,  and  cases  cited  by  McAdam,  C.  J. ; 
Ryhiner  v.  Ruegger,  19  III.  App.  162  ; 
Groves  v.  Rice,  148  N.  Y.  233,  42  N.  E. 
Rep.  664 ;  Mills  v.  Parkhurst,  126  N. 
Y.  89,  26  N.  E.  Rep.  1041  ;  Terry  v. 
Munger,  121  N.  Y.  161,  24  N.  E.  Rep. 
272  ;  Conrow  v.  Little,  115  N.  Y.  387, 
22  N.  E.  Rep.  346  ;   Cavanagh  v.  Mor- 


row, 67  How.  Pr.  (N.  Y.)  211  .  Levy 
v.  James,  49  Hun  (N.  V.)  161.  1  N.  Y. 
Supp.  604.  Compare  Robei 
Winne,  144  N.  Y.  70!).  39  N  E.  Rep. 
631  ;  Thompson  v.  Fry,  51  Hun  (X. 
Y.)  296,  4  N.  Y.  Supp.  166.  In 
Wright  v.  Zeigler,  70  Ga.  512,  the 
court  said  :  "  Soa  creditor  cannot  be 
permitted  both  to  assail  and  claim 
under  an  assignment  ;  one  or  the 
other  of  these  alternatives  be  musl 
lake.     His  election  should   he  made 

before    he    commences    pro- lings, 

and  he  should  not  be  permitted  to 
await  tin'  result  of  his  suit  in  order 
to  make  his  flection.  This  would  !»■ 
unfair  to  others  claiming  under  the 
assignment."  Compare  Haydock  v. 
Coope,  53  N.  V.  (is.  \  creditor 
may  be  estopped  from  impeaching 
an  assignmenl  by  accepting  bene- 
fits under  it.  Groves  \.  Rice,  it^ 
N.  Y.  '.':;.;.  12  X.  E  Rep.  )'>'''!  ;  Mills 
v.  Parkhurst.  120  X.  Y.  89,  26  N  E. 
Rep.  KHl. 


548 


VOl  UNTARY    ASSIGNMENTS. 


§316 


that  an  assignment  for  the  benefit  of  creditors  has  been 
characterized  as  a  recent  American  device,  though  this 
statement  has  been  challenged.1  The  word  assignment 
is  sometimes  used  with  reference  to  the  instrument  which 
affects  the  transfer,  and  is  sometimes  applied  to  the  trans- 
fer itself  considered  as  a  legal  effect  or  result."  The 
validity  of  the  assignment  is  generally  determined,  as 
we  shall  see,  by  the  common  law,3  and  the  instrument 
will,  as  a  rule,  be  favored  where  equality  of  distribution 
of  assets  is  attempted.4 

It  may  be  recalled,  as  a  preliminary  to  exploring  this 
field,  that  to  constitute  a  general  assignment  there  must 
be  an  element  of  trust,5  and  the  conveyance  must  be  vol- 
untary.6    Voluntary  assignments,  for  the  benefit  of  cred- 


1  Dunham  v.  Waterman,  17  N.  Y. 
9-15  ;  G rover  v.  Wakeman,  11  Wend. 
(N.  Y.)  187,  216. 

2  Richardson  v.  Thurber,  104  N.  Y. 
610,  11  N.  E.  Rep.  138;  Berger  v. 
Varrelmann,  127  N.  Y.  289,  27  N.  E. 
Rep.  1065. 

3  Schroder  v.  Tompkins,  58  Fed. 
Rep.  672  :  Johnson  v.  Sharp,  31  Ohio 
St.  611. 

4  Reed  v.  Mclntyre,  98  U.  S.  507  ; 
Mayer  v.  Hellman,  91  U.  S.  496 ; 
Boese  v.  Kin-,  108  U.  S.  379,  2  S.  C. 
Rep.  765  ;  Commercial  Nat.  Bank  v. 
Nebraska  State  Bank,  33  Neb.  292,50 
X.  W.  Rep.  L57. 

5  Hine  v.  Bowe,  46  Hun  (N.  Y.)  196; 
Brown  v.  Guthrie,  110  N.  Y.  435  ; 
Fecheimer  v.  Robertson,  53  Ark.  101, 
1:;  S.  W.  Rep.  423;  May  v.  Tenney, 
1  is  r.  s.  66,  13  S.  C.  Rep.  491  ;  Box 
v.  Goodbar,  54  Ark.  6.  14  S.  \V.  Rep. 
925. 

•'  1  -wis  v.  Miller,  '.';;  Weekly  Dig. 
(N.  V.i  195.  hi  Brown  v.  Guthrie, 
IK)  N.  Y  111,  18  X  E.  Rep.  254. 
Finch,  J.,  said:  "The  view  of  the 
case  which   prevailed   with  the  Gen- 


and  the  agreement  which  led  to 
it,  taken  together,  amounted  to  a 
general  assignment  by  an  insolvent 
debtor,  which  was  void  because  it  re- 
served to  him  a  possible  surplus  at 
the  expense  of  unpaid  creditors,  and 
the  right  to  make  preferences  subse- 
quent to  the  conveyance.  If  the 
basis  of  the  reasoning  be  sound,  the 
result  reached  was  a  proper  infer- 
ence ;  but  we  are  not  satisfied  that 
the  mortgage  and  agreement 
amounted  to  a  general  assignment 
by  the  debtor.  In  form  it  was  an 
absolute  sale  upon  a  chattel  mortgage 
given  for  a  fixed  and  agreed  con- 
sideration ;  and  while,  nevertheless, 
such  a  sale,  in  spite  of  its  form,  may 
In'  proved  to  be  an  assignment  in 
trust  (BrittoTi  v.  Lorenz,  45  X.  Y.  51), 
yet,  in  the  present  ras<\  we  are  un- 
able to  discover  any  such  proof.  The 
material  and  essential  characteristics 
of  a  general  assignment  is  the  pres- 
ence of  a  trust.  The  assignee  is 
merely  trustee,  and  not  absolute 
owner.  He  buys  nothing  and  pays 
nothing,  but  takes  the  title  for  the 
performance   of  trust  duties.     There 


§3l6  VOLUNTARY    ASSIGNMENTS.  549 

itors,  have  been  defined  to  be  transfers  of  property  to  an 
assignee,  in  trust,  to  apply  the  same  in  payment  of  debts 
and  return  the  surplus  to  the  debtor.1  The  requisite  of 
good  faith  must  appear.2  A  general  assignment  may  be 
made  in  the  absence  of  a  statute.3  The  assignment 
is  not  a  creature  of  the  statute,  but  the  voluntary  act  of 
the  debtor,  regulated  by  the  statute  as  to  details  in  its 
execution.4 

The  assignment  is  the  exercise  of  the  absolute  dominion 
which  a  person  possesses  over  his  own  property.5  In 
Thrasher  v.  Bentley,6  Folger,  J.,  said  :  "The  act  of  i860 
does  not  give  the  right  to  make  an  assignment  in  favor 
of  creditors,  with  or  without  preferences.  The  right 
exists  at  common  law,  and  if  exercised  honestly,  and  with 
no  design  to  hinder,  delay  or  defraud  creditors,  does  not 
require  the  act  of  i860  to  warrant  it.  The  act  of  i860  is 
a  statute,  not  of  creation,  but  of  direction.  It  recognizes 
the  existence  of  the  power  in  the  citizen  to  make  an 
assignment  of  his  property  to  trustees,  for  the  benefit  of 
his  creditors,  and  does  no  more  than  prescribe  the  mode 
in  which  the  power  shall  be  used,  and  furnish  some  safe- 
guards against  abuse."  The  general  scope  and  object  of 
the  statute  "  was  to  secure  a  faithful  application  of  the 
debtor's  assets,  under  the  terms  and  provisions  of  the 
assignment,  and    in    that  way    to    protect    both    debtors 


was  no  such   element   in   the   trans-  *  Wright  v.  Lee,    2  S.  Dak.  596,   51 

action    between    these   parties.     The  N.  W.  Rep.  TOG. 

purchaser    became    absolute    owner,  3  Tompkins    v.    Hunter,    111*  N.   Y. 

and  paid  or  secured  the  full  amount  121,    43   N.   E.    Rep.    532;    Weider    v. 

of    his   mortgage.'*      See   Warner   v.  Maddox,  66   Tex.   372,    1   S    \V.    Rep. 

Littlefield,    89   Mich.   329,    50  N.  W.  168. 

Rep.  721.  4  See  Sanger  v.  Flow,  48  Fed.    Rep. 

1  Weber  v.  Mick,   131   111.  533,  23  N.  152.  156  ;  Baer  v.  Rooks,  50  Fed    Rep. 

E.  Rep.  646.  See  Ginther  v.  Richmond,  898,901;  Thompson  v.  Rainwater,  49 

18  Hun  (N.  Y.)  232.    A  power  of  attor-  Fed.  Rep.  406. 

ney  cannot  be  converted  into  an  as-  B  Brashear  v.  West,  7  Pet.  614. 

signment.    Beans  v.  Bullitt,  57  Pa.  St.  6  1  Abb.  X.  C.  I  N.  V.  1  43. 
221;  Banning  v.  Sibley,  3  Minn.  389. 


550  VOLUNTARY    ASSIGNMENTS.  §  3  I  6 

and  creditors  against  the  waste,  improvidence,  negligence 
and  infidelity  of  the  assignee,  in  the  execution  of  the 
trusts  created  by  it."  '  The  property  in  possession  of 
the  assignee  is  not  in  custodia  legis?  for  the  reason  that 
the  assignee  is  not  technically  an  officer  of  the  court,3 
but  is  a  trustee,  bound  to  account  according  to  the  terms 
of  the  instrument  itself,  and  his  authority  depends  upon 
the  validity  of  the  assignment,  and  is  not  technically  con- 
ferred by  the  court.4  Some  cases  consider  him  a  quasi 
public  officer,5  in  so  far  as  the  statutes  regulate  his 
procedure. 

The  assignee  derives  his  power  from  the  assignment, 
which  is  both  the  guide  and  measure  of  his  duty,  is  the 
language  of  some  of  the  cases.6  It  is  the  chart  which  he 
must  follow.7  Beyond  that  instrument  or  outside  of  its 
terms  he  is,  ordinarily,  powerless  and  without  authority. 
The  control  of  the  court  over  his  actions  is  limited  in  the 
same  way,  and  can  only  be  exercised  to  compel  his  per- 
formance of  the  stipulated  and  defined  trust,  and  protect 
the  rights  which  flow  from  it.  He  distributes  the  pro- 
ceeds of  the  estate  placed  in  his  care  according  to  the  dic- 
tation and  under  the  sole  guidance  of  the  assignment,  and 
the  statutory  provisions  merely  regulate  and  guard  his 
exercise  of  an  authority  derived  from  the  will  of  the 
assignor.  The  courts,  therefore,  cannot  direct  him  to  pay 
a  debt  of  the   assignor,  or  give   it   preference  in  violation 

People  ^.Chalmers,  I  llnuiN*.  Y.)  ;  But  see  Farwell  v.  Cohen,  138 111. 

686,  affd.  60  \.  Y.  L54.  216,  28  N.  E.  Rep.  35,  32  Id.  893. 

-  ■    Lehman    v.    Rosengarten,   23  '  Adler  v.  Erker,  1  MK'rary  257. 

Fed    Rep.  642;  Stafo    exrel.  Enderlin  s  Levy's  Accounting,   1  Abb.  X.C 

State  Bk.  v.  Rose,  I  N.  Dak.819,52  X.  (N.  Y.)  187;   Nichols  v.  McEwen,  17 

\v.  Rep.  614  :  Mattbewsv.  Ott,87  Wis.  \.  V   22,  27. 

399;    B.  C.  sub  nom.  Tnre  Morgan,  58  "Citizens"    Hank     v.    Williams.    128 

N.W.  Rep  ;?i.     In  [owaand  Minne-  N.  Y.  77,28  X.   E.  Rep.  33;  Matter  of 

sota,  a  contrarj  rule  prevails.     Ham-  Hevenor,  144  X.  Y.  273,  39  X.  E,  Rep. 

ilton  Brow  n   Shoe   I  '<-.   v.   Mercer,  84  393. 

Iowa  587,  51  X.  W.  Rep.  415;  Second  7  Middleton  v.  Taber,  46  S.  C.  355, 

Nat.  Bk.  v.  Schrauck,  48  .Minn.  88,  44  24  S.  E.  Rep.  282. 
X    W.  Rep.  542. 


§316  VOLUNTARY    ASSIGNMENTS.  551 

of  the  terms  of  the  assignment  and  the  rights  of  other 
creditors  under  it.  To  hold  the  contrary  would  be  to  put 
the  court  in  the  place  of  the  assignor,  and  assert  a  right 
to  modify  the  terms  of  the  assignment,  after  it  had  taken 
effect,  against  the  will  of  its  maker,  and  to  the  injury  of 
those  protected  by  it.  The  assignee  is  merely  the  repre- 
sentative of  the  debtor  and  must  be  governed  by  the 
express  terms  of  his  trust.1  The  assignee  is  required  to 
recognize  and  pay  only  claims  which  could  be  ascertained 
and  fixed  at  the  time  when  the  assignment  was  made.~ 
The  parties  cannot  change  the  terms  of  the  instrument,3 
or  withdraw  the  property  from  the  jurisdiction  of  the 
court,  or  absolve  the  assignee  from  its  control.  Nor  can 
the  assignor  substitute  a  successor  if  the  assignee  resigns. 
The  new  appointment  must  be  made  by  the  court.4 

Under  a  valid  assignment  the  assignee,  having  pos- 
session of  the  goods  taken  in  pursuance  thereof,  has  a 
valid  title  to  them  as  against  the  claims  of  subsequent 
attaching  creditors.5  There  must,  of  course,  be  a  change 
of  possession  to  satisfy  the  statute,0  or  the  presumption 
of  fraud  in  the  transfer  will  arise." 


1  Finch,  J.,  in  Matter  of  Lewis,  81  209;  Butler  v.  Wendell.  57  Mich.  62, 
N.  Y.  424.  See  Nicholson  v.  Leavitt,  23  N.  W.  Rep.  460  ;  May  v.  First  Nat. 
6  N.  Y.  519.  Where,  therefore,  the  Bank.  122  111.  556,  13  X.  E.  Rep.  806; 
debts  set  out  in  the  assignment  are  Smith's  Appeal,  104  Pa.  St.  381; 
fictitious  or  excessive,  this  may  be  a  Chafee  v.  Fourth  Nat.  Bank.  71  Me. 
ground  for  setting  aside  the  assign-  514  :  Goflin  v.  Kelling,  83  Ky.  649  ;  Eg- 
ment,  and  the  debts  cannot  be  re-  bert  v.  Baker  58  Conn.  319,  20  At  I. 
duced  to  the  proper  amount,  and  the  Rep.  466  :  Receiver  of  State  Bk.  v. 
assignment  as  thus  modified  sus-  First  Nat.  Bk.,  34  N.  J.  Eq.  450; 
tained.  Roberts  v.  Victor,  130  N.  Y.  Thurston  v.  Rosenfield  42  Mo.  474. 
585,  29  N.  E.  Rep.  1025.  8McConihe  v.  Derby, 62 Hun (N.  Y.) 

2  Matter  of  Hevenor,  144  N.  Y.  274,  90,  16  N.  Y.  Supp.  474  ;  Ball  v.  Loomis, 
39  N.  E.  Rep.  393.  29  N.  \r.  412  ;  South  Danvers  Nat.  Bk. 

3  See  §  322a.  v.  Stevens,  5  App.  Div.   (N.    Y.)  892, 
4Chapin   v.    Thompson,    89   N.   Y.  39  N.    Y.    Supp.    298;    Mcllhargj    v. 

280.  Chambers,    117   N.    V.   532,  23  X.  E. 

5  Schroder    v.    Tompkins,    58    Fed.  Rep.  561 ;  Cram  v.  Mitchell,  1  Sandf. 

Rep.   676;  Barnett  v.  Kinney,   147  U.  Ch.  (N.  Y.)  251. 

S.  476,   13  S.  C.   Rep.  403;  Frank  v.  'Compare  Mcllhargy  v.  Chambers, 

Bobbitt,  155  Mass.  112,  29  N.  E.  Rep.  117  N.  Yr.  532,  23  N.  E,  Rep.  561 


552  PROPERTY    TRANSFERRED.  §3'6a 

In  Mills  v.  Parkhurst,1  Gray,  J.,  in  explaining  the  gen- 
eral characteristics  of  these  voluntary  conveyances,  said: 
••  The  assignment  is  not  like  a  gift  of  property  upon  con- 
ditions, open  to  the  acceptance  or  rejection  of  the  donee. 
It  is  a  payment  by  the  assignor  of  his  debts  upon  his  own 
plan.  The  deed  of  assignment  is  in  no  sense  a  contract 
between  the  debtor  and  his  creditors,  and  it  does  not 
depend  for  its  validity  in  law  upon  their  assent.  It  is  a 
means  or  mode  which  the  statute  permits  to  be  adopted 
by  an  insolvent  debtor,  for  the  distribution  of  his  estate 
among  his  creditors,  and  so  long  as  he  has  acted  without 
fraud,  in  fact  or  in  law,  and  has  complied  with  the  pre- 
scriptions of  the  act,  his  conveyance  to  an  assignee  for 
the  purposes  stated  therein,  will  stand  and  be  effective." 

>?  316a.  Property  transferred  by  assignment. —  I  he  discus- 
sion has  already  embraced  the  authorities  declaring  what 
assets  creditors  may  reach  by  bill  or  other  proceeding.2 
As  creditors  are  frequently  forced  practically  to  accept 
as  payment  of  their  claims  whatever  the  assignee  is  able 
to  realize  from  the  property,  it  is  important  to  know  what 
estate  is  acquired  by  such  voluntary  transfer.  Every 
interest  to  which  the  personal  representatives  of  a 
deceased  person  could  succeed  may  pass  by  a  properly 
framed  assignment.3  The  assignee  may  acquire  title  to 
a  claim   for   conversion  ;  '   may  gain  a  right  to  recover  in 


'126   N     Y     89,   94.  26  N     E.    Rep.  nients  of  government  claims,  see  Taft 

1041.  v.   Marsily,    120  N.   V.  474,  24  N.  E. 

'See  Chap.  II  Rep.  926  ;  Bachman  v.  Lawson,   109 

9ee  Zabriskie  v.  Smith,   13   N    V.  U.  S.  659,  3  S.  C.  Rep.  479  ;   Leonard 

385.      See     Bishop    on     Ensol.  v.  Nye,  125  Mass.  455 ;  Heard  v.  Stur- 

Debtors,  /    1 18  :   Norfolk  &   W.  R.  R.  gis,  146  Mass.  545.  16  N.  E.  Rep.  437. 
Co.  v    Read,87  Va.   L85,  L2  S.  E.  Rep.         4  Whittaker  v.  Merrill,  30  Barb.  (N, 

395      Property   forfeited   to  the   gov-  Y.i  389;   Richtmeyer  v.   Remsen,  38 

eminent  does  not  pass  to  the  assignee,  N.  Y.  206 ;  Sherman  v.  Elder,  24  N. 

and  a  Bubsequenl  remission  <>f  1  he  for-  V.  381  ;  McKee  v.  Judd.  12  N.  Y.  622 ; 

feiture  will  nol  inure  to  the  benefit  of  Man  maun  v.  Jefferson,  4  Misc.  (N.  Y.) 

the  assignee.      Ward    v.    Webster,   9  147,  23  N.  Y.  Supp.  085. 
Daly  (N     Y.i  182.      But,  as  to  assign- 


§3i6a 


PROPERTY     TRANSFERRED. 


553 


replevin,1  and  to  sue  a  common  carrier  for  the  loss  of 
goods.2  He  takes  judgments,3  moneys  deposited  in 
bank,4  and  lands5  which  belonged  to  the  assignor.  In 
Warner  v.  JafTray,6  the  court  said  :  "  The  assignment  was 
a  mere  voluntary  conveyance,  and  can  have  no  greater 
effect,  so  far  as  passing  title  to  the  property  assigned, 
than  any  other  conveyance.7  In  New  York  State  by 
statute  the  assignee  is  clothed  with  power  to  assail  fraudu- 
lent alienations  of  property  made  by  the  assignor.8 
Rights  of  action  for  personal  torts  which  die  with  the' 
person  are  not  assignable  ; !t  as,  for  instance,  damages  for 
an  assault  and  battery,10  and  false  imprisonment  ;  n  so  the 
title  to  trust  property  does  not  pass ; l2  nor  does  property 
in  transit;13  nor  a  wife's  dower  right;11  nor  exempt 
property.15 

It   is,  of    course,    as   we   shall   see,    fraudulent   for   the 
assignor  to  withhold  assets  from  the  assignee.16 


1  Jackson  v.  Losee,  4  Sandf.  Cli. 
(N.  Y.)  381. 

•  Merrill  v.  Grinnell,  30  N.  Y.  594; 
McKee  v.  Judd,  12  N.  Y.  622  ;  Jordan 
v.  Gillen,  44  N.  H.  424. 

3  Emigrants'  Ind.  Sav'gs  Bank  v. 
Roche,  93  N.  Y.  374. 

4  Beckvvitli  v.  Union  Bank,  9  N.  Y. 
211. 

6  Matter  of  Marsh,  3  Cow.  (N.  Y.)  69. 

*  96  N.  Y.  254. 

1  Bank  of  Commerce  v.  Payne,  86 
Ky.  446,  8  S.  W.  Rep.  856. 

H  Southerd  v.  Benner.  72  N.  Y.  424  ; 
Spring  v.  Short,  90  N.  Y.  538  ;  Ball  v. 
Slaften,  98  N.  Y.  622  ;  Fort  Stanwix 
Bank  v.  Leggett,  51  N.  Y.  552  ;  Mat- 
ter of  Raymond,  27  Hun  (N.  Y.)  508  ; 
Matter  of  Cornell,  110  N.  Y.  360,  18 
N.  E.  Rep.  142.  The  assignee  cannot 
divest  himself  or  be  divested  of  his 
right  to  sue  for  assets  so  long  as  the 
trust  continues.  Stanford  v.  Lock- 
wood,  95  N.  Y.  582. 


9  People  v.  Tioga  Common  Pleas, 
19  Wend.  (N.  Y.)  73  ;  Brooks  v.  Han- 
ford,  15  Abb.  Pr.  (N.  Y.)  342  ;  Hodg- 
man  v.  Western  R.  R.  Co.,  7  How.  Pr. 
(N.  Y.)492;  Cent.  R.  R.  &  B.  Co.  v. 
Brunswick  &  W.  R.  R.  Co.,  87  Ga. 
386,  13  S.  E.  Rep.  520. 

10  See  Pulver  v.  Harris,  52  N.  Y.  7:;  . 
Bishop  on  Insol.  Debtors,  ^  143. 

11  Hunt  v.  Conrad,  47  Minn.  557,  50 
N.  W.  Rep.  614. 

15  Kip  v.  Bank  of  New  York,  1(1 
Johns.  (N.  Y  )63. 

13  Lacker  v.  Rhoades,  51   N.  Y.  (ill. 

14  Dimon  v.  Delmonico,  35  Barb. 
(N.  Y.)  554. 

:  ■  Heekman  v.  Messinger,  49  Pa.  St. 
465;  Baldwin  v.  Peet,  22  Tex.  708; 
Smith  v.  Mitchell.  12  .Midi.  L80 

16  Coursey  v.  Morton,  182  N.  Y. 
556,  30  N.  E.  Rep.  231.  Shultz  v. 
Hoagland,  85  N.  Y.  464. 


534  ASSENT   OF    A.SSIGNEEE.  ^3l6b 

The  assignment,  it  may  be  here  recalled,  takes  effect 
from  the  time  of  its  delivery,1  and  the  instrument  should 
be  so  construed  as  to  give  effect  to  the  intention  of  the 
parties.2  The  recording  of  the  instrument  is  not  a 
necessary  prerequisite  to  the  vesting  of  the  title  to  the 
assigned  property  in  the  assignee.3 

£  316b.  Assent  of  assignee.  —  To  render  the  transfer 
effectual,  the  assignee  must  accept  the  trust.  In  New 
York  State  his  assent  to  act  as  assignee  must  be  acknowl- 
edged. After  some  controversy  it  has  been  decided'  that 
the  assent  may  be  written  or  contained  on  a  paper  sepa- 
rate from  the  assignment  itself.1  Without  the  assent  of 
the  assignee  the  assignment  is  void.5  In  Scott  v.  Mills," 
the  court  says  :  "  No  form  of  consent  is  prescribed,  and 
no  place  for  its  appearance  in  the  assignment  is  desig- 
nated, and  the  statute  is  fully  satisfied  by  an  appear 
ance  of  assent  in  the  instrument."  T 

Where  the  assignment  is  made  to  more  than  one 
assignee,  all  who  accept  must  act.8 


1  Nieoll  v.   Spowers,    105  N.  Y.   1,  l  Franey  v.  Smith,  125  N.  V.  41.  25 

11  N.  E.  Rep.  138  ;  Warner  v.  Jaffray,  N.  E.  Rep.  1079. 

90     N.    Y.    248  ;     Dutchess    County  5  Rennie  v.  Beau,  24  Hun  (N.  Y.) 

Mutual  Ins.  Co.  v.  Van  Wagonen,  132  123  ;  Crosby  v.  Hillyer,  24  Wend.  (N. 

N.  Y.  398,  30  N.  E.  Rep.  971.    "  Deliv-  Y.)  284  :  Lawrence  v.    Davis,  3  McL. 

ery  is  as  essential  since  the  statute  of  177:    Pierson    v.   Manning,   2    Mich, 

assignments  as  before  its  passage.     It  462. 

is  the  final  act  without  which  all  6  45  Hun  (N.  Y.)  264,  affi'd  115  N. 
othei  formalities  arc  ineffectual,  and  Y.  376,  22  N.  E.  Rep.  156. 
the  real  date  of  the  instrument  is  the  'The  assignment  "must  be  in 
time  of  its  delivery."  Mcllhargy  v.  writing  and  acknowledged,  and  the 
Chambers,  1 17  N.  Y.  539,  23  N.  E.  assignee  must  assent  thereto  in  writ- 
Rep.  561  ;  Betz  v.  Snyder,  48  Ohio  St.  ing.  and  when  it  has  thus  been  exe- 
192,  88  X.  E.  Rep.  234.  cuted  and  delivered,  it  takes  effect, 

-  Kmi.-nmt    hid.  Savings   hank.    v.  and  the  title  to  the  property  passes  to 

Roche,  '•»:;  N.  Y.  374.  the  assignee."     Warner  v.  Jaffray,  98 

Winner  v.  Jaffray,  96  N.  Y.  248;  N.  Y.  252. 

Ryanv.    Webb,  39  Hun  (N.   Y.)  435  ;  8  Brennan  v.  Willson,  7  Daly(N.Y.| 

Franej   v.  Smith,    125  N.  Y     19,  25  N.  59;  affi'd,  71  N.  Y.  502. 
I.    Rep.   1079     Pancoast   v.    Spowers, 
20  J.  &  s.  (N.   Y.)  528. 


§§3160-318  creditor's  proceedings. 


D33 


§  316c.  Creditor's  proceedings.  The  creditor,  feeling 
aggrieved  by  an  assignment,  may  proceed  by  action  claim- 
ing the  right  to  set  it  aside,  and  also  institute  supple- 
mentary proceedings.1  The  fact  that  the  examination  of 
the  debtor  may  disclose  the  fraudulent  character  of  the 
assignment  is  not  a  valid  reason  for  declining  to  answer 
questions  on  the  examination,3  and  a  refusal  to  testify 
may  be  punished  as  a  contempt:'  In  New  York  the 
assignee  may  be  directed  to  account  before  a  referee.4 

§  317.  Word  "void"  construed.  —  The  distinction  between 
void  and  voidable  acts  is  constantly  arising.  The  term 
"  void  "  is  often  interpreted  to  mean  nothing  more  than 
"  voidable,"  and  this  construction  is  especially  true  as 
applied  to  voluntary  assignments.5  Though  the  statute 
in  characterizing  assignments  constantly  uses  the  term 
"  void  as  to  creditors,"  it  is  obvious  that  "  nothing  more 
is  intended  than  inoperative  or  voidable;""  or,  as  was 
observed  by  Chief-J  jstice  Shaw,  "  such  conveyance  is  not 
absolutely  void,  but  voidable  only  by  creditors."7  It  is 
the  distino-uishinor  characteristic  of  a  void  act  that  it  is 
incapable  of  ratification,  but  an  assignment  which  is 
fraudulent  upon  its  face  is  capable  of  confirmation  by 
creditors,8  and  is  good  between  the  parties,  hence  it  is 
not,  logically  speaking,  void. 

§318.  Delay  and  hindrance.  —  Mr,  Burrill  says:9  "The 
term  delay  has  an  obvious  reference  to  time,  and  hindrance 


1  Matter  of  Sickle,  52  Hun  (N.  Y.)  ,;  Per  Redfield,  Ch.  J.,  in  Merrill  v. 

527,  5  N.   Y.   Supp.    703  :    Schloss  v.  Englesby,  28  Vt.  155. 

Wallach,  38  Hun  (N.  Y.)  638,  102  N.  'Edwards     v.      Mitchell,    1     Gray 

Y.  683.  (Mass.)  241. 

-  Lathrop  v.  Clapp,  40  N.  Y.  328.  s  See  White  v.   Banks.  21    Ala.  713. 

8  Lathrop   v.  Clapp,  40  N.  Y.   328:  Compare    Hone     v.     Henriquez,     13 

Tremain  v.  Richardson,  68  N.  Y.  617.  Wend.  (N.  Y.)  242  ;  Geisse  v.   Beall,  8 

J  Produce  Bank  v.  Morton,    67   N.  Wis.  367. 

Y.  199  ;  Myers  v.  Becker,  95  N.  Y.  486.  9  Burrill  on  Assignments,  §  335. 

6  See  Burrill  on  Assignments,  §  319. 


556  DELAY    AM)    HINDRANCE.  §  318 

to  the  interposition  of  obstacles  in  the  way  of  a  creditor; 
but,  to  a  certain  extent,  the  one  involves  and  includes  the 
other.  In  point  of  fact,  and  as  actually  applied  by  the 
courts,  they  are  always  taken  together.  The  following 
are  prominent  instances  in  which  assignments  have  been 
declared  void  on  the  ground  of  hindrance  and  delay. 
Where  the  time  of  sale,1  or  of  collection  by  the  assignee,2 
or  of  finally  closing  the  trust,3  has  been,  by  the  terms  of 
the  assignment,  unreasonably  or  indefinitely  postponed  ; 
where  the  assignee  has  been  expressly  authorized  to  sell 
at  retail,  and  on  credit,4  or  on  credit  simply  ; 5  where  the 
assignment  has  been  made  with  a  view  to  prevent  a  sacri- 
fice of  the  property  ; 6  where  the  proceeds  of  the  assigned 
property  have  been  directed  to  be  used  in  defending  all 
suits  which  might  be  brought  by  creditors  to  recover  their 
debts,7  and  where  creditors  who  should  sue  have  been 
expressly  debarred  from  the  benefit  of  the  assignment  ; 8 
or  postponed  until  all  the  other  creditors  are  paid.9  All 
these  were  instances  of  delaying  and  hindering  creditors 
in  the  prosecution  of  their  remedies  in  the  strict  sense  of 
the  terms  used  in  the  statute."  In  the  famous  Sprague 
litigation  it  is  said  that  a  debtor  has  no  right  to  postpone 
or  put  in  peril  the  claims  of  his  creditors  without  their 
consent,  and  that  a  conveyance  which  attempts  so  to  do, 
or  which  is  executed  for  the  purpose  of  depriving  cred- 
itors of  their  right  to  enforce  their  just  claims  against  the 


'Citing    Hafiicr   v.    Irwin,     1   Ired.  6  Citing  Van  Nest  v.  Yoe,  1  Sandf. 

(N.  C.)  Law,  4'JO.  Ch.   (N.    Y.i   4;   Vernon   v.   Morton,  8 

•Citing    Storm     v.    Davenport,    1  Dana   (Ivv.)  217.     But  see  Cason   v. 

Sandf.  Ch.  (N.  Y.)  185.  Murray,  15  Mo.  378. 

'Citing    Arthur  v.   Commercial    &  'Citing   Planck    v.  Schermerhorn, 

I;    I;    Bk.,  L7Miss.394.  3   Barb.  Ch.   (N.   Y.)    644 ;  Mead   v. 

4  Citing     Meacham    \      Sternes,    9  Phillips,  1  Sandf.  Ch.  (N.  Y.)  83. 

Paige  (N.  Y.)  398,  406.  -  Citing  Spence  v.  Bagwell,  GGratt. 

I  iting    Barney   v.   Griffin,  .  N.  Y.  (Va.)444;  Berry  v.  Riley,  2  Barb.  (N. 

865;   Nicholson    v.    Leavitt,    6   N.  Y.  Y.)  307. 

510.  »  Citing    Marsh    v.    Bennett,  5  Mc- 

Lean  117. 


§319  INTENT   AFFECTING    ASSIGNMENTS.  557 

property  of  their  debtor,  by  placing  it  beyond  their  reach 
or  control  for  an  unlimited,  indefinite,  or  uncertain  period, 
is  in  conscience,  as  well  as  in  law,  fraudulent.1  An 
assignment  or  transfer  with  intent  to  delay  the  collec- 
tion of  a  debt  is  condemned  by  the  statute  and  the  com- 
mon law,  no  less  than  a  transferor  assignment  into  which 
the  element  of  actual  fraud  enters.2 

§  319.  Intent  affecting  assignments.  —  "  It  is  clear,  how- 
ever," says  Mr.  Burrill,  "  from  the  language  of  the  Eng- 
lish statute  of  13  Elizabeth,  that  its  provisions  were 
directed  exclusively  against  conveyances  made  with  an 
actual  intent?  on  the  part  of  debtors,  to  hinder,  delay  or 
defraud  creditors,  as  distinguished  from  the  mere  effect  ox 
operation  of  such  conveyances.  The  expressions  in  the 
preamble  —  ' devised  and  contrived'  '  to  the  end,  purpose, 
and  intent  to  delay,'  etc.,  leave  no  room  for  doubt  on  this 
point.  Hence,  it  has  sometimes  been  very  expressively 
designated  as  the  '  statute  against  fraudulent  intents  in 
alienation.'  "4  It  will  be  presently  shown  that  the  learned 
writer  has  stated  the  rule  too  broadly,  for  a  fraudulent 
intent  is  often  imputed  by  the  law  in  cases  where  the 
assignor's  motives  were  undoubtedly  honest.5  Generally 
speaking  the  subject  of  inquiry  in  these  cases  is  the  intent 
of  the  assignor  or  debtor,6  at  the  time  of  the  execution   of 


1  De  Wolf  v.  Sprague  Mfg.  Co.,  49  23  Minn     242,    1  Am.  Insol.  Rep.  36 

Conn.  325.  Peck  v.  Crouse,  40  Barb.  (N.  Y.)  157 

-  Buell   v.    Rope.    G   App    Div.    (N.  Putnam    \ .    Hubbell,  42  N.    Y.  106 

Y.)  115,  39  N.  Y.    Supp.  475.     Citing  Rubl  v.  Phillips,  48  N.  Y.  125  :  Lesher 

McConnell  v.  Sherwood,  84  N.  Y.  530.  v.  Getman,  28  Minn.  93,  9  N.  W.  Rep. 

3  See  Moore  v.  Stege,  93  Ky.  27,  18  585  :  Jaeger  v.  Kelley,  52  N.  Y.  274  ; 
S.  W.  Rep.   1019.  Dudley    v.    Danforth,  61    N.  Y.  626  ; 

4  Burrill  on  Assignments,  §  332.  State   ex  rel.    Enderlin   State   Bk.   v. 

5  See  §§  8,  9,  19,  322.  Kose,  4  N.  Dak.  325,  58  N.   W.  Rep. 

6  Wilson  v.  Forsyth,  24  Barb.  (N.  514;  Rouse  v.  Bowers,  108  N.  C.  182, 
Y.)  120;  Mathews  v.  Poultney,  33  12  S.  E.  Rep.  985;  Main  v.  Lynch,  54 
Barb.  (N.  Y.)  127;  Griffin  v.  Mar-  Md.  658;  Forbes  v.  Waller,  25  N.  Y. 
quardt,  17  N.  V.  28  ;  Cuyler  v.  McCart-  439.  "  An  assignee  for  the  benefit  of 
ney,  40  N.  Y.  221 ;  Bennett  v.  Ellison,  creditors  stands   in  the   place  of  the 


558 


INTENT    AFFECTING   ASSIGNMENTS. 


§  3 '9 


the  instrument,1  though  there  is  a  growing  line  of  authority 
tending  to  establish  the  rule  that  the  fraudulent  purpose 
sufficient  to  defeat  or  overturn  the  instrument  must  be  par- 
ticipated in  by  the  assignee,  trustee 3  or  beneficiaries.3  The 
latter  idea  is  certainly  gaining  ground.  The  testimony 
of  both  the  assignor  and  assignee  upon  the  question  of 
intent   is  proper.4      Recognizing    the  general    rule,   else- 


assignor,  and  is  so  affected  with  hie 
intent,  thai  if  it  is  unlawful  the  in- 
strument cannot  stand."  Tabor  v. 
Van  TasseU,  86  N.  V.  643.  See  g  316. 
In  Ailler  v.  Ecker,  1  McCrary  356, 
the  court  remarks  that  the  only  intent 
which  will  dot  ermine  the  validity  of 
an  assignment  is  that  of  the  assignor, 
at  the  time  it  is  mad'',  and  contem- 
poraneous fraudulent  acts  are  evi- 
dence of  this  intent.  It  is  then 
observed  of  the  case  under  consider- 
ation, that  it  is  in  proof  that  one  E. 
being  insolvent,  and  owing  debts 
amounting  to  more  than  double  the 
value  of  bis  assets,  took  from  his  busi- 
ness, within  four  weeks  before  bis 
assignment,  a  sum  equal  to  one-half 
of  the  value  of  the  property  assigned, 

and  with  it  erected  a  building  upon  a 
lot  owned  by  his  wife.  Within  a 
short  time  then-after   he  joined   with 

1n>   wife  in  giving  a  mortgageupou 

this  property  to  bis  father-in-law.  for 

three  times  the  amount  of  any  debt 
owing  either  by  him  or  his  wife,  and 
i  In-  mortgage  and  accompanying 
notes  wer,-  senl  to  the  father-in-law, 
without  any  request  on  his  pari,  or 
any  information  on  t be  subject,  until 
the  papers  were  receu  ed.  The  court 
comment  upon  the  fact  that  there  is 
no  <-\  jdi  nee  to  counteract  or  explain 
why  the  mortgage  was  given  for  so 
large  a  Bum,  after  one-fourth  of  the 
debtor's  entire  assets  had  been  taken 
from    In-    business    in    the    manner 

Stated,  and   under   circumstances   cal- 


culated to  show  an  intent  to  put  a 
portion  of  his  available  means  beyond 
the  reach  of  his  creditors,  and  arrive 
at  the  conclusion  that  the  assignment 
was  fraudulent  and  void. 

Shultz  v.  Hoagland,  85  N.  Y.  464  ; 
Hardmann  v.  Bowen,  39  N.  Y.  200. 

2  Baer  v.  Rooks.  50  Fed.  Rep.  901  ; 
Emerson  v.  Senter,  118  U.  S.  3,  6  S. 
C.  Rep.  981. 

3  See  Thomas  v.  Talmadge,  16  Ohio 
St.  433:  Governor  v.  Campbell,  17 
Ala.  566  ;  Byrne  v.  Becker,  42  Mo. 
264;  Abercrombie  v.  Bradford,  16 
Ala.  ."WO  ;  State  v.  Keeler,  I!)  Mo.  548  ; 
Wise  v.  Wimer.  23  Mo  237;  Mandel 
v.  Peay,  20  Ark.  329:  Penn's  Execu- 
tor v.  Penn,  88  Va.  361.  13  S.  E.  Rep. 
7* » 7  :  Zell  Guano  Co.  v.  Heatherly. 
38  W.  Ya.  410,  18  S.  E.  Rep.  611  : 
Porter  v.  James,  30  U.  S.  App.  260; 
Pettit  v.  Parsons,  9  Utah  223,  33  Pac. 
Rep.  1038:  Peters  v.  Bain,  133  U.  S. 
670,  Ut  S.  ('.  Rep.  354.  See  Emerson  v. 
Scute,-.  118  U.   S.    3,    10,   6  S.  C.  Rep. 

'.  S|,  where  the  court  says  :  "It  the 
intentional  omission  by  the  grantor 
of  certain  property  from  his  schedule, 
and  his  appropriation  of  it  to  his  own 
Use,  was  such  a  fraud  as  wotdd  vitiate 

the     deed     where      the    assi^ne ■    the 

preferred  creditors  have  previous 
notice  of  E.uch  omission,  that  result 
cannot  happen  when  they  were  igno- 
rant of  the  fraud  at  t he  time  they  ac- 
cepted the  benefit  of  the  conveyance." 
1  Forbes  v.  Waller,  25  N.  Y  48». 
Sec  g  205.     While  it  is  proper  to  allow 


§3[9  INTENT  AFFECTING    ASSIGNMENTS.  559 

where  discussed,  that  a  voluntary  conveyance  or  gift  may 
be  annulled  at  the  instigation  of  creditors,  without  proof 
of  an  absolute  fraudulent  intent  on  the  part  of  the  donee,1 
it  would  seem  to  follow  by  analogy  that  the  cases  which 
hold  that  proof  of  the  fraudulent  intent  of  the  debtor  or 
assignor  is  sufficient,  establish  the  more  logical  and  salu- 
tary rule.  In  a  case  which  arose  in  New  York  it  was 
expressly  decided  that  an  assignment  by  a  debtor,  with 
the  intent  to  hinder  or  defraud  creditors,  may  be  avoided 
although  the  assignees  were  free  from  all  imputation  of 
participation  in  the  fraudulent  design,  and  were  them- 
selves bona  fide  creditors  of  the  assignor.'-'  In  Loos  v. 
Wilkinson,3  Earl,  J.,  said:  "An  innocent  assignee  may 
not  be  permitted  to  act  under  a  fraudulent  assignment. 
....  It  may  be  true  that  in  a  particular  case  an  honest 
assignee  may  ....  undo  all  the  fraudulent  acts  of  the 
assignor  preceding  and  attending  the  assignment  and  the 
preparation  of  the  schedules  under  it.  Yet,  if  the  assign- 
ment was  made  by  the  assignor  with  the  fraudulent  intent 
condemned  by  the  statute,  the  assignment  may  be  set 
aside  at  the  suit  of  judgment-creditors,  and  all  powers  of 
the  assignee,  however  honest  he  may  be,  taken  away. 
In  assailing  a  voluntary  assignment  for  the  benefit  of 
creditors,  it  is  important  only  to  establish   the  fraudulent 


parties  to  testify  as  to  their  intentions,  ticipation  in  the  fraud  intended  by  the 

yet  as  against  third  parties  in  aeon-  assignor.     The  uprightness  of  his  in- 

troversy  as  to  whether  a  paper  is  an  tentions,   therefore,   will    not    uphold 

assignment  or  a  mortgage,  they  can-  the  instrument,  if  it  would  others  ise, 

not  be  allowed  to  testify  as  to  what  for  any  reason,  be  adjudged  fraudu- 

they  had    in   mind  in  executing  the  lent  and  void."   Griffin  v.  Marquardt, 

paper.      Appolos   v.    Brady,   49  Fed.  17  N.  Y.  30.     See  Loos  v    Wilkinson. 

Rep.  401.  110  N.  Y.  L95,  is  X.  E.  Rep.  99  ;  Starin 

■See  §200.  v.  Kelly,  88  N.  Y.  418,  and  compare 

*Rathbun  v.  Plainer,  18  Barb.  (N.  Sipe  v.  Earman,  26  Gratt.  (V&.)  570. 
Y.)  '272.     "An  assignee  in  trust  for         :;  110  N.    Y.   209,    is  X.    K.    Rep.  99. 

the  benefit  of  creditors  is  not  '  a  pur-  Sees.  C.  again  113  N.  Y.  485,  '.'1  N.  E. 

chaser  for  a  valuable  consideration,'  Rep.  392. 
however  innocent  lie  may  be  of  par- 


560  RIGHTS   OF   ASSIGNEE.  §  319a 

intent  of  the  assignor,1  and  when  that  has  been  established 
the  assignment  may  be  set  aside,  and  creditors  may  then 
pursue  their  remedies  and  procure  satisfaction  of  their 
judgments  as  if  the  assignment  had  not  been  made." 
Mere  suspicion  of  a  fraudulent  intent  is  not  enough  to 
sustain  an  action  to  set  aside  an  assignment.2 

There  should  be  evolved  from  the  decisions  a  distinc- 
tion between  cases  where  the  assignee  is  honest  and  where 
he  has  been  guilty  of  bad  faith.  Where  the  trust  estate 
has  come  into  the  hands  of  an  honest  assignee,  the  reasons 
upon  which  it  may  be  overturned  should  be  restricted. 
The  technical  grounds  of  assault  upon  this  convenient 
form  of  liquidating  an  insolvent  estate  should  be  circum- 
scribed, and  the  struggles  of  sharp  attorneys  to  gain 
preferences  for  unconscionable  clients  by  overturning 
these  transfers  on  unsubstantial  grounds  should  be 
repressed.  The  guiding  consideration  with  the  courts 
should  be  the  general  welfare  of  the  body  of  creditors 
and  the  safety  of  the  assets. 

§  319a.  Rights  of  assignee  —  An  assignee  acting  in  per- 
fect good  faith  under  an  assignment,  subsequently  declared 
fraudulent,  will  be  protected  from  personal  liability,3  and 
need  not  account  a  second  time  for  moneys  paid  out  in 
good  faith  to  creditors.4  The  assignee  is  not  necessarily 
bound  to  take  goods  ordered  by  the  assignor,5  and  is 
without   power  to   proceed  with   the   performance  of  the 


1  Citing  St.irin   v.   Kelly,  88  N.  Y.  Y.  397,  22  N.  E.   Rep.  1031  :  Smith  v. 

H8.  Wis...  132  N.  V.  172,  30  N.  E.  Rep.  :i*4  : 

McClure   v.   Goodenough,    19  Civ.  Wilson  v.  Marion.   147  X.   Y.  589,  42 

Pro.  (N.  V.    191,  12  N.  Y.  Supp.  459.  N.  E.  Rep.  190. 

Rouse  v    Bowers,  108  N.  C.  182,  12  'Sullivan  v.  Miller,   106  N.   Y.   643, 

S     1:.    Rep    985:    Burrill    on    Assign-  13    X.     E.    Rep.   772;    Wakeman    v. 

in.  nt-,  f.ii,  ed.,  |>.  567,  Baydock  Car-  Grover,  4  Paige  (X.  Y.)  28;  Young  v. 

Co.  v    Pier,  7*   Wis.    aTii,  47   X.  Brush,  28  X.    V.  t;71  ;   Ames  v.  Blunt, 

\V.    Rep.    945;    Barney    v.    Griffin,  4  5  Paige  (N.  Y.)  13. 

s. m. It     Ch.    1  X.    Y.i   552;  Hawlej  \  'Compare   ''lark   v.    Dickinson,    74 

.Ian,.-,   if.  Wend.    iN.  Y.i  182;    Nat.  X.  Y.  17. 
Butchers  &  It.  I'.k.  v.  Hnl.li.4l.  117  X. 


§  319a  RIGHTS    01      ASSIGNEE.  561 

assignor's  incomplete  contracts,  yet  if  he  does  so  without 
the  sanction  of  the  court,  or  the  parties  beneficially  inter- 
ested, and  sues  for  such  performance,  the  defendant  may 
counterclaim  damages.1  For  the  purposes  of  completing 
such  a  contract,  the  matter  must  be  treated  as  a  transaction 
had  with  the  assignee  as  an  individual.2  It  may  be  further 
recalled  that  goods  obtained  by  the  assignor  by  the  prac- 
tice of  fraud  may  be  taken  from  the  assignee,  as  the  lat- 
ter does  not,  according  to  the  weight  of  authority,  occupy 
the  position  of  a  purchaser  for  value.3  But  demand  for 
such  goods  should  precede  any  action  to  recover  them 
from  an  innocent  assignee.4 

The  obligations  of  an  assignee  for  the  benefit  of  cred- 
itors are  those  which  appertain  to  voluntary  trustees,  not 
acting  gratuitously,  without  compensation.  They  are 
bound  to  exercise  that  degree  of  diligence  which  persons 
of  ordinary  prudence  are  accustomed  to  use  in  their  own 
affairs.5  The  trust  fund  should  not  be  used  for  the  indi- 
vidual benefit  of  the  assignee,  or  mingled  with  other 
money,6  or  expended  except  for  the  care  of  the  property 
and  its  conversion  into  cash."  Where  the  assignee  is  a 
party  to  the  fraud  which  results  in  overturning  an  assign- 
ment, he  will  not  be  allowed  for  expenses  incurred  in 
defending     himself8    or    commissions.9      The     assignee 


'Patton  v.  Royal   Baking   Powder  777:     Nat.     Butchers    and     Drovers' 

Co..  114  X.  Y.  1,  20  N.  E.  Rep.  631.  Bank  v.  Hubbell,  117  N     Y.  384,  398, 

'Patton  v.  Royal   Baking  Powder  22  X.  E.  Rep.  10:31. 

Co.,  114  X.   Y.   5,  20  N.  E.  Rep.  621.  5  Matter  of  Cornell,   110  X.    V 

See  Thompson  v.  AYhitmarsh.  100  X.  is   X.    E.   Rep.    142.     See    Matter    of 

Y.  35,  2  X.  E.  Rep.  -273.  Buckland  v.  Barnes,   140  X.  Y.  488,  35  X.  E.  Rep. 

Gallup,  105  N.  Y.  453.  11  X.  E.  Rep.  653. 

843.  5Matter  <>f  Barnes.    140  X.    V.    W8, 

3  See  Raymond  v.   Richmond.  7*  X.  35  X.  E.  Rep.  653. 

Y.  351  ;  Chaffee  v.  Fort,  2  Lans.  (N.  '•  Matter  of  Dean.  86  X    7.  398. 

Y.)81.  -Smith  v    Wise,  132  X.  Y.  172.  30  X. 

4  Good  win  v.  Wertheim^r.  99  X.  Y.  E.  Rep.  229. 

I    X.  E.    Rep.  404;  Converse  v.  »Slingluff    v.  Smith.  7'.  Ml 

Sickles,  140  X.   Y.  207,  40  X.  E   Rep.  Atl.  Rep.  674 

36 


562 


PARTNERSHIP    ASSIGNMENTS. 


3I9b 


takes  the  debts  or  choses  in  action  subject  to  the  right  of 
set-off.1  The  equitable  rule  as  to  set-off  may  also  be 
compelled  against  the  assignee.2  Where  several  persons 
accept  the  trust  they  must  act  together.3 

§  319b.  Partnership  assignments. —The  distinction  be- 
tween individual  and  copartnership  creditors  must  be 
preserved,4  especially  where  the  possibility  of  an  attempt 
to  pay  individual  creditors  with  partnership  assets  is 
present.5  In  some  cases  it  is  declared  absolutely  that  a 
transfer  of  partnership  property  to  an  individual  creditor 
of  one  of  the  partners  when  the  firm  is  insolvent  is  fraud- 
ulent as  to  partnership  creditors,6  but  it  seems  the  con- 
verse of  the  proposition  is  not  true,"  for  an  assignment 
of  individual  assets  for  the  benefit  of  firm  creditors  will 
usually  be  upheld.8  Evidently  the  theory  upon  which  the 
cases  proceed  is  that  the  appropriation  of  firm  assets  to 
individual  debts  is  a  fraud  upon  the  partner  who  does  not 
owe  the  debt,  and  also  violates  the  equitable  rule  as  to  the 
marshalling  of  assets.     The  solvency  of  the  partnership  is 


1  Jordan  v.  Nat.  Shoe  and  Leather 
Bank.  74  X.  V.  471  :  Martin  v.  Kunz- 
muller,  ■!?  X.  V.  396;  Myers  v.  Davis, 
■2 -J  X.   Y.489. 

*See  Bughitt  v.  Hayes,  136  X.  V. 
L63,  32  X.  E.  Rep.  706.  Compare 
Fera  v.  Wickham,  1:;."")  X.  Y.  223,  31 
\    I.    Rep.  1028. 

Thatcher  v.  Candee,  1  A.bb.  Dec. 
N    ST.)  387  ;   Anon.  v.  Gelpcke,  5  Hun 
(  X.  Y.  I  245,  255  :  Brennan  v.  Willsdn, 
•1  Abb.  X.  ('.  (X.  Y.)  279. 

■  Peters  v.  Bain,  133  U.  S.  670,  10 
s.  < '.  Rep.  354  :  Nordlinger  v  Ander- 
son, L23  N.  V.  .-.II.  25  N.  E.  Rep. 
992. 

v.  Hume,  72   Hun  (X.  Y.)  I, 

25  N    Y.  Su|)|».    576;    Wilson   v.   Rob- 

ertson,  21  N.  Y.  587  ;  I',. pons  v.  Marion, 

Y.    541,    '-".1    N.    E.  Rep.  832  ; 


Lord  v.  Devendorf ,  r,4  Wis.  495,  11  N. 
W.  Rep.  903. 

6  Erb  v.  West  (.Miss.)  1!)  So.  Red 
829:  Hill  v.  Draper,  54  Ark.  395.  15 
S.  W.  Rep.  1025;  .Marks  v.  Bradley, 
il'.i  Miss.  1.  10  So.  Rep.  922;  Nord- 
linger v.  Anderson,  12:;  X.  Y.  5 is. 
25  N.  E.  Rep.  992:  Wilson  v.  Rob- 
ertson, 21  N.  Y.  587. 

'Crook  v.  Rindskopf,  105  N.  Y. 
176,  12  X.  E.  Rep.  Ill  :  Saunders  v. 
Reilly,    105   X.    Y.    12.  12  X.   E.   Rep 

170;   Rover    Wl 1  Co.    v.     Fielding, 

101    X.  Y.   504,  5  N.  E.  Rep.    131. 

•  Crook  v.  Rindskopf,  105  N.  Y. 
476,  12  N.  E.  hep.  174  :  Erb  v.  Wesl 
(Miss.)  p.)  So.  Rep.  829;  co/itra  .lack- 
son  v.  (  'ornell,  1  Sandf.  Ch.  (N.  Y.) 
348.  See  O'Neil  v.  Salmon,  25  How. 
I'r.  (.V  Y.)  246. 


3i9b 


PARTNERSHIP    ASSIGNMENTS. 


563 


an  issuable  fact  l  in  insolvency  cases.  The  court  will 
resent  schemes  to  defraud  a  firm's  creditors.'  On  the  other 
hand,  firm  creditors  cannot  set  aside  as  fraudulent  a  vol- 
untary transfer  of  property  of  an  individual  partner  unless 
the  firm  assets  are  deficient  and  there  are  no  individual 
creditors.3  The  respective  powers  of  the  partners  in 
assignment  cases  have  been  a  subject  of  much  con- 
troversy. Only  leading  characteristics  will  be  noticed. 
An  insolvent  surviving  partner  may  make  an  assignment 
embracing  both  partnership 4  and  his  individual  prop- 
erty.5 In  Illinois,  in  the  absence  of  proof  of  a  crisis  in 
the  affairs  of  the  firm,  two  general  partners  cannot  make 
an  assignment  in  the  absence  of  the  assent  of  the  third 
partner.6  Ordinarily  the  partners  must  all  join  in  an 
assignment."  A  special  partner  need  not  unite,8  nor  a 
party  who  may  possibly  be  liable  as  a  partner  as  regards 
third  parties.9  A  limited  partnership  cannot  in  New 
York  assign  with  preferences.10  A  partner  has  no  right 
to  make  a  general  assignment  because  his  copartner  is 


1  McDonald  v.  Cash.  45  Mo.  App. 
66. 

5  Kelley  v.  Flory,  84  Iowa  671,51  N. 
W.  Rep.  181  ;  Smith  v.  Smith,  87  Iowa 
93,  54  X.  W.  Rep.  73  :  Baer  v.  Wil- 
kinson, 35  W.  Va.  422, 14  S.  E.  Rep.  1  ; 
Roe  v.  Hume,  72  Hun  (X.  Y.)  1,  25  X. 
Y.  Supp.  576  :  Booss  v.  Marion,  129  X. 
Y.  536  ;  29  N.  E.  Rep.  832  ;  Dura  11 1  v. 
Pierson,  124  X.  Y.  444.  26  X.  E.  Rep. 
1095  ;  Xordlinger  v.  Anderson,  123  X. 
Y.  544,  25  X.  E.  Rep.  992  ;  Wilson  v. 
Robertson,  21  X.  Y.  587. 

3  Hull  v.  Deering,  80  Md.  424,  31 
Atl.  Rep.  416. 

4  McFarland  v.  Bate.  45  Kan.  7,  25 
Pac.  Rep.  238. 

5  Hanson  v.  Metcalf,  46  Minn.  25. 
48  X.  W.  Rep.  441  ;  Riley  v  Carter, 
76  Md.  581,  25  Atl.  Rep.  667  ;  Williams 
v.  Whedon,  109  X.  Y.  333,  Hi  X.  E. 
Rep.  365;  Haynes  v.  Brooks,   116  X. 


Yr.  487,  22  X.  E.  Rep.  1083  :  Emerson 
v.  Seuter,  118  U.  S.  3.  6  S.  C.  Rep.  981  ; 
Durant  v.  Pierson.  124  X.  Y.  452, 
26  X.  E.  Rep.  1095  :  Beste  v.  I 
17  Abb.  X.  C.  (X.  Y.)  162,  affi'd  110 
X.  Y.  644.  17  X.  E.  Rep.  734. 

'  Trumbull  v.    Union  Trust  I 
111.  App.  319. 

:  Kellogg  v.  Cayce,  84  Tex.  213. 
lit  S.  W.  Rep.  388  ;  Fox  v.  Curtis.  176 
Pa.  St.  52.  34  Atl.  Rep.  952;  Welles  v. 
March,  30  X.  Y.  350;  Klumpp  v. 
Gardner,  ill  X".  Y.  158,21  X.  E.  Rep. 
99;  Gates  v.   Andrews,  37  X    Y.  659. 

BTracy  v.  Tuffey,  134  U.  S.  200,  10 
s.  C.  Rep.  527. 

9  See  Adee  v.  Cornell.  93  X.  Y  572, 
affi'g25Hun  (X.  Y     > 

hwartz    v.   Soutter,    103   X.    V. 
683,  0  X.  E.   Rep.  448.     s.  • 
Grant,  97  X.  Y.  263 


564 


IK  \WI>. 


§  320 


temporarily  insane.1  But  where  one  partner  absconds 
those  remaining-  may  assign  for  the  benefit  of  creditors.2 
And  where  after  dissolution  the  firm  assets  have  been 
transferred  in  good  faith  to  one  of  the  late  partners  as 
an  individual,  he  may  assign  for  the  benefit  of  his 
individual  creditors.''  The  omission  to  convey  indi- 
vidual property  in  a  partnership  assignment  may 
invalidate  the  instrument,1  though  this  conclusion  has 
been  denied.5  The  certificate  of  acknowledgment  of  an 
assignment  executed  by  one  member  of  a  firm  need  not 
state  that  the  partner  was  authorized  to  sign  his  co- 
partners' names  to  the  instrument.  The  assignment  will 
be  upheld  if  in  fact  he  had  such  authority/'  Oral 
assent  of  the  non-joining  partners  is  good.7  The  assent 
may  be  shown  in  a  variety  of  ways.8 

>J  320.  Fraud  must  relate  to  instrument  itself.  — Where  it 
is  sought  to  annul  a  fraudulent  transfer,  the  evidence 
must  ascertain  and  establish  the  assignor's  intent  at  the 
time0  of  the  execution  of  the  instrument.10     If  the  assicrn- 


1  Stadelman  v.  Loehr,  47  Hun  (N. 
Y.)  327:  Friedburgher  v.  Jaberg,  20 
AM,.  N.  C.  (N.  Y.)  279. 

2  Welles  v.  March,  HO  N.  Y.  344  ; 
National  Bank  of  Balto.  v.  Sackett, 
2  Daly  >X.  Y.)  395;  Palmer  v.  My- 
ers, 13  Hail,.  iX.  Y.  509;  Kelly  v. 
Baker,  2  Hilt.  (X.  Y.)  531.  See 
Khun])])  \.  Gardner.  114  N.  Y.  153, 
21  X.  E.  Rep.  9.1. 

3  See  Dimon   v.   Hazard,   32   N.  Y. 

65  :  Stanton    v.    Westover,   101  X.  V. 
265,  I  X.  E.  Rep  529. 

Kennedy  v.  McKee,  I  12  r.  S. 
606,   12  s.  C.  Rep.  303  ;  Still  v.  Fooke, 

66  Tex.   715,  2  s.  W.  Rep.  59  ;  Coffin 
v.  Douglas,  61  Tex.  106,  107. 

Bradley  v.  Bischel,  81  [owa  80,  46 
X.  w.  Rep.  755  ;  McFarland  w  Bate, 
45  Kan    I,  25  Pac.  Rep.  238. 

Hooper  \  Baillie,  1 18  X.  5  .  U3, 
H6     -•■;  X.    E.  Rep,  569  .  Klumpp  v. 


Garduer,  114  N.  Y.  160,  21  X.  E.  Rep. 
99  ;  National  Bank  of  Troy  v.  Scriven, 
63  Hun  (N.  Y.)  375,  is  X.  Y.  Supp. 
277. 

'Hooper  v.  Baillie.  118  N.  Y.  ID'., 
23  X.  E.  Rep.  569.  See  Sullivan  v. 
Smith,  15  Neb.  476,  19  X.  \Y.  Rep. 
620;  Rumery  v.  McCulloch,  54  Wis. 
565,  12  N.  W.  Rep.  65. 

•Klumpp  v.  Gardner,  114  X.  Y. 
157.  21  X.   E.  Rep.  99. 

'Cuyler  v.  McCartney.  40  X.  Y. 
221;  Olney  v.  Tanner,  10  Fed.  Rep.  115. 

"  Shultz  v.  Hoagland,  85  X.  Y.  467  : 
Mathews  v.  Poultney,  33  Barb.  (N. 
Y.)  127;  Beck  v.  Parker.  65  Pa.  St. 
262;  Bailey  v.  Mills,  27  Tex.  434-438; 
Cornish  v.  Dews,  18  Ark.  172;  Klapp 
v      Shirk.    13    Pa.    St.    589;    Owen    v. 

Aivis.  ■!<;  \   .1.  Law22;   Hill  v.  W 1- 

berry,  1  C.  C.  A.  206,  49  Fed.  Rep. 
138. 


§  32°  FRAUD.  565 

merit  was  valid  in  its  creation,  having  been  honestly  and 
properly  executed  and  delivered,  no  subsequent  illegal 
acts,  either  of  omission  or  commission,  can  in  any  man- 
ner invalidate  it.1  The  subsequent  acts  should,  however, 
be  considered,  as  they  "may  reflect  light  back  upon  the 
original  intent,"  and  help  to  characterize  and  discern  it 
more  correctly/  It  may  be  observed  that  neither 
conveyances  without  consideration,  nor  other  frauds  com- 
mitted by  a  failing  debtor  prior  to  a  general  assignment 
for  the  benefit  of  his  creditors,  will  operate  to  make  it 
void  as  matter  of  law.  These  are  circumstances  which 
may  be  taken  into  consideration  by  a  court  and  jury,  if 
nearly  contemporaneous,  but  are  not  conclusive  of  a 
fraudulent  intent.3  To  render  the  assignment  invalid, 
when  good  on  its  face,  the  fact  of  a  fraudulent  intent  in 
making  it  must  be  legitimately  found  from  evidence  that 
will  fairly  support  the  finding,  and  it  must  also  be  an 
intent  to  commit  a  fraud  on  creditors  by  making-  the 
assignment,  and  not  by  some  entirely  iudepe?ident  act 
which  might  and  probably  would  have  been  done  precisely 
as  it  was,  had  no  assignment  been  made  or  contemplated.4 


1  Hardmaiin    v.    Bowen,   39   N.   Y.  for  its  recovery,  and,  if  successful,  it 

200  ;  English   v.   Friedman,    70  Miss.  will  be  for  the  benefit  of  the  creditors 

457,    12   So.    Rep.    252.       In    Estes   v.  precisely  as  if  it  had  been  included  in 

Gunter,   122  IT.   S.   455,   7  S.  C.  Rep.  the  assignment." 

1275,  the  court  says:      "The  assign-  -  Shultz  v.  Hoagland,  85  N.  Y.  468; 

ment  was  subsequent  to  the  deed  and  McNaney  v.  Hall,  80  Hun  (X.  V. )  415, 

carried  all  that  could  in  any  way  be  33  N.  Y.  Supp.  518. 

considered  as  a  benefit  secured  by  the  3  Livermore    v.  Northrup,  44  X.  Y. 

deed  to  the  assignor.     The  creditors  111;  Probsl  \.  Welden,  4(i  Ark.  ins 

were    not,    therefore,    in    any    way  4  Wilson  v.  Forsyth,  24  Barb    X.  Y.  > 

hindered  or  defrauded  by  the  alleged  12S.       In     Aaronson    v.    Deutsch,    24 

reservation.       There    is    nothing     in  Fed.  Rep.  166,  the  court  said  :     "The 

Gunter's  payment  to  his  wife  of  the  rule   which    the   defendant    seeks    in 

),  which  can  affect  the  validity  of  invoke,  thai  a  deed  valid  in  its  incep- 


the   assignment.    .    .    .    .    A    fraudu-  tion  will   not    lie   rendered   invalid  \<\ 

lent  disposition  of  property  does  not  any  subsequent   fraudulent  or  illegal 

of  itself  impair  a  subsequent  general  act  of  the  parties,  has  no  application 

assignment.     The  assignee  may  sue  where  the  fraudulent  or  illegal  art  is 


566  FRAUD.  §  320 

A  fraudulent  disposition  of  property  invalidates  a  subse- 
quent assignment  only  when  the  deed  is  actually  part  of 
a  scheme  to  defraud  creditors.1  Proof  of  an  intentional 
omission  from  the  schedules  of  assigned  property,  of 
items  of  valuable  property,  is  sufficient  to  establish  a 
fraudulent  intent.  Referring  to  this  subject,  Finch,  J., 
said  :  "  The  intentional  omission,  calculated  to  deceive, 
and  to  lull  into  slumber  and  inactivity  the  interest  and 
diligence  of  the  creditor,  would  plainly  argue  a  fraudu- 
lent purpose  Not  so,  however,  if  shown  to  have  been 
unintentional,  and  the  result  of  accident  or  oversight.  It 
would  be  hard  to  find  any  schedules  absolutely  perfect, 
or  any  debtor  who  could  inventory  every  item  of  his 
property  with  strict  accuracy.  Room  must  be  allowed 
for  honest  mistake,  and  possibly  even  for  careless  and 
thoughtless  error;  but,  where  the  omission  cannot  thus 
be  explained  or  excused,  the  inference  of  a  fraudulent 
intent  must  follow."2  Preferring  fictitious  claims  will 
constitute  a  ground  for  attacking  an  assignment  on  the 
ground  of  fraud.3  The  motive  to  prevent  creditors  from 
gaining  a  preference  will  of  course  not  avoid  the  assign- 
ment.4 It  may  be  here  remarked  that  if  an  assignment 
is  made  in  the  form  and  manner  provided  by  law,  and 
duly  recorded  so  as  to  pass  all  the  property  of  the 
assignor,  it  is  difficult  to  see  how  the  motive  existing  in 
the  assignor's  mind  can  affect  its  validity.  If  in  morals 
the  motive  be  a  bad  one,  yet  in  law  it  produces  no  for- 
bidden result.  In  so  far  as  it  hinders  or  delays  creditors 
it  is  a  lawful   hindrance   and   delay,  and   cannot  be  held 


the  consummation  of  an  illegal  agree-  Sec  Baird  v.  Mayor,  etc.,  of  N.  Y.,  90 

men!   made  contemporaneously  with  N.    Y.  593.    Beardsley  v.  Frame,  s"> 

tli.'  deed."  <  Sal  134,  24  Pac.  Rep.  721 . 

Hill  v.  Woodbury,  l  C    C.  A    306,  Roberta   v.  Vietor,  130  N.  V.  586, 

49   Fed.   Rep.    138;  Baer  v.   Rooks,  2  29  N.  E.  Rep.  1025. 
C.  C   A..  76,  50  Fed.  Rep.  898.  k  See  §  341.     Borwitz   v.    Ellinger, 

Shultz  i    Eoagland,  85  N.  t  .  169.  33  M<l.  504. 


§§  32I,   322  GOOD    FAITH.  567 

fraudulent.  The  commission  of  a  lawful  act  is  not  made 
unlawful  by  the  fact  that  it  proceeded  from  a  malicious 
motive.1 

§321.  Good  faith.  —  The  term  "good  faith,"-  if  inter- 
preted to  mean  "  sincerity  or  honesty  of  purpose,'1  can 
scarcely  be  applied  in  that  sense  to  voluntary  assign- 
ments, for  these  instruments  are  often  annulled  from  con- 
siderations of  public  policy  in  cases  where  nothing  was 
more  foreign  to  the  intention  of  the  debtor  than  a  dis- 
honest design  considered  as  an  emotion.  The  usual  pre- 
sumption of  honesty  and  good  faith  incident  to  acts  and 
transactions  generally,3  appertains  to  a  voluntary  assign- 
ment, and  the  instrument  will  be  upheld  where  the  lan- 
guage contained  in  it  justifies  a  construction  which  will 
support  it.4  A  mere  mistake  in  the  making  of  the  inven- 
tory will  not  invalidate  an  assignment.5 

§  322.  Void  on  its  face.  —  An  assignment  for  the  benefit 
of  creditors  may  undoubtedly  contain  a  clause  so  plainly 
indicative  of  the  fraudulent  intent  pointed  out  by  the 
statute,  or  recognized  by  the  policy  of  the  law,  ''  as  to 
carry  its  death-wound  upon  its  face."  An  instance  of  this 
might  be  a  gratuitous  provision  out  of  the  assigned  prop- 
erty for  the  insolvent  assignor  or  his  family.0      The  New 


1  Wilson  v.  Berg,    88  Pa.    St.    172,  6  Roberts  v.  Buckley,  115  N.  Y.  315, 

1    Am.    lnsolv.   Rep.    109  ;   Jenkins   v.  39  N.  E.  Rep.  9GG. 

Fouler,    24   Pa.   St.    3')8  ;    Fowler   v.  6  Nightingale   v.  Harris,  6  R.  I.  329 ; 

Jenkins,  28  Pa.  St.  176;  Glendon  Iron  criticised  in  Gardner  v.  Commercial 

Co.  v.  Uhler,  75  Pa.    St.   467;  Smith  Nat.  Bank,   13  R.    1.    155.     Danforth, 

v.  Johnson,  76  Pa.  St.  191.  J.,  said,   in  McConnell  v.  Sherwood. 

•  See  Wood    v.   Conrad,   2  S.  Dak.  84  N.  Y.  526:  '■  Where,  upon  the  face 

334,  50  N.  W.  Rep.  95.  of  an  assignment  or  by  proof  aliunde, 

3  See  §§5,  6,  224,  271.  it  appears  to  have  been  made  with  in- 

4  Tovvnsend    v.    Stearns,    32    N.   Y.  tent  to  hinder   <>r   delay  creditor-,  it 
209,   218;    Brainerd    v.    Dunning.    :!<>  affords  no  protection  to  the  a  — 1. 

N.  Y.  211  ;  Campbell  v.  Woodworth,  against  a  sheriff,  who  seeks  to  enforce 

24  N.  Y.  304;  Shultz  v.  Hoagland,  85  by  execution  a  judgment  against  the 

N.  Y.  464  ;  Coyne  v.  Weaver,  84  N.  Y.  debtor." 
386,  and  cases  cited  . 


POWER   TO    REFORM.  §  322a 

York  cases  clearly  establish  the  rule  that  where  the 
assignment  shows  upon  its  face  that  it  must  necessarily 
have  the  effect  of  hindering  and  defrauding  the  creditors 
of  the  assignor,  it  is  conclusive  evidence  of  a  fraudulent 
intent,  and  may  be  avoided.1  The  actual  motive,  emotion 
or  belief  of  the  debtor  in  such  cases  is  immaterial. 
Where  it  is  apparent  from  the  face  of  the  instrument 
itself  that  it  is  a  conveyance  to  the  use  of  the  assignor, 
it  is  the  duty  of  the  court  trying  the  cause  to  tell  the 
jury,  as  a  matter  of  law,  that  the  conveyance  is  fraudulent 
as  against  creditors.'3  In  the  case  of  Dunham  v.  Water- 
man,3 Mr.  Justice  Selden,  referring  to  the  opinion  of  the 
Court  of  Errors,  in  Cunningham  v.  Freeborn,4  remarked  : 
"  It  follows  from  the  reasoning  of  Mr.  Justice  Nelson, 
which  I  regard  as  unanswerable,  that  wherever  an  assign- 
ment contains  provisions  which  are  calculated  per  se  to 
hinder,  delay  or  defraud  creditors,  although  the  fraud 
must  be  passed  upon  as  a  question  of  fact,  it  nevertheless 
becomes  the  duty  of  the  court  to  set  aside  the  finding,  if 
in  opposition  to  the  plain  inference  to  be  drawn  from  the 
face  of  the  instrument.  A  party  must  in  all  cases  be  held 
to  have  intended  that  which  is  the  necessary  consequence 
of  his  acts."  5 

§  322a.  Power  to  reform.  —  It  seems  clear  on  principle 
and  authority  that  an  assignment  void  on  its  face  cannot 
be  reformed  by  an  action  so  as  to  cut  off  a  lien  of  a 
judgment   recovered    after  the  execution    of    the    illegal 


Kavanagh  v.  Beckwith,  44  Barb.  s.  p.  Bigelow  v.  Stringer,  40  Mo.  205, 

(N.    Y  i  Vxi  :  Goodrich    v.    Downs,  6  and  cases  cited . 

Hill  (N.  Y.)    lis     See   Wakeman    v.  *  Bigelow  v.  Stringer,  40  Mo.  205. 

Dalley,  44  Barb.  (N   V.  1  503,  affi'd  51  » 17  N.  Y.  9,  21. 

N.  V.  27  :  Griffin  v.  Marquardt,  21  N.  *  11  Wend.  (N.  Y.)  840-351. 

Y   121  ;  Coleman  v.  Burr,  93  X.  Y.  81.  See  opinion   of  Ingraham,  J.,  in 

See  Marks  v.   Bradley,  69  Miss.  1,  10  Wakeman  v.  Dalley,  44  Barb.  (N.  Y.i 

Rep  922:  Weis  v.  Dittman,  4  Tex.  503;  Gere    v.    .Murray,  6    Minn.    305. 

Civ.  A 1  -i ..  35,  28  S.  W.  Hep.  229  ;  Rilev  See  §§  9,  lo. 
v    1  larter,  76  Bid.  581,  25  Ail.  R<  p.  667; 


§§  322b,  323      PURCHASER    UNDER    VOID    ASSIGNMENT. 

assignmen  tand  before  its  reformation.1  A  clerical  error 
in  an  assignment  where  the  true  meaning  of  the  instrument 
cannot  be  doubted  will  not  avoid  it,  and  no  reformation 
is  essential.2 

§  322b.  Purchaser  under  void  assignment.  —  An  assignee 
under  an  assignment  that  might  be  declared  fraudulent 
and  void  as  to  creditors  may  nevertheless  convey  a 
good  title  to  a  purchaser  for  valuable  consideration  who 
had  no  notice  of  the  fraud  of  the  assignor.3  As  else- 
where shown,  an  assignee  will  be  protected,  as  regards 
acts  done  in  good  faith,  before  any  other  creditor  has 
secured  a  lien.4 

§323.  Constructive  frauds  denned  by  Story — "By  con- 
structive frauds,"  observes  Mr,  Justice  Story,  "are  meant 
such  acts  or  contracts  as,  although  not  originating  in  any 
actual  evil  design  or  contrivance  to  perpetrate  a  positive 
fraud  or  injury  upon  other  persons,  are  yet,  by  their  tend- 
ency to  deceive  or  mislead  other  persons,  or  to  violate 
private  or  public  confidence,  or  to  impair  or  injure  the 
public  interests,  deemed  equally  reprehensible  with  posi- 
tive fraud,  and  therefore  are  prohibited  by  law,  as  within 
the  same  reason  and  mischief  as  acts  and  contracts  done 
malo  animo"*  Again  the  commentator  says:  "Another 
class  of  constructive  frauds  upon  the  rights,  interests,  or 
duties  of  third  persons,  embraces  all  those  agreements 
and  other  acts  of  parties,  which  operate  directly  or  virtually 
to    delay,   defraud,  or    deceive   creditors.      Of  course   we 


'Sutherland  v.  Bradner.  116  N.  Y.  2  Smith  v.   Bellows,  3   N.  Y.    State 
410,  416,  22  N.  E.  Rep.  554  ;  Whitaker  Rep.     305.      Compare     Fairchild     v. 
v.  Gavit.  18  Conn.   522;  Whitaker  v.  Lynch ,-42  N.  Y.  Super.  .265. 
Williams,   20  Conn.   98;    Farrow    \.  Wilson   v.  Marion,    117    N.  Y.  589, 
Hayes,   51   Md.    504.     In  Van  Winkle  42  N.  E.  Rep.  190. 
v.  Armstrong,  41  N.  J.  Eq.  402,  5  Atl.  *  Nat.    Butchers' <S    D.    Bk.  v.  Hub- 
Rep.  449.  -i  bill  was  filed  to  rectify  an  bell,  117  N.  Y.  397,  22  N.  E.  Rep.  1081. 
assignment  by  inserting  words  of  in-  See  §  319a. 
heritance  therein.     The  suit  was  be-  5  1  Story's  Eq.  Jur.  r  358 
fore  the  court  on  motion. 


5;o  ASSIGNMENTS  CONTRAVENING    STATUTES.  §324 

do  not  here  speak  of  cases  of  express  and  intentional 
fraud  upon  creditors,  but  of  such  as  virtually  and  indi- 
rectly operates  the  same  mischief,  by  abusing  their  confi- 
dence, misleading  their  judgment,  or  secretly  undermining 
their  interest.  It  is  difficult,  in  many  cases  of  this  sort, 
to  separate  the  ingredients  which  belong  to  positive  and 
intentional  fraud,  from  those  of  a  mere  constructive 
nature,  which  the  law  pronounces  fraudulent  upon  princi- 
ples of  public  policy.  Indeed,  they  are  often  found  mixed 
up  in  the  same  transaction."  ' 

§  324.  Assignments  contravening  statutes.  —  I  he  burden 
rests  upon  the  attacking  party  to  point  out  the  illegal 
provision,  or  to  establish  the  dishonest  purpose  in  the 
assignment.2  It  may  be  stated,  as  a  general  rule,  that 
an  assignment  which  contravenes  the  provisions  of  a 
statute,  or  vests  the  assignee  with  a  discretion  contrary 
to  the  terms  of  an  express  provision  of  law,  and  authorizes 
him  to  effect  sales  of  the  assigned  property  in  a  manner 
not  permitted  by  the  statute,  will  be  declared  void.'  This 
principle  is  learnedly  discussed  in  a  case  in  the  Supreme 
Court  of  the  United  States.4  The  assignment  provided 
as  follows  :  "  The  party  of  the  second  part  [the  assignee] 
shall  take  possession  of  all  and  singular  the  property  and 
effects  hereby  assigned,  and  sell  and  dispose  of  the  same, 
either  at  public  or  private  sale,  to  such  person  or  persons, 
for  such  prices  and  on  such  terms  and  conditions,  either 
for  cash  or  upon  credit,  as  in  his  judgment  may  appear 
best  and  most  for  the  interest  of  the  parties  concerned, 


'1  Story's  Eq.  Jur.  §349.  Q.    B.    618;    Jackson    v.    Davison,     1 

Roberta   v.  Buckley,  145  N.  Y.  215,  Barn.  &  Aid.    691  :   Miller  v.  Post,   1 

39  N.  E.  Rep.  966.  Allen  (Mass.)  434;  Parton  v.  Hervey, 

Jaffray  v.  MoGhee,    L07  IT.  S.  361-  1    Gray   (.Mass.)   119;     Bathaway   v. 

365,  .'  s.  ( '.  Rep.  :;ii7  ;  <  lollier  v.  Davis,  Moran,  44  Me.  67. 

IT   Ark.  :;<;'.).   I    S.  W.   Rep.  684.     See  *  Jaffray  v.   McGb.ee,  107  U.  S.  861, 

Peck    v.    Burr,    10    N.   Y.    394;    Mac-  2  S.  C.  Rep.  367. 
-  1  \.  Dover  <\   Deal  R.  R.  Co.,  18 


§324  ASSIGNMENTS  CONTRAVENING    STATUTES.  3JI 

and  convert  the  same  into  money.  It  will  be  observed 
that  the  assignment  did  not,  by  its  terms  prevent  the 
assignee,  in  the  administration  of  his  trust,  from  fol- 
lowing the  directions  of  the  statute  in  all  particulars. 
Counsel  contended  that  the  assignment  was  valid 
(i)  because  the  discretion  given  the  assignee  by  the 
assignment  left  him  at  liberty  to  follow  the  law,  and 
(2)  because  even  if  the  assignment  required  him  to 
administer  the  trust  in  a  manner  different  from  that  pre- 
scribed by  law,  only  such  directions  as  conflicted  with 
the  law  would  be  void,  and  the  assignment  itself  would 
remain  valid.  The  Supreme  Court  of  the  United  States, 
however,  did  not  adopt  this  view,  but  followed  the  local 
construction  given  to  the  assignment  law  of  Arkansas  by 
the  Supreme  Court  of  that  State  in  Raleigh  v.  Griffith,1 
to  the  effect  that  such  an  assignment  was  void  as  to  cred- 
itors, and  held  that  the  construction  put  upon  the  law  by 
the  highest  court  of  the  State  where  the  assignment  was 
made,  was  binding  on  the  courts  of  the  United  States.2 
The  substance  of  the  opinion  in  Raleigh  v.  Griffith,8  is 
that  the  statute  is  disregarded  in  the  deed  of  assignment, 
the  assignee  being  authorized  to  sell  at  private  or  public 
sale,  and  for  cash  or  on  credit.  The  assignee  was  vested 
with  a  discretion  to  prolong  the  closing  of  the  trust  for 
an  indefinite  period.  The  legislature  having  deemed  it 
expedient,  as  a  matter  of  public  policy,  to  require  an 
assignee  for  the  benefit  of  creditors,  to  sell  the  property 
within  a  specified  time  and  prescribed  manner,  the  dis- 
senting creditors  are  not  barred  by  a  deed  made  in  direct 
contravention  of  a  plain  provision  of  the  statute.  1  he 
provisions  of  the  statute  are  mandatory  and  not  director),' 


1  37  Ark.  153.  Branch  Lumber  Co.  v.  011.  142  I'    S. 

*Brashear    v.    West,    7    Pet.    608;      622, 12  S.  C.  Rep.  318.     See  §  71. 
Sumner  v.  Hicks,  3  Black  532  :  Left-  ;  :'.7  Ark.  15:;. 

ingwellv.  Warren,  2 Black  599;  South  'See    French  v.  Edwards,  18  Wall. 

506. 


572  SACRIFICE    ''I     PROPERTY.  5*3-5 

and  it  follows,  in  the  words  of  Mr.  Justice  Woods,  that 
an  assignment  ''which  vests  the  assignee  with  a  dis- 
cretion  contrary  to  the  mandates  of  the  statute,  and  in 
effect  authorizes  him  to  sell  the  property  conveyed 
thereby  in  a  method  not  permitted  by  the  statute,  must 
be  void,  for  contracts  and  conveyances  in  contravention 
of  the  terms  or  policy  of  a  statute  will  not  be  sanctioned."  ' 

£  325.  Transfer  to  prevent  sacrifice  of  property.  —  Super- 
fluous recitals  as  to  the  intention  with  which  the  volun- 
tary conveyance  was  made  sometimes  prove  fatal  to  the 
paper.  In  German  Insurance  Bank  v.  Nunes~  the 
material  part  of  the  deed  read :  "  That  whereas,  the  said 
first  party  is  indebted  to  sundry  persons  in  various  sums, 
amounting  in  the  aggregate  to  about  thirty-eight  thousand 
dollars,  and  is  the  owner  of  a  large  amount  of  assets,  esti- 
mated to  be  worth  more  than  fifty  thousand  dollars;  and 
whereas,  the  said  first  party  is  unable  to  convert  his  said 
assets  into  money  fast  enough  to  discharge  his  said 
indebtedness  as  it  matures,  and  is  desirous  that  the  same 
shall  not  be  sacrificed,  but  so  managed  and  disposed  of 
that  they  will  realize  their  fair  value  at  as  little  cost  as 
possible,  and  satisfy  his  creditors,  in  full,  and  leave  a  resi- 
due for  him,  etc."  The  court  said,  in  the  course  of  the 
opinion,  that  it  was  the  intention  of  the  parties  which  con- 
trolled, and  that  this  intention  could  not  be  better  deter- 
mined than  from  the  language  employed  in  the  convey- 
ance. The  deed  declared  that  it  was  made  "to  prevent  a 
sacrifice"  of  the  property  and  "  to  leave  a  residue  "  to  the 
debtor.  It  also  avowed  in  the  instrument  that  the  assets 
were  largely  in  excess  of  the  liabilities,  and  it  would  seem 


1  Jaffray   v.  McGhee,  107  U.  S.  365,  v.  IJ<>st,  1  Allen  (.Mass.  134  ;   Parton  v. 

.Rep.367     Citing  Peck  v.  Burr,  Hervey,  1   Gray  (Mass.)  119  ;    Batba- 

10  N"    Y.  -t'.n  -,   Macgregor  v.  Dover  A:  way  v.  Moran,  14  Me.  <>7. 
Deal  I;,  k.  Co.,  18  Q.  B.  618;  Jackson         2  80  Ky.  334,  335. 
v.  Davison,  I  Barn  &  Aid.  cur,  ;  Miller 


§  326  RESERVATIONS.  573 

to  follow  from  the  language  that  the  primary  object  of 
the  deed  was  not  to  secure  creditors,  but,  on  the  contrary, 
to  obstruct  them  in  the  enforcement  of  their  legal  reme- 
dies in  order  that  the  debtor  might  be  benefited.  The 
deed  was  declared  to  be  fraudulent  upon  its  face  and  was 
set  aside.1 

§326.  Reservations  —  Exempt  property. —  A  favorite 
ground  of  attacking  voluntary  assignments  made  by  debt- 
ors for  the  benefit  of  creditors  is,  that  a  reservation  has 
been  made  in  the  debtor's  interest,2  or  that  there  has  not 
been  a  complete  surrender  of  the  debtor's  dominion  and 
control  over  the  assigned  property.3  The  question  comes 
up  in  various  phases.  Davis,  P.  J.,  observes  :  "It  is  well 
settled  that  the  reservation  of  the  least  pecuniary  charac- 
ter by  the  assignor  or  his  family,  and  any  device  to  cover 
up  the  property  for  the  benefit  of  the  assignor,  or  secure 
to  him  directly  or  indirectly  any  benefit,  is  fraudulent,  and 
has  always  received  the  condemnation  of  the  courts. 
The  debtor  who  makes  an  assignment  of  this  character 
must  devote  all  his  property  to  the  payment  of  his  debts, 
except  such  as  is  by  law  exempt  from  execution.  The 
withholding  of  any  considerable  sum  of  money  at  the 
time  of  making  an  assignment,  from  the  assignee,  must, 
we  think,  in  some  form  be  explained,  otherwise  it  is  suffi- 
cient to  establish  a  fraudulent  intent."4  An  assignment 
in  Michigan  is  void  which  does  not  include  the  assignor's 

1  See,    also,    Vernon    v.    Morton,    8  Y.  520.    it   was  lield   that   an   express 

Dana  (Ky.)  247,  264  :  Van  Nest  v.  Yoe,  exception  from  the  grant  of  a  portion 

1   Sandf.    Ch.    (N.   Y.)   4;   Ward   v.  of  the  property  of  the  assignor,  there 

Trotter,   3  Mon.  (Ky.)  1;  Bigeknv  v.  being  no  reservation  of  benefil  in  the 

Stringer.  40  Mo.  195.  property    actually    assigned,    did     ool 

'Means  v.   Dowd,   128  U.  S.  273,  9  render  the  instrument  void.     SeeMat- 

S.  C.   Rep.   65;  McReynolds  v.   Ded-  ter  of  Gordon,  49  Hun  (N.  Y.)  372,  3 

man.  47   Ark.  351,1   S.  W.  Rep.  552 ;  N.    Y.    Supp.    589:  Dow    v.    Platner, 

Grove?  v.  Wakeman,  11  Wend.  (N.  Y.)  L6  N.  Y.  562. 

187,    1    Am.   L.  Cas.   63;  Goodrich  v.  'White  v.    Fagan,    25  N.    V.    Daily 

Downs.  6  Hill  (N.  Y.)  438.  [leg.    p.    269  (Feb.  8.    1884).     See    is 

3  In  Carpenter  v.  Underwood,  19  N.  Weekly  Dig.  (N.  Y.)  358. 


374  RESERVATIONS.  §326 

real  estate.1  A  reservation  of  $800  worth  of  property  * 
renders  an  assignment  void  on  its  face.  The  fact  that 
the  money  so  reserved  is  to  be  used  for  the  purpose  of  a 
compromise  is  no  excuse.3  Nor.  generally,  that  it  was 
paid  over  to  the  assignee  after  the  action  to  set  aside  the 
assignment  was  brought.4  If,  however,  the  amount 
retained  was  small  and  was  handed  over  to  the  assignee 
before  the  suit  was  brought,  the  assignment  will  not  neces- 
sarily be  set  aside.5  An  assignment  is  invalid  if  the 
debtor  prefers  his  landlord's  claim  for  rent  of  a  dwelling- 
house  with  intent  to  secure  occupation  for  himself  and 
family  subsequent  to  the  assignment  without  further  pay- 
ment1' An  assignment  for  the  benefit  of  creditors  who 
will  accept  sixty  per  cent.,  reserving  the  surplus  to  the 
debtor,  is  manifestly  invalid.7 

We  have  already  shown  that  according  to  the  weight 
of  the  best  authority,  a  conveyance  of  a  debtor's  exempt 
property  or  homestead8  cannot  be  annulled  as  fraudu- 
lent. The  same  principle  appertains  in  the  law  regulat- 
ing fraudulent  voluntary  assignments  reserving  property 
exempt  by  statute.  The  assignment  is  not  rendered  void 
for  the  reason  that  creditors  are  "  not  hindered  or  delayed 
by  the  reservation  of  that  which  they  have  no  right  to 
touch."  !l     This  is  an  exception  to  the  rule  clearly  deduci- 


Price   v.  Baynes,  :!T  Mich.  4S7.  per  •  In  re  Beadle,  5  Sawyer351. 

Cooley,  C.  J.,  1  Am.  tnsolv.  Rep.  L38.  K  See  Reeves  v.  Peterman,  in1,)  Ala. 

(lark  v.  Robbins,  8  Kan.  574.  368,  19  So,  Rep.  512. 

Eleine  v.  Nie,  88  Ky.  542, 11  S.  W.  9  Hildebrand    v.    Bowman,   100  Pas 

Rep.  r,90.  St.  582.     See  Mulford  v.  Shirk,  26  Pa. 

Coureey  v.   Morton.  132  N.  Y.  556,  St.    474;    Ehrisman    v.    Roberts,    68 

:;<»  X    E.  Rep.  231.  Pa.  St.  :!11  ;  Richardson  v.  Marqueze, 

Fas    v.  Grant,  53 Hun,  44,  5  N.  Y.  59    Miss.    80,  42    Am.    Rep.  353.     See 

Sup],.   910,  affi'd    126  X    Y.  624,  2*3  N.  Derby  v.  Weyrich  8  Neb.  176,30  Am. 

E    Rep    HO.     See,  also,  Rothschild   \.  Rep.   827;  1><>w   v.    Platner,   Hi  X.  Y. 

Solomon,  52   linn   (N     Y.)    186,  :,   X.  562  ;  Heckman  v.  Messinger,  49  Pa.  St. 

Y.  Sup.  si;:,.  |65.     Red  River  Valley  Bank  v.  Free 

Elias  v.    Farley,    3    Vbb.  Ct.  A.pp.  man.   1  N.   Dak.    196,  46  X.   W.   Rep 

Dec,  X.  Y.  11.  36;   Richardson   v.   Stringfellow,    100 


§  327  kl.M.m  i\i,    SURIM  1  S.  575 

ble  from  the  cases,  "  that  no  debtor  can,  in  an  assignment, 
make  a  reservation  at  the  expense  of  his  creditors  of  any 
part  of  his  income  or  property  for  his  own  benefit,  nor 
can  he  stipulate  for  any  advantage  either  to  himself  or 

family."  J  If  exempt  property  is  not  reserved  it  seems 
it  cannot  be  claimed.2  Another  reservation  must  be 
considered. 

£  327.  Reserving  surplus.  In  cases  where  a  debtor  has 
assigned  all  of  his  property  in  trust  to  pay  certain  speci- 
fied creditors,  and  then,  without  making  provision  for 
other  creditors,  to  reconvey  the  residue  of  the  property 
to  the  debtor,  the  instrument  was  declared  fraudulent 
upon  its  face.  The  court  held  that  it  could  not  be  made 
effectual  by  showing  that  there  was,  as  matter  of  fact,  no 
possible  surplus  resulting  to  the  debtor  after  the  pre- 
ferred creditors  were  paid.  Bronson,  J.,  observed  :  "  The 
parties  contemplated  a  surplus,  and  provided  for  it;  and 
they  are  not  now  at  liberty  to  say  that  this  was  a  mere 
form  which  meant  nothing.  And  although  it  should  ulti- 
mately  turn  out  that  there  is  no  surplus,  still  the  illegal 
purpose  which  destroys  the  deed  is  plainly  written  on  the 
face  of  the  instrument,  and  there  is  no  way  of  getting  rid 
of  it."8  In  Knapp  v.  McGowan,4  Earl,  J.,  said:  "An 
insolvent,  and  even  a  solvent  debtor  cannot  convey  all  his 
property  to  trustees  to  pay  a  portion  of  his  creditors, 
with  a  provision  that  the  surplus  shall  be  returned  to  him, 
leaving  his  other  creditors  unprovided  for;  because  such 


Ala.  416.  14  So.  Rep.  283;   Bobbitt  v.  Leavitt,  6  N.  Y.  521.     The  defect  can- 

Rodwell,  105  N.  C.  236,  11  S.  E.  Rep.  not  l>e  remedied  by  ;i  supplementary 

245.     See  £;;  46-50.  assignn*  tit,  so  as  to  cul  off  lien 

1  McClurg   v.    Lecky,    3  P.   &.  W.  quired  in  the  meantime.     Sutherland 
(Pa.)  91.  v.    Bradner,   1  16    N.  Y.  U0,  22   N.  E. 

2  Carroll   v.  Else.  75  Md.  301,  23  Atl.  Rep.  554.     The  New  York  rule  is  dis- 
Rep.  740.  approved   in   Muchmore    v.   Budd,  58 

(iritlin    v.    Barney,     2    X.    Y.  371.  N.J.  Law  369,  22  Atl.  Rep.  518. 
See  Smith   v.   Howard,  20   How.    Pr.  '  96  N.  Y.  85. 

(N.  Y.)   12S.     Compare   Nicholson   v. 


S>i 


j6  RESERVING    SURPLUS.  $  5-7 


a  conveyance  ties  up  his  property  in  the  hands  of  his 
trustees,  places  it  beyond  the  reach  of  his  creditors  by 
the  ordinary  process  of  the  law,  and  thus  hinders  and 
delays  them,  and  is,  therefore,  void  as  to  the  creditors  unpro- 
vided for."  x  The  Supreme  Court  of  Nebraska,2  how- 
ever, refused  to  follow  this  doctrine,  and  considered  that 
such  a  reservation  was  partial  and  only  incidental.  It 
merely  stipulated  for  that  which,  had  it  been  omitted, 
the  law  would  have  implied,  and  required  to  be  done.3 
So  in  Hubler  v.  Waterman,4  the  court  observed  :  "  The 
reversionary  clause  is  mere  surplusage,  for  it  would  have 
been  implied  if  it  had  not  been  expressed."  5  The  princi- 
ple set  forth  in  these  latter  cases  certainly  embodies  the 
more  logical  rule.  There  is,  however,  an  obvious  dis- 
tinction in  these  cases.  In  Griffin  v.  Barney  the  surplus 
was  to  revert  before  all  the  creditors  were  paid,  which 
was  palpably  fraudulent,  while  in  the  other  cases  the  sur- 
plus contemplated  was  that  remaining  after  all  the  cred- 
itors had  been  satisfied.  Of  course  the  law  will  not 
permit  a  debtor  in  failing  circumstances  to  convey  all  his 
property  to  trustees,  with  a  view  to  exempt  it  from  execu- 
tion for  an  indefinite  time,  to  authorize  them  to  hold  it 
against  creditors  until  the  profits  pay  all  charges, 
expenses  and  debts,  and  then  to  reconvey  it  or  permit  it 
to  revert  to  the  original  owner.  Property  cannot  be  thus 
withdrawn  from  the  operation  of  the  law  in  its  due  course 
against  the  consent  of  existing  creditors.6  A  provision 
in  an  assignment  to  a  creditor  to  the  effect  that  am-  sur- 
plus should  be  paid  to  another  creditor  has  been  held  to 
be  valid.' 


Sutherland  v.  Bradner,  116  N.  *  33  Pa,  St.  414. 

Y.  410.  22  N   K.  Rep.  554  Sees,  p.,  Johnson  v.  McAllister,  30 

Morgan  v.  Bogue,  7  Neb.  133.  Mo.  327;  Richards  v.  Levin,  16  Mo.  598. 

•See  Curtis  v.  Leavitt,  l">  N.  V.  '.) ;  'Arthur    v.    Commercial  &  R.  R. 

Coulter  v.  Lumpkin,  88  Ga.  277,  US.  Bank,  17  Miss.  133. 

E.  Rep.  614;  Bluthenthal  v.  Magn<  Perkins   v.    Hutchinson,    17   R.   1. 

'.»;  Ala.  530,  L3So.  Rep.  7.  150,  22  Ail.  Rep.  1111. 


§  328  Kl  ' ■'  N  31  577 

§  328.  Releases  exacted  in  assignments  -  Voluntary 
assignments  exacting  releases  from  creditors  are  looked 
upon  with  great  disfavor  by  the  courts.1  The  law  seems 
to  be  settled  that  assignments  will  be  declared  fraudu- 
lent and  void  if  creditors  are  preferred  on  condition  of 
their  subsequently  executing  releases  of  their  respective 
demands.  The  reason  is  obvious.2  It  is  a  clear  attempt 
on  the  part  of  the  debtor  to  coerce  his  creditors  to 
accede  to  his  terms,3  and  a  withholding  of  his  property 
from  them  unless  they  do  so  accede.  As  was  observed 
in  Hyslop  v.  Clarke  :4  "It  does  not  actually  give  a  prefer- 
ence, but  is,  in  effect,  an  attempt  on  the  part  of  the 
debtors  to  place  their  property  out  of  the  reach  of  their 
creditors,  and  to  retain  the  power  to  give  such  prefer- 
ence at  some  future   period If  they  can  keep  it 

locked  up  in  this  way  in  the  hands  of  the  trustees,  and  set 
their  creditors  at  defiance  for  three  months,  they  may  do 
so  for  three  years,  or  for  any  indefinite  period."5  The 
right  of  giving  preferences  cannot  be  so  exercised  as  to 
secure  to  the  debtor  the  future  control  of  the  assigned 
property  or  its  proceeds,  as  continuing  the  business  in 
another's  name.6 


'Hubbard       v.     McNaughton,     43  Rep.   36;   May  v.    Walker.   :>,:>   Minn. 

Mich.  224.     See  Lawrence  v.  Norton,  194;  Greeley  v.   Dixon,  21  Fla.  426  : 

4  Woods  406;    Leitcb  v.  Hollister,  4  cf.  Stewart  v.  Spenser,  1  Curt    157,  88 

N.  Y.  211 ;  Baldwin  v.   Peet,  22  Tex.  Fed.  Cas.  72.     Clayton  v.  Johnson,  36 

708;   Barney  v.   Griffin,  2  N.  Y.  365  ;  Ark.  406;   Wolf   v.  Gray,  58    \rk.  75, 

Bennett  v.   Ellison,  23  Minn.   242,   1  13  S.   W.    Rep.    512.      in   that    State 

Am.    Insolv.    Rep.    36  ;    Curtain    v.  preference  of  assenting  creditors   is 

Talley,  46  Fed.  Rep.  580;  Oliver-Finnie  allowed  provided  thai  all  the  surplus 

Grocer  Co.  v.  Miller,  53  Mo.  App.  107;  is  devoteil  to  payment   of  aon-assent- 

Turner  v.  Douglass,   77  Tex.   619,   14  ing  creditors. 

S.  W.  Rep.  221  ;  McWilliams  v.  Cor-  »  Qliver-Finnie  Grocer  Co.  v.  Miller, 

nelius,  66  Tex.  301,  17  S.  W.  Rep.  767  :  53  Mo.  App.  107. 

Focke  v.  Blum,  82  Tex.  436,  17  S.  W.  *  14  Johns.  (N   Y.)  458, 

Rep.  770.  l  See  Grover  v.  Wakeman,  11  Wend 

5  Spaulding  v.  Strang,  38  N.  Y.  12  ;  (N.  Y.>  1ST. 

Brown  v.  Knox,  6  Mo.  303  :  Bennett  v.  >  Haydocfc  v.  Coope,  53  N    Y.  68 
Ellison,  23  Minn.  242,  1    Am.   Insolv. 

37 


;;S  PREFERRING    CLAIMS.  ^5^9 

It  has  been  considered  competent  for  a  debtor  in  fail 
in«''  circumstances  to  make  an  assignment  for  the  benefit 
of  creditors,  providing  that  accommodation  creditors  shall 
be  paid  first  ;  secondly,  those  creditors  who  had  executed 
a  conditional  release  should  receive  fifty  per  cent.  ;  and 
thirdly,  the  residue  of  the  creditors  should  be  paid.1  The 
whole  estate  was  by  this  instrument  devoted  to  the  pay- 
ment of  the  debts.  It  was  considered  that  in  no  sense 
could  it  be  said  that  an  agreement  by  a  debtor  with  a 
creditor  to  prefer  him  for  one-half  of  his  demand  in  an 
assignment,  on  condition  or  in  consideration  that  the  bal- 
ance should  be  released,  was  a  fraud  upon  those  who 
refused  to  become  parties  to  the  contract.  These  cases 
certainly  go  to  the  verge  in  upholding  an  assignment  of 
this  character  ;~  and  where  it  is  apparent  from  the  face  of 
the  deed,  or  is  a  moral  certainty,  that  nothing  will  be  left 
to  the  non-assenting-  creditors,  the  court  will  annul  the 
assignment.3 

§  329.  Preferring  claims  in  which  assignor  is  partner  — 
Rights  of  survivor.  —It  was  contended  by  counsel  in  Welsh 
v.  Britton,4  that  if  an  insolvent  person  made  an  assign- 
ment for  creditors,  and  preferred  a  debt  due  another  firm, 
one  member  of  which  was  also  a  member  of  the  assign- 
ing  firm,  this  constituted  such  a  reservation  to  one  of  the 
assignors  as  would  avoid  the  assignment.  The  case  of 
Kayser  v.  Heavenrich  "'  was  cited,  but  the  court  said  that 
it  could  not  be  said  to  establish  so  broad  a  principle.  In 
that  case  a  preference  was  given  to  one  Lowentholl,  and 
one  of  the  assigning  firm  was  an  equal  partner  with 
Lowentholl  in  the  preferred  claim.      This  was  held  to  be 


Spaulding  v.  Strang,  37  N.  V.  135,         s  Seale  v.  Vaiden,  1  Woods661. 

38    N.    Y.    9;  explai I,    Baydock   v.  ;I  Scale  v.  Vraiden,  4  Woods  661.    Sol 

Coope,   53   N.  Y.  74.     Compare   Nat.  Lawrence  v.  Norton,  I  Woods  106. 
Park  Kink  v.Wuitmore,  nil  X.  Y.  304,         '  55  Tex.  122. 
LO  N.  E.  Rep.  524     Smith    v.  Munroe,  '  5  Kan.  324. 

1   \|.|,.  Div.(N.Y.)77,  :;7  N.Y.  Supp.  62. 


§  329  PREFERRING   CLAIMS. 

a  secret  trust  for  the  benefit  of  that  member  oi  the  firm 
and  to  invalidate  the  assignment.  The  fad  "I  se<  rei cy 
was  also  given  prominence.  (  )n  the  other  hand,  the  i 
of  Fanshawe  v.  Lane1  asserts  the  absolute  right  of  an 
assigning  firm  to  prefer  such  debts.  The  Supreme  Court 
of  Texas  followed  this  latter  case.  In  Bonwil  \.  Hey- 
man,a  it  was  held  that  a  preference  by  mem  hers  of  a 
partnership  of  another  firm  of  which  they  are  the  sole 
partners,  will  not  be  upheld  unless  it  be  clearly  shown 
that  the  transaction  is  free  from  fraud.  We  may  here 
state  that  the  insolvent  cannot  delegate  to  the  assignee 
the  power  to  give  preferences  at  his  discretion. ; 

As  we  have  seen,  a  special  partner  cannot  be  preferred 
for  the  amount  of  his  investment,4  and  where  a  limited 
partnership  becomes  insolvent  its  assets  are  a  special 
fund  for  the  payment  of  its  debts  except  those  due  to  the 
special  partner.5  A  surviving  partner  may  make  a 
general  assignment  of  the  firm  assets.0  Mr.  Justice 
Harlan  said  :  "  But  while  the  surviving  partner  is  under 
a  legal  obligation  to  account  to  the  personal  representa- 
tive of  a  deceased  partner,  the  latter  has  no  such  lien 
upon  joint  assets  as  would  prevent  the  former  from  dis- 
posing of  them  for  the  purpose  of  closing  up  the  partner- 
ship affairs.  He  has  a  standing  in  court  only  through  the 
equitable  right  which  his  intestate  had,  as  between  him- 
self and  the  surviving  partner,  to  have  the  joint  property 
applied  in  good  faith  for  the  liquidation  of  the  joint  lia- 
bilities. As  with  the  concurrence  of  all  of  the  partners  the 
joint  property  could  have  been  sold  or  assigned,  for  the 

1  16  Abb.  Pr.  (N.  Y.)  82.  •  Emerson  v.  Senter,  118  CJ.  8.  3,  6 

2  43  Neb.   537.  61  N.  W     Rep.   716.      S.  C.  Rep.  981  ;   William-  \.  Whedon, 
'Boardman   v.  Balliday,  10  Paige      L09  V   Y.  341,    16  X.    E.    Rep.   865 

iN.  Y.)  223.  Haynes   v.    Brooks,    12    Hun     N     Y.i 

•Whitcomb  v.   Fowle,  10   Daly  (N.  528;  Beste  v.  Burger,   17   AM.    N.C 

5     23,  1  Am.  [nsolv.  Rep.  160  (N.  Y.    L6i   and  note  on  the  rights  of 

limes  v.   Lansing,  7  Paige  (N.  Y.)  surviving   partners,   and    represents 

583.  tives  "i  a  deceased  partner. 


580  TRUSTEE.  §  330 

benefit  of  preferred  creditors  of  the  firm,  the  surviving 
partner — there  being  no  statute  forbidding  it — could  make 
the  same  disposition  of  it.  The  right  to  do  so  grows  out 
of  his  duty,  from  his  relations  to  the  property,  to  admin- 
ister the  affairs  of  the  firm  so  as  to  close  up  its  business 
without  unreasonable  delay  ;  and  his  authority  to  make 
such  a  preference —  the  local  law  not  forbidding  it  —  can- 
not, upon  principle,  be  less  than  that  which  an  individual 
debtor  has  in  the  case  of  his  own  creditors.  It  neces- 
sarily results  that  the  giving  of  preference  to  certain  part- 
nership creditors  was  not  an  unauthorized  exertion  of 
power  by  Moores,  the  surviving  partner."  1  A  preference 
given  by  a  board  of  directors  to  a  firm  of  which  two  of 
them   are  members  was  held  void.2 

§  330.  Authorizing  trustee  to  continue  business.  —  An 
assignment  drawn  precisely  as  it  ought  to  be  will  not 
undertake  to  speak  to  the  assignee  in  detail  in  regard  to 
his  duties  under  the  trust.  These  duties,  unless  the  cred- 
itors themselves  direct  otherwise,  are  simply  to  convert 
the  estate  into  money  and  pay  the  debts  in  the  order  and 
with  the  preferences  indicated  in  the  instrument.3  There 
are  numerous  cases  reported  in  which  assignments  in 
trust  for  the  benefit  of  creditors  have  been  sustained, 
although  they  contained  provisions  for  the  continuance 
of  the  business  of  the  assignor,  either  by  himself  or  by 
his   trustee.4      It  will   be   found  upon  examination  that,  in 


1  Emerson    v.  Senter,  118  U.  S.  3,  8,  assigned,    and  may  also   direct  upon 

<i  S.  ( '.  Hep   981.  what  debts  and    in    what    order  the 

*  Hulings  \     Hillings  Lumber  Co.,  proceeds  shall  be  applied:  but  beyond 

38  W.  Va.  ;',.",i,  188.  E.  Hep.  620.  this  can  prescribe  no  conditions  what- 

1  Ogden    v.    Peters,    31    N.    Y.    24.  ever  as  to  the  management  or  dispo* 

'•  The  true  principle  applicable  to  all  sition    of    the    assigned    property." 

Buch    cases    is.    that    a    debtor  who  Selden,  J.,  in  Dunham  v.  Waterman, 

makes   a    voluntary    assignment    for  17  N.    Y.   20;  Jones   v.    Syer,  52  Md. 

the   benefit    of  his   creditors  may  di-  211. 

rect,  in   general    terms,  a    Bale  of  the  '  !>.•  Forest   v.  Bacon,  2  Conn.  6881 

property  ami   collection    <>f  the  dues  Kendall  \.  The  New  England  Carpet 


§33'  ILLUSTRATIONS    AND    AUTHORITIES.  581 

many  of  these  cases,  the  business  authorized  to  be  carried 
on  by  the  assignment  was  merely  ancillary  to  winding  up 
the  debtor's  affairs,  and  that  the  authority  was  given  with 
the  view  of  more  effectually  promoting  the  interests  of 
the  creditors.1  In  cases  where  the  authority  is  given 
chiefly  for  the  benefit  of  the  debtor,2  or  where  it  is 
intended  or  calculated  to  hinder  and  delay  creditors  for 
an  unreasonable  period  in  the  collection  of  their  debts,  it 
renders  the  deed  fraudulent  and  void3 

§  331.  Illustrations  and  authorities.  —  Authorities  relating 
to  this  class  of  voluntary  assignments  are  numerous.  In 
Owen  v.  Body,4  the  assignment  was  made  to  trustees  for 
the  benefit  of  creditors,  giving  preferences,  and  contained 
provisions  investing  the  trustees  with  power  to  carry  on 
the  trade  of  the  debtor,  and  in  furtherance  of  that  pur- 
pose to  lay  out  money  in  payment  of  rent  and  keeping 
up  the  stock  in  trade.  The  deed  was  adjudged  void  as 
being  an  instrument  to  which  creditors  could  not  reason- 
ably be  expected  to  assent.  Lord  Wensleydale,  in  giving 
his  opinion  in  the  House  of  Lords  in  the  case  of  Wheat, 
croft  v.  Hickman,5  referring  to  this  deed  said  that  the 
provisions  contained  in  it  allowing  the  effects  of  the 
debtor,  which  ought  to  have  been  divided  equally  amongst 
his  creditors,  to  be  put  in  peril  by  being  employed  in 
trade,  prevented  it  from  being  a  fair  deed  and  good 
against  creditors.  In  American  Exchange  Bank  v. 
Inloes,6  the  deed  contained  a  provision  empowering  the 

Co.,    13  Conn.    383  ;    Foster    v.  Saco  •  Acme    Lumber   Co.    v.    Hoyt,   71 

Manuf.    Co.,    12    Pick.    (Mass.)    451;  Miss.  106,  14  So.  Rep.  64. 

Woodward    v.     Marshall,     22    Pick.  3  Webb  v.  Armistead,  26  Fed.  Rep. 

(Mass.)  468;    Hitchcock    v.   Cadmus,  70;  Jones  v.  Syer,  52  Md.  211. 

2  Barb.  (N.  Y.)  381 ;  Ravisies  v.  Al-  4  5  Adol.  &  El.    28,  31    Eng.    C.  L 

Ston,  5  Ala.  297;  Janes  v.  Whitbread,  254  ;  Acme    Lumber  Co.  v.  Hoyt,    71 

11  C.  B.  406  ;  Stoneburner  v.  Jeffreys,  Miss.    106,  14  So.    Rep.    64  ;  Jones  v. 

116  N.  C.  78,  21  S.  E.  Rep.  29.  Syer,  52  Md.  211  ;  Renton  v.  Kelly,  49 

!  See  De  Wolf  v.  Sprague  Mfg.  Co.,  Barb.  (N.  Y.)  536. 

49  Conn.  326.  »  9  C.  B.  [N.  S.]  101. 

»  7  Md.  380. 


582  ILLUSTRATIONS   AND   AUTHORITIES.  §331 

trustee  at  his  discretion  to  sell  the  property  conveyed 
gradually,  in  the  manner  and  on  the  terms  in  which,  in 
the  course  of  their  business,  the  assignors  had  sold  and 
disposed  of  their  merchandise.  For  that  reason  the  deed 
was  adjudged  void.  Mason,  J.,  said:  "Without  advert- 
ing to  other  objectionable,  if  not  fatal,  provisions  in  this 
deed,  the  one  to  which  we  have  just  referred  is  sufficient, 
in  the  judgment  of  this  court,  to  render  the  deed  null 
and  void  as  against  creditors.  It  simply  seeks  through 
the  instrumentality  of  a  trustee,  to  provide  for  carrying 
on  the  business  of  the  concern  in  the  same  manner 
in  which  it  had  been  before  conducted,  and  for  an 
indefinite  period,  free  of  all  control  or  interference 
on  the  part  of  creditors.  Surely  if  such  a  provision  in  a 
deed  is  not  calculated  to  hinder  and  delay  creditors,  we  are 
at  a  loss  to  know  what  could  have  such  an  effect,  short  of 
a  conveyance  in  trust  for  the  benefit  of  the  grantor  himself. 
A  debtor  cannot  thus  postpone  his  creditors  to  an  indefi- 
nite period  without  their  assent.  A  conveyance  which 
thus  attempts  to  deprive  creditors  of  their  just  rights  to 
enforce  their  claims  against  the  property  of  their  debtor, 
by  placing  it  beyond  their  control  for  an  uncertain  and 
indefinite  period,  must  be  regarded  in  conscience  and  law 
as  a  fraud."  In  a  later  case  in  the  same  State1  an 
assignment  in  trust  for  the  benefit  of  creditors,  author- 
izing  the  trustee  to  carry  on  and  conduct  the  business 
"  for  such  time  as  in  his  judgment  it  shall  be  beneficial  to 
so  do,"  or  to  sell  all  the  goods  and  stock  in  trade  "  at  such 
times,  in  such  manner,  and  for  such  prices  as  he  may 
deem  proper,"  was  adjudged  void  as  against  creditors. 
The  court  said:  "It  is  obvious,  the  certain  effect  of  this 
clause  would  be  to  hinder  and  delay  creditors  ;  and  as 
against  them  such  provision  renders  the  deed  utterly 
void.      It  is  an  attempt  on  the  part  of  the  debtor  to  place 

Jones  v.  Syer,  52  M<1.  311. 


§33? 


DI  I   W  . 


583 


his  property,  for  an  uncertain  and  indefinite  period,  beyond 
the  reach  of  his  creditors,  and  to  make  their  rio;hts  in  a 
great  measure  dependent  upon  the  uncontrolled  discretion 
of  a  trustee  of  the  debtor's  own  selection.  The  law  will 
tolerate  no  such  attempt,  but  treats  the  act  as  a  fraud 
upon  creditors,  and  the  instrument  of  conveyance  as 
simply  void  as  against  them."  '  Where  the  deed  required 
the  trustee  to  carry  on  a  school  for  eighteen  months,  and 
if  unprofitable  to  pay  the  loss  from  the  assigned  estate 
the  instrument  was  avoided.2 

§  332.  Delay  — Sales  upon  credit.  —  An  insolvent  debtor, 
it  is  held  in  New  York,  cannot  deprive  his  creditors  of 


1  See,  also,  Dunham  v.  Waterman, 
17  N.  Y.  9.  Authority  given  in  the 
assignment  to  the  assignee  to  finish  up 
unfinished  work  will  not  necessarily 
avoid  the  instrument.  Robbins  v. 
Butcher,  104  N.  Y.  575,  11  N.  E.  Rep. 
272.  In  this  case  the  assignment  con- 
tained the  following  clause  :  "  And  it 
is  further  provided  that  should  it  be 
necessary  and  to  the  better  perform- 
ance of  the  trust  that  the  party  of  the 
second  part  shall  have  full  power  and 
authority  to  finish  such  work  as  is 
unfinished,  to  complete  such  build- 
ings as  are  incompleted,  and  to  pay  all 
necessary  charges  and  expenses  for 
such  completion  prior  to  the  payment 
of  all  debts  and  liabilities  hereinbefore 
mentioned  and  provided."  Finch,  J., 
said  :  "  The  repetition  of  the  word 
•that*  permits  it  to  be  said  that  this 
provision  is  an  unfinished  sentence 
and  confers  no  authority  at  all;  but 
M"  such  criticism  is  made,  and  the 
meaning  of  the  language  is  more  ac- 
curately expressed  by  disregarding 
the  word  'that"  where  it  occurs  the 
second  time.  Both  parties  have  ar- 
gued the  case  upon  such  construction. 
The  appellant  claims  that  the  provi- 
sion confers  upon  the  assignee  an  au- 
thority  derived  from   the  assignor  to 


unduly  delay  the  execution  of  the 
trust  and  divert  the  trust  funds,  in 
the  exercise  of  his  discretion,  and 
free  from  the  supervision  and  control 
of  the  courts,  and  so  is  fraudulent 
and  void  upon  its  face.  The  respond- 
ent contends  that  the  authority  given 
is  upon  a  condition  which  rests  in  the 
discretion  and  judgment  of  the 
courts,  and  if  exercised  by  the  as- 
signee without  their  prior  permission 
and  approval,  must  be  so  exercised  at 
his  peril  and  subject  to  their  prohibi- 
tion or  direction  at  any  moment,  and 
upon  the  application  of  any  person 
interested  or  aggrieved,  and  so  does 
not  involve  an  intent  to  hinder,  delay, 
or  defraud  the  creditors  of  the  as- 
signor. We  think  the  latter  view  of 
the  instrument  discloses  its  true  and 
intended  meaning."  Aprovision  com- 
pelling the  trustee  to  sell  at  the  usual 
retail  prices  will  vitiate  the  assign- 
ment. Gregg  v.  Cleveland,  82  Tex. 
187,  17  8.  W.  Rep.  777;  see  also 
Kansas  City  Packing  Co.  v.  Hoover, 
1  D.  C.  Ct.  of  App.  274;  Chafee  v. 
Blatchford,  6  Mackey  (D.  C.)  459. 

•  Catt  v.  Win.  Knabe  &  Co.  Manuf. 
Co.,  93  Va.  741,  26  So.  Rep.  246.  See 
Sheppards  v.  Turpin,  3  Gratt.  (Va. ) 
373. 


584  DELAY.  §  332 

their  right  to  have  his  property  converted  into  money 
without  delay.  He  can  make  an  assignment  with  prefer- 
ences, but  he  cannot  authorize  his  assignee  to  sell  on 
credit.1  Xo  delay  is  permitted  other  than  such  as  is 
reasonably  necessary  to  secure  the  application  of  the 
property  to  the  payment  of  his  debts.'  In  Dunham  v. 
Waterman,3  Selden,  J.,  following  the  reasoning  of  Nel- 
son, J.,  in  Cunningham  v.  Freeborn,4  said:  "That 
wherever  an  assignment  contains  provisions  which  are 
calculated  per  se  to  hinder,  delay,  or  defraud  creditors, 
although  the  fraud  must  be  passed  upon  as  a  question  of 
fact,  it  nevertheless  becomes  the  duty  of  the  court  to  set 
aside  the  finding,  if  in  opposition  to  the  plain  inference 
to  be  drawn  from  the  face  of  the  instrument.  A  party 
must  in  all  cases  be  held  to  have  intended  that  which  is 
the  necessary  consequence  of  his  acts."5  It  follows  that 
when  this  objectionable  feature  is  embodied  in  the  face 
of  the  assignment,  the  court  itself  will  stamp  it  as  fraudu- 
lent. A  provision  that  realty  embraced  in  the  assign- 
ment shall  be  held  for  two  years,  and  then  sold  partially 
upon  credit  renders  the  assignment  void.6  In  Beus 
v.  Shaughnessy  r  the  insolvent  directed  that  the  "  times, 
places,  and  terms  of  selling  the  property  shall  be  agreed 
on  by  the  trustee  and  the  majority  in  interest  of  the  first 
and  second-class  creditors,"  and  that  if  they  did  not  agree, 
then  two-thirds  of  all  of  the  creditors  should  direct  such 
"  times,  places,  and  terms."     The  court  said  there  seemed 


1  Nicholson  v.  Leavitt,  6  N.  Y.  510  ;  Donaldson,    20     Kans.    165,     1     Am. 

Kansas  City  Packing  Co.  v.  Hoover,  [nsolv.  Rep.  15:5. 

1   D.  C.   CI     \pi>.  268;   Rosenstein  v.  *  17  N.  T.  21. 

Coleman,    18  Mont.  ir.:5.  15   Pac.  Rep.  411  Wend.  (N.  Y.)  251-254. 

L081  ;    Barney  v.  Griffin.  2  N.  Y.  365.  :' See    Coleman    v.   Burr,   93   N.  Y. 

Compare  Bracketl   \     Barvey,  91  N.  31;  also  §§  9,  10. 

Y    220  6  Bank  v.  Martin,  96  Tenn.  3,  33  S. 

Bennett  v.  Ellison,  2:;  Minn.  242,  W.  Rep.  565. 

1  Am.  Insolv.  Rep.  36.     See  Keevil  v.  T2    Utah    499.      See    McCleery    v. 

Allen,  7  Neb.  21. 


§  332  SALES    UPON   CREDI1  .  585 

to  be  but  one  question  to  consider,  and  that  turned  entirely 
upon  the  construction  to  be  placed  upon  the  words  "  terms 
of  selling,"  whether  these  words  in  the  deed  of  trust 
embraced  the  power  to  sell  upon  credit.  Continuing,  it 
was  said  that  the  courts  generally  held  that  deeds  of 
assignment,  giving  authority  to  the  assignee  to  sell  upon 
credit,  were  fraudulent  and  void  as  to  creditors  not 
assenting  thereto,  and  especially  was  this  the  case  where 
the  deeds  made  preferences  between  creditors.  In  New 
York  this  general  rule  is  fully  recognized.  The  case  of 
Kellogcr  v.  Slauson,1  at  first  reading,  would  seem  to  be  a 
departure  from  the  rule,  but  upon  a  more  careful  con- 
sideration it  will  be  found  to  be  consistent  with  it.  The 
assignees  in  that  case  were  authorized  to  sell  the  property 
u  on  such  terms  as  in  their  judgment  might  be  best  for 
the  parties  concerned,  and  convert  the  same  into  money." 
The  court,  in  upholding  the  assignment,  said  that  this  dis- 
cretion must  be  exercised  within  legal  limits.  In  Brigham 
v.  Tillinghast2  the  case  of  Kellogg  v.  Slauson  is  referred 
to,  and  the  court  says  that  the  words  "convert  the  same 
into  money,"  limited  the  disposition  of  the  property  to 
sales  for  cash,  and  that  such  was  the  purport  of  the  ruling 
in  that  case.  The  same  rule  is  reiterated  in  Rapalee  v. 
Stewart.3  The  assignment  held  to  be  valid  in  the  case 
of   Sumner  v.   Hicks4   contained  language  similar  to  that 


1  11  N.  Y.  302.  diate     application,     will     avoid    the 

-  13  N.  Y.  215.  instrument,  because  it  shows  that  it 

1 37  N.   Y.  311.     "The  true  rule  to  was  made  with  '  intent  to  hinder  and 

l»o  observed    is  this  :      An   insolvent  delay  creditors  in  the   collection  of 

debtor  may   make  an  assignment  of  their  debts.'   Such  an  intent  expressed 

all  his  estate  to  trustees  to   pay  his  in  the  instrument  or  proved  aliunde, 

debts   with   or  without    preferences;  is  fatal  alike  by  the  language  of  our 

hut  such  assignees  are  bound  to  make  statute  and  the  well-settled  adjudica- 

an  immediate  application  of  the  prop-  tione  of   the  English  and   American 

erty.      And  any    provision  contained  courts."     Brigham    v.  Tillinghast,  13 

in   the  assignment  which  shows  that  N.  Y.  215  220. 

the  debtor,  at  tin-  time  of  its  execu-  4  2  Black  532. 
tiou,  intended  to  prevent  such  imme* 


586  SALES    UPON    CREDIT.  §  333 

found  in  Kellogg  v.  Slauson,  and,  indeed,  the  closing 
words  of  the  objectionable  provision  were  precisely  the 
same,  viz.:  "And  convert  the  same  into  money."  x  The 
inference  from  these  cases  is  that  if  these  last  words  had 
been  omitted  the  assignments  would  have  been  held  void 
as  authorizing  sales  upon  credit. 

The  word  "term"  signifies,  among  other  things,  "a 
limit,"  "a  boundary."  If  we  say  the  power  of  sale  is 
oranted  without  "limit,"  without  "boundary,"  it  can  be 
exercised  to  an  unlimited  extent  and  without  bounds.  In 
the  case  of  Beus  v.  Shaughnessy  2  there  was  no  restric- 
tion whatever  upon  the  power  of  sale  granted  to  the  trus- 
tees and  a  fixed  proportion  of  the  creditors.  They  were 
authorized  to  sell  upon  such  "  terms  "  as  they  might  deem 
proper,  and  this  power  had  no  limits,  no  bounds.  This 
broad  grant  certainly  would  necessarily  embrace  the 
power  to  sell  upon  credit. 

§333-  —  1°  Wisconsin,  in  the  case  of  Hutchinson  v. 
Lord,3  where  the  assignment  empowered  the  assignee  to 
sell  in  such  manner  and  "  upon  such  terms  and  for 
such  prices  as  to  him  shall  seem  advisable,"  it  was  held 
that  this  language  gave  power  to  sell  upon  credit,  which 
would  necessarily  operate  to  hinder  and  delay  creditors, 
and  rendered  the  assignment  fraudulent  and  void.  In  the 
case  of  Keep  v.  Sanderson,4  although  the  objectionable 
words  were  exactly  those  found  in  Kellogg  v.  Slauson, 
yet  the  court  held  that  they  conferred  an  authority  to 
sell  upon  credit,  and  thus  avoided  the  whole  assignment. 
In  Woodburn  v.  Mosher5  the  authority  to  the  assignees 
was  to  convert  the  property  into  money  "within  conve- 
nient time  as  to  them  shall  seem  meet."  It  was  held  that 
the    assignment    was    void    upon    its    face.      In   Keep  v. 


'See   Keep  v.  Sanderson,   12    Wis.  •  1  Wis.  286. 

362.  «  2  Wis.  42. 

-'  It  ah  499.  6  9  Barb.  (N.  Y.)  255. 


§§  333a>  334  EXEMPTING  ASSIGNEE.  5S7 

Sanderson  l  it  was  decided  that  a  clause  in  an  assignment 
authorizing  the  assignee  to  sell  and  dispose  of  the 
assigned  property  "upon  such  terms  and  conditions  as  in 
his  judgment  may  appear  best  and  most  to  the  intei 
of  the  parties  concerned,"  was  authority  to  sell  on  credit, 
and  that  it  was  void  as  to  creditors,  in  accordance  with  the 
decision  on  the  former  appeal.2 

>J  333a.  Exceptional  rule.  —  In  other  States  a  different 
rule  is  adopted,  and  it  is  held  that  a  general  power  to 
give  credit  is  perfectly  consistent  with  good  faith,  and  not 
only  does  not  render  the  assignment  fraudulent  in  law. 
but  is  not  even  a  badore  of  fraud. :i 

§  334.  Exempting  assignee  from  liability.—  Another  sub- 
terfuge of  insolvent  debtors  must  be  noticed.  In  De 
Wolf  v.  Sprague  Mfg.  Co.4  the  deed  contained  a  clans.- 
which  provided  that  "  in  case  the  same  (meaning  the  mill, 
etc.)  are  thus  run  by  him  or  otherwise,  he  shall  not  be 
liable  personally  for  the  expenses  or  losses  arising  there- 
from, but  the  same  shall  be  chargeable  to  the  trust  fund 
vested  in  him."  This  was  held  in  connection  with  the 
right  to  run  the  mills  and  print  works,  to  furnish  additional 
evidence  of  the  fraudulent  purpose  for  which  the  assign- 
ment was  executed.  A  failing  debtor  cannot  be  permitted 
to  put  at  hazard  the  trust  fund  which  justly  belongs  to 
his  creditors  by  authorizing  the  trustee  to  manage  it  with- 
out due  prudence  and  caution.  This  question  was  before 
the  New  York  Court  of  Appeals  in  Litchfield  v.  White.5 
In  that  case  the  assignment  contained  a  clause  by  which 
it  was  mutually  agreed  between  the  parties  to  it  that  the 


1  12  Wis.  361.  S.    E.   Rep.   682  ;  Johnson   v.  McAllis- 

2  A  trustee  in  bankruptcy  may  sell  ter,  30  Mo.   327:  Scott  v.    Alfonl.  53 
the  property  of  the  estate  on  credit  Tex.  82. 

where  he  deems  such  action  most  for  4  49  Conn.  328. 

the    benefit    of    creditors.      Traer   v.  5  7  N.  Y.  442  ;  Kansas  (  it y  Packing 

Clews,  115  U.  S.  528,  6  S.  C.  Rep.  155.  Co.    v.    Hoover,    1    D.    C.    App. 

3  Kreth  v.  Rogers,  101  N.  C.  263,  7  268. 


588  PROVIDING    F<>R    COUNSEL   FEES.  §335 

assignee  should  not  be  held  liable  or  accountable  for  any 
loss  that  might  result  to  the  trust  property  or  the  pro- 
ceeds of  it,  unless  the  same  should  happen  by  reason  of 
the  gross  negligence  or  willful  misfeasance  of  the  assignee. 
The  assignment  was  adjudged  void.  Chief-Justice  Rug- 
gles  said  :  "A  failing  debtor  by  an  assignment  puts  his 
property  where  it  cannot  be  reached  by  ordinary  legal 
process.  He  puts  it  into  the  hands  of  a  trustee  of  his  own 
selection,  often  his  particular  friend,  sometimes  a  man  to 
whom  the  creditors  would  not  have  been  willing  to  con- 
fide such  a  trust.  The  debtor  has  an  interest  in  the 
application  of  the  trust  funds  to  the  payment  of  his  debts  ; 
but  the  creditors  have  usually  a  far  greater  interest 
therein  ;  and  that  interest  depends  in  many  cases  on  the 
competency  and  diligence  of  the  assignee.  The  debtor 
cannot  be  permitted,  by  creating  a  trust  for  his  creditors, 
to  place  his  property  where  it  cannot  be  reached  by 
ordinary  legal  remedy,  and  at  the  same  time  exempt  the 
trustee  from  his  proper  responsibility  to   his  creditors."1 

§  335-  Providing  for  counsel  fees.  —  The  question  of  the 
right  of  the  assignor  to  provide  for  or  interfere  in  the  mat- 
ter of  the  assignee's  counsel  fees  has  been  before  the 
courts  in  various  forms.  In  Heacock  v.  Durand2 
the  assignee  was  a  lawyer,  and  by  the  provisions  of  the 
assignment  was  to  be  entitled  to  "  a  reasonable  and  lawful 
compensation  or  commission  for  his  own  services,  both  as 
assignee  as  aforesaid,  and  as  the  lawyer,  attorney,  solicitor, 
and  counsel  in  the  premises."  The  assignment  was 
annulled  on  the  theory  that  the  power  given  to  charge 
counsel  fees  tended  so  directly  to  the  impairment  of  the 
fund  and  the  injury  of  creditors,  that  it  was  impossible  to 
offer  a  valid  reason  in  its  support.      The  provision  places 


1  Compare  Casey  v.  Janes,  37  N.  Y.      Dean,  86  N.  Y.  398,  as   to  duties  of 
611  ;    Matter  of    Cornell,    110    N.  Y.      assignee. 
B57,    18    N.    E.    Rep.   142;    Matter  of         M2  111.  231. 


§  336  AUTHORITY    TO    COMPROM] 

the  assignee  in  two  inconsistent  positions.  Tin's  question 
was  before  the  New  York  Court  of  Appeals  in  Nichols  \. 
McEwen,1  and  the  court  held  that  such  a  clause  was 
fraudulent  in  its  character,  and  would  vitiate  the  assign- 
ment. Roosevelt,  J  ,  observed  that  to  sanction  such  a 
clause  "  would  be  establishing  a  practice  pregnant  in  many 
cases  with  the  most  mischievous  consequences."  I  lenio. 
J.,  says,  that  an  insolvent  debtor  has  no  right  "to  create 
such  an  expensive  agency  for  the  conversion  of  his 
property  into  money,  and  distributing  it  among  his  cred- 
itors. Besides  being  wrong  in  principle,  it  is  calculated  to 
lead  to  obvious  abuses."  2  It  is  no  objection,  however, 
to  the  instrument,  that  provision  is  made  for  the  payment 
of  a  reasonable  attorney's  fee  for  the  examination  of  the 
facts,  and  for  advice  and  services  in  drawing  up  the 
assignment 3  and  securing  it  to  be  properly  acknowledged 
and  placed  on  record.  But  at  this  point  the  control  of  the 
assignor  ceases,4  and  the  assignor  has  no  power  to  con- 
tract with  attorneys  for  any  further  services ;  that  is  a 
matter  entirely  within  the  control  of  the  trustee. 

>f  336.  Authority  to  compromise.—  The  authority  given  to 
the  assignees  "to  compromise  or  compound  any  claim  by 
taking  a  part  for  the  whole,  when  they  shall  deem  it  expe- 
dient so  to  do,"  was  considered  by  the  New  York  Supreme 
Court  not  to  expressly  authorize  or  require  an  illegal  act 


1  17  N.  Y.  22;  Norton  v.  Matthews,         3  See  Bryce  v.  Foot.  25  S.  ('.  467  ; 

7  Misc.    (N.  Y.)   569,  28  N.  Y.   Supp.  Drucker  v.  Wellhouse,  82  Oa.   129,  8 

265  ;  Matter  of  Gordon,  49   Hun  (N.  S.  E.  Rep.  40. 

Y.)  370.    3  N.  T.  Supp.  589;  Hill    v.         4  Hill  v.  Agnew,  12  Fed.  Rep.    888. 

Agnew,  12  Fed.  Rep.  232.  A   provision   allowing    the    assignee 

"  Compare     Campbell     v.     Wood-  his   "reasonable   costs,    charges   and 

worth,  24  N.  Y.  305  ;  Dimon  v.  Hazard,  expenses,  including  the  necessary  at- 

32  N.  Y.  71.     Where    an  assignment  torney's  fees,"'  was  held  unobjectioo 

gives  preferences  it  cannot  provide  for  able.     National  Hank   of  the    Repub- 

the  payment  of  a  counsel  fee  incurred  lie;     v.    Hodge,    3    Ct     App.    (1> 

by  the  preferred  creditors  in  defend-  140  ;  see  Mills  v.  Pessels,  55  Fed.  Rep 

ing  such  preference.  Simon  v.  Norton,  588. 
56  Mo.  App.  338. 


590  FRAUD   OF   ASSIGNEE.  §  $$7 

to  be  done,  and  the  court  refused  to  vitiate  the  assign- 
ment.1 And  where  the  instrument  authorized  the 
assignee  to  compound  "  choses  in  action,  taking  a  part  for 
the  whole  when  he  shall  deem  it  expedient,"  the  assignment 
was  sustained.  This  clause  was  held  to  vest  no  arbitrary 
power  in  the  assignee  to  compromise  where  such  action 
was  neither  necessary  nor  proper,  but  merely  to  confer 
the  discretion  which  the  law  recognizes  to  compound 
doubtful  and  dangerous  debts  in  cases  where  the  safety 
and  interest  of  the  fund  demanded  such  action.  "  It 
confers  upon  the  assignee,"  said  Finch,  J.,  "no  unlawful 
or  arbitrary  power,  and  takes  away  from  the  creditors  no 
just  protection."2  On  the  other  hand,  the  power  given 
in  the  assignment  to  the  assignee  to  compromise  with 
creditors,  is  held  to  restrain  the  creditors  until  the  attempt 
to  compromise  is  made.  Thus  they  would  be  hindered, 
and  a  delay  even  for  a  single  day  would  be  fatal  to  the 
assignment,  and  whether  the  delay  was  directed  by  the 
instrument,  or  justified  by  its  provisions,  or  made  neces- 
sary in  the  execution  of  its  provisions,  made  no  difference.3 

§  337-  Fraud  of  assignee.  —  The  fiduciary  character  of  his 
position  precludes  the  assignee  from  taking  any  advantage 
of  his  influence  as  such,  or  from  using,  for  purposes  of 
personal  gain  or  profit,  any  information  acquired  while 
acting  in  that   capacity.     Every  agreement  having  such 


1  Ginther  v.  Richmond,  18  Hun  (N.  assignment  to  prefer  creditors,  or  to 
y.)  234.  change  preferences  made  by  the  in- 

2  Coyne  v.  Weaver,  84  N.  Y.  391,  strument,  or  to  compromise  the  debts 
I  A  in.  Insolv.  Rep.  395;  S.  i'.,  McCon-  of  the  insolvent,  or  when  the  instrn- 
nell  v.  Sherwood,  84  X.  Y,  522  ;  Bag  ment  does  not  declare  the  uses  for 
ley  v.  Bowe.  105  X.  Y.  ITT,  11  N.  E.  which  the  property  was  assigned,  the 
Rep.  386.  assignment  is  fraudulent  and  there- 

McConnell  v.  Sherwood,  81  X.  V.  fore  void."    Citing  Caton  v.  Mosely, 

531.      In    Noyes    v.    Sanger   Bros.,   8  25  Tex.  375 ;    Home  v.  Chatham.  <il 

Tex.   Civ.     \pp.    393,   21  S.    W.   Rep.  Tex.  36 ;  McConnell  v.  Sherwood,  si 

L022,  the  court  says  :  ««  We  think  il  is  X.  V.   522;   Grover  \.   Wakeman,   11 

the  law,  thai  when  an  assignee  of  an  Wend.  (N.  Y.)  203, 
insolvent  debtor  lias  power  under  the 


^  337  FRAUD    i  IF    VSSIGNE]  ,  501 

an  object  in  view,  made  with  the  assignors,  or  with  an) 
of  the  creditors,  especially  if  not  approved  by  and  com- 
municated to  all  the  parties  in  interest,  is  looked  upon 
by  the  courts  with  great  suspicion  and  distrust,  and  if 
tainted  with  the  slightest  evidence  of  fraud,  concealment, 
or  misconduct  on  the  part  of  the  assignee  in  its  procure- 
ment, will  be  set  aside  as  inequitable  and  unjust,  and  he 
will  not  be  permitted  to  reap  any  personal  ad  wantage 
from  it.1  The  fact  of  his  having  an  interest  conflicting 
with  his  duties  as  assignee,  is  a  sufficient  ground  for 
removal 2 

An  assigment  honestly  made  for  a  lawful  purpose  can- 
not be  defeated  by  proof  that  the  assignee  abused  his 
trust,  misappropriated  the  property,  or  acted  dishonestly 
in  its  disposal.3  Where  the  assignee  is  guilty  of  neglect 
or  misfeasance,  the  creditor  feeling  aggrieved  should 
apply  to  the  court  for  a  compulsory  accounting,4  or  seek 
his  removal,  and  secure  the  appointment  of  a  new  trustee 
or  assignee.5  Brown,  J.,  said,  in  Olney  v.  Tanner  :!1  "If 
an  assignment  is  legally  complete  and  perfect,  and  is 
intended  to  devote,  and  does  devote,  all  the  debtor's 
property  to  the  payment  of  his  debts,  it  cannot  be  invali- 
dated through  the  subsequent  remissness  or  inefficiency 
of  the  assignee.  Creditors  have  ample  remedy  against 
the  assignee  for  his  misconduct,  if  any  ;  and  they  should 
be  held  to  these  remedies,  rather  than  be  allowed  to  sub- 
vert the  assignment  on  the  claim  that  such  remissness  is 


1  Clark    v.  Stanton,   24    Minn.  232,  *  Shattuck     v.     Freeman,     1      Mel 

1  Am.  Insolv.  Rep.  86.     See  Failey  v.  (Mass.)  15. 

Stockwell,  12  Pa.  Co.  Ct.  Rep.  403.  ft  Olney  v.  Tanner,  10  Fed.  Rep.  1  15. 

a  Brown   v.  Armstrong,  18  R.  I.  537.  Compare  Glenny  v.  Langdon,  98  ' 

3  Cuyler   v.  McCartney,   40  N.   Y.  29,  and  cases  cited  ;  Benfield  v.  Solo- 

237;  Olney   v.   Tanner,   10  Fed.  Rep.  raons,  9  Ves.  83;  Matter  of  Cohen,  78 

114,   115;  Eieks  v.  Copeland,  53  Tex.  N.  Y.  248,    1  Am.  [nsolv.  Rep.  221. 

5S1.     But  see  Kelley-Goodfellow  Shoe  610Fed.  Rep.  114,  115. 

Co.  v.  Scales,    12   iT.   S.  App.  01m,  58 

Fed.  Rep.  161,  7  C.  C.  A.  140. 


5  9^ 


INCOMPETENCY    OF   ASSIGNEE. 


§338 


an  evidence  of  original  fraudulent  intent."  l  On  the  other 
hand,  if  the  assignment  is  set  aside  as  fraudulent,  the  acts 
of  the  assignee,  performed  in  good  faith  in  the  execution 
of  the  trust,  will  not,  as  elsewhere  shown,  be  disturbed ; 
whether  the  assignment  be  fraudulent  in  fact  or  construct- 
ively so,  the  assignee  will  not  be  held  to  account  for  the 
property  or  its  proceeds  which  have  been  paid  out  by  him 
in  good  faith.2 

§  338.  Ignorance  or  incompetency  of  assignee  as  badge  of 
fraud. — The  selection  of  an  incompetent  assignee  is 
regarded  in  the  law  as  a  badge  of  fraud.3  Blindness  in 
the  assignee  is  considered  an  indicium  of  fraud  on  the 
part  of  the  assignor  who  selects  him.4  So,  choosing  an 
insolvent  assignee  has  been  said  to  be  prima  facie  evi- 
dence of  an  intent  to  defraud  ; 5  as  is  the  selection  of  an 
assignee  unfit  to  attend  to  business  by  reason  of  a 
lingering  disease.6  It  was  with  much  doubt  and  hesita- 
tion that  entire  latitude  in  the  selection  of  the  trustee  or 


1  Citing  Hardmann  v.  Bowen,  39  N. 
Y.  200  ;  Shultz  v.  Hoagland,  85  N.  Y. 
465. 

2  Smith  v.  Craft,  11  Biss.  351  ; 
Wakeinan  v.  Grover,  4  Paige  (N.  Y.) 
23  ;  Knower  v.  Central  Nat.  Bank, 
124  N.  Y.  552,  27  N.  E.  Rep.  247; 
Sullivan  v.  Miller,  106  N.  Y.  643,  13 
N.  E.  Rep.  772  ;  Ames  v.  Blunt,  5 
Paige  (N.  Y.)  13.  In  Pennsylvania 
the  assignment  vests  the  title  although 
the  assignee  may  be  ignorant  of  the 
assignment  ;  it  is  valid  whether  the 
assignee  accepts  the  trust  or  not,  for 
a  trust  will  not  fail  for  want  of  a 
trustee  (Mark's  Appeal  H5  Pa.  St. 
281  :  sub  imin.  First  Nat.  Bank  v. 
Holmes,  1  Am.  [nsolv.  Rep.  150.  See 
Johnson  v.  Herring.  40  Pa.  St.  415 ; 
Blight  \.  Schenck,  10  Pa.  St.  285), 
but  in  New  York  the  trust  must  be 
assented     to,     ami      the     instrument 


acknowledged  by  the  assignee. 
Rennie  v.  Bean,  24  Hun  (N.  Y.)  123, 
1  Am.  Insolv.  Rep.  420  ;  Hardmann 
v.  Bowen,  39  N.  Y.  196 ;  Britton  v. 
Lorenz,  45  N.  Y.  51.  If  a  party 
allows  his  name  to  be  used  in  a  fraud- 
ulent assignment  and  suffers  the 
property  to  be  squandered  he  may  be 
compelled  to  account  to  creditors. 
Hughes  v.  Bloomer,  9  Paige  (N.  Y.) 
269. 

3  Guerin  v.  Hunt,  6  Minn.  395. 

4  See  Cram  v.  Mitchell,  1  Sandf. 
Ch.  (N.  Y.)252. 

5  Reed  v.  Emery,  8  Paige  (N.  Y.) 
417.  But  in  some  States  the  court 
may  uphold  the  deed  and  appoint  a 
receiver  to  carry  it  into  effect.  Cohn 
v.  Ward,  32  W.  Va.  34.  9  S.  E.  Rep. 
41. 

8Currie    v.  Hart,   2  San. If.  Ch.  (N. 


§338 


[NCOMPETENCY    <  >F    ASSIGN  I  I  . 


assignee  was  confided  to  the  debtor,1  and  the  insolvent 
having  the  choice  of  his  own  assignee,8  without  consulta- 
tion with  or  consent  of  his  creditors,  must  see  to  it  that  he 
appoints  a  person  competent  to  protect  the  rights  of  all 
parties  interested  under  the  assignment.  If  it  appears 
that  the  selection  of  an  incompetent  assignee*  was  made 
in  order  to  allow  the  assignor  to  control  the  administra- 
tion of  the  estate,  then  the  assignment  will  be  avoided, 
because  such  an  intent  would  be  a  fraud  upon  creditors  B 
Where  the  assignee,  however  is  selected  without  any 
improper  motive,  and  proves  incompetent,  he  may  be 
removed  upon  a  proper  application,  and  a  suitable  person 
substituted  by  the  court  to  carry  out  the  trust.4  The 
words  "misconduct"  and  "  incompetency,"  as  used  in  the 
New  York  statute  relating  to  the  removal  of  an  assignee, 
are  construed  to  have  no  technical  meaning,  but  were 
intended  to  embrace  all  the  reasons  for  which  an  assignee 
ought  to  be  removed.5 


1  See  Cram  v.  Mitchell,  1  Sandf. 
Ch.  (N.  Y.)  253. 

2  See  Burr  v.  Clement,  9  Col.  1,  9 
Pac.  Rep.  633. 

3  In  Davis  v.  Schwartz,  155  U.  S. 
638,  15  S.  C.  Rep.  237,  the  court  says : 
"The  fact  that  the  assignee  or  the 
preferred  creditor  of  an  insolvent 
debtor  is  a  relative  or  intimate  friend 
is  doubtless  calculated  to  excite  sus- 
picion ;  yet  in  reality  there  is  nothing 
unnatural  in  a  dealer  or  trader  who 
is  in  need  of  credit,  or  a  loan  of 
money  to  carry  on  his  business,  first 
applying  to  his  relatives  for  such 
loans,  and  if  the  evidence  be  undis- 
puted that  the  money  was  advanced, 
the  fact  that  the  persons  making  the 
loan  are  relatives,  ought  not  to  debar 
them  from  receiving  security.  Their 
rights  are  neither  increased  nor  di- 
minished by  the  fact  of  relationship." 
Citing  Magniac  v.  Thompson,  7  Pet. 

38 


348  ;  Prewit  v.  Wilson,  103  U.  S.  '-"J  ; 
Estes  v.  Gunter,  122  U.  S.  450,  7  8  I 
Rep.  1275;  Bean  v.  Patterson,  122  U. 
S.  496,  7  S.  C.  Rep.  1298 ;  Garner  v. 
Second  National  Bank,  151  U.  S.  120, 
432,14  S.  C.  Rep.  390:  Aulman  v. 
Aulman,  71  Iowa  124,  32  N.  W.  Rep. 
240. 

4  See  Guerin  v.  Hunt,  0  Minn.  395. 

B  Matter  of  Colin.  78  N.  V.  248,  1 
Am.  Insolv.  Rep.  223.  As  to  the 
effect  of  the  selection  of  an  incompe- 
tent assignee,  see  Jennings  v.  Pren- 
tice, 29  Mich.  421  ;  Connah  v. 
Sedgwick,  1  Barb.  (N.  Y.)  210; 
Shryock  v.  Waggoner,  28  Pa.  St.  430  ; 
Shultz  v.  Hoagland,  85  N.  Y.  4*14  ; 
Baldwin  v.  Bucklaud,  11  Micl 
Matter  of  Cohn,  7s  N.  V.  18,  12  Am. 
Insolv.  hep.  221  ;  Montgomery  v. 
Kirksey,  26  Ala.  172  ;  White  v.  Davis, 
48  N.  J.  Eq.  22,  21  Ail.  Rep.  1-7  : 
Burrill  on  Assignments,  ?!  92.     The 


594  ASSIGNMENTS.  §  339 

In  Bachrack  v.  Norton,1  Mr.  Justice  Bradley  said  : 
"  Independently  of  a  statute  on  the  subject,  we  do  not  see 
why,  as  a  mere  matter  of  law,  an  assignment  should  be 
held  void  because  the  assignee  is  not  a  citizen  or  resi- 
dent of  the  State  where  the  assignment  is  made  and  the 
debtor  resides,  provided  he  complies  with  the  conditions 
prescribed  by  the  law.  A  citizen,  or  resident  of  another 
State  may,  in  a  particular  case,  be  a  very  proper  assignee. 
A  large  part  of  a  debtor's  assets  may  be  located  in  a  State 
other  than  that  in  which  he  resides." 

§  339  Transfers  inuring  as  assignments. — Preferences  in 
the  absence  of  a  bankrupt  act  are  usually  upheld,  though 
avoided  by  the  statutory  system  prevailing  in  some  parts 
of  the  Union.  A  curious  policy  exists  upon  this  subject 
in  some  of  the  States.2  Thus  in  Alabama  it  is  said  to  be 
a  settled  proposition  of  law  that  a  mortgage  or  deed  of 
trust  which  conveys  substantially  all  the  debtor  s  pi'opcrty 
for  the  security  of  one  or  more  particular  creditors  to  the 
exclusion  of  others,  the  intention  of  which  is  to  give  a 
preference  or  priority  of  payment  to  the  former,  operates 
as  a  general  assignment  under  the  statute,  and  inures  to 
the  benefit  of  all  the  creditors  equally.3  In  Illinois  there 
has  been  much  confusion  upon  this  feature  of  the  law.4    It 


facl    thai    the    assignee    is    required  riage  Works  v.  Ward,    101   Ala.  670, 

to   give  a   bond    will   not  relieve  the  14  So.  Rep.  417. 

assignor  from  the  exercise  of  prudence  4  White   v.   Cotzhausen,    129  U.  S. 

in   his  selection.     Hohnberg  v.  Dean,  329,  9  S   C.  Rep.  309  ;  Weber  v.  Mick, 

21  Kan    7Z,  131    111.    520,    23  N.  E.  Rep.  046;  Far- 

'  132  U.  S.  339,  10  S.  C.  Rep.  106.  well   v.    Nilsson,    133  Til.  45,  24  N.  E. 

!  See   Wymaii    v.  Mathews,  53  Fed.  Rep.   74.      See  Tompkins  v.    Hunter, 

Rep.    678;  Kiser   v.   Dannenberg,  88  149   X.   Y.    126,    43   N.   E.    Hep.   532: 

Ga.  541,  15  S.  K.  Rep.  17.  Kellog   v.   Richardson,   19  Fed.  Rep. 

'Shirley  v.  Teal,  ff;  Ala.  451  ;  Code.  70,   72;  Martin    v.    Hausman    14  Fed. 

Ala.    (1876).   g   2126;  Warren  v.  Lee,  Rep.   160 ;  Freund    v.    Vnegennan.  26 

32  Ua.  11";  Stetson  v.  Miller, 36 Ala.  Fed.   Rep.  812,  si  1  ;  Perry  \.  Corby, 

642;   Fairfield   Packing    Co.    v.    Ken-  21    Fed.    Rep.  737 ;  Clapp  v.  Dittman, 

tuckj    Jeans   Clothing   Co.     110  Ala.  21    {■'<•<].   Rep.  15;  Kerbs  v.  Ewing,  23 

.-,::•;.   20  So.    Rep.   6:;:     AJiniston   Car-  Fed.    Rep.   61)3:  Stout   v.    Watson,  19 


§  339a  CONFLICTING    i    \-l.s. 

is  held  in  Mississippi  that  "any  assignment  thai  purports 
to  convey  only  specific  property  must  be  treated  as  a 
partial  assignment  until  the  contrary  be  shown.  But,  if  it 
be  clearly  shown  that  in  fact  it  does  convey  all  of  the 
assignor's  property  liable  for  his  debts,  then  it  become 
general  assignment,  regardless  of  its  terms,  and  must  be 
so  dealt  with."1  In  New  Jersey  several  separate  instru- 
ments may  be  construed  together  as  constituting  an 
assignment  and  declared  void  as  creating  a  preference. ~ 
A  mortgage  given  by  way  of  preference  immediately 
preceding  an  assignment  will  be  construed  as  part  of  one 
transaction,  and  if  equality  of  distribution  does  not  result 
the  transaction  will  not  stand  in  Florida.3  In  Colorado 
conveyances  made  prior  to  an  assignment  for  creditors, 
and  in  fraud  of  it,  will  not  operate  to  invalidate  the 
assignment,  but  the  assignee  may  recover  the  property  so 
fraudulently  conveyed.4  In  New  York,  however,  it  was 
held  that  a  specific  assignment  of  property  by  a  debtor 
for  the  benefit  of  one  or  a  portion  of  his  creditors  did  not 
come  within  the  provisions  of  the  assignment  act  of  that 
State,  and  was  not  void  by  reason  of  its  not  being 
executed  in  compliance  with  the  provisions  of  the  assign- 
ment act.5 

§  339a.  White  v.  Cotzhausen,  and  conflicting  cases.  —  The 
decision  of  the  Supreme  Court  of  the  United  States  in 
White  v.  Cotzhausen6  to  the  effect  that  a  preferential 
transfer  by  an  insolvent  debtor  of  substantially  his  entire 
estate,  with  a  possible  view  to   evade   the   provisions   of 


Ore.  251,  24  Pac.  Rep.  230.      See  also  4  Cleghorn  v.   Sayre,  22  Col.  100,45 

§  339a.  Pac.  Rep.  370. 

1  Newman  v.  Black,  73  Miss.  244,  18  6  Royer  Wheel  Co.  v.  Fielding,  101 

So.  Rep.  543.  N.  Y.  504. 

2Stites  v.  Champion,  49  N.J.  Eq.  6 129  U.  S.   329,  9  B.   C.    Rep.  309. 

446,  24  Atl.  Rep.  403.  Compare  South   Branch    Lumber  Co. 

"Armstrong   v.    Holland,    35   Fla.  v.   Ott.   142  U.  S.   629,  12  S.  C    Rep. 

160,  17  So.  Rep.  366.  318. 


596  CONFLICTING  CASES.  §339^ 

the  State  Assignment  Act  operates  as  an  assignment,  has 
resulted  in  much  controversy  over  insolvent  estates. 
The  decision  purports  to  follow  Illinois  decisions,  but 
has  been  repudiated  in  that  State,1  and  there  is  a  tendency 
not  to  regard  it  as  a  controlling  authority. ~  In  a  later 
case  Mr.  Justice  Brewer  said:  "Several  instruments 
executed  by  a  debtor,  at  about  the  same  time,  may  be 
considered  as  parts  of  one  transaction,  and  in  law  form- 
ing but  one  instrument  ;  and  if,  as  thus  construed,  they 
have  the  effect  of  a  general  assignment  with  preferences, 
they  are  within  the  denunciation  of  the  statute,"  8  providing 
that  no  general  assignment  for  the  benefit  of  creditors 
shall  be  valid  unless  made  for  the  benefit  of  all  creditors 
in  proportion  to  their  respective  claims.  The  attempts 
to  construe  meanings  into  these  instruments,  which  were 
probably  not  in  the  contemplation  of  the  parties  at  the 
time  such  instruments  were  executed,  have  not  been 
uniformly  fortunate. 

The  case  of  White  v.  Cotzhausen  4  was  not  followed  in 
Tompkins  v.  Hunter.5  In  the  latter  case  the  insolvent 
made  a  preferential  transfer  by  bill  of  sale  of  all  his  prop- 
erty to  one  creditor.  A  technical  general  assignment  was 
not  made  and  the  court  refused  to  construe  the  transfer 
to  the  preferred  creditor  so  as  to  convert  it  into  a  general 
assignment.  Martin,  J.,  said  :  "  There  is  a  broad  and 
well  defined  distinction  between  such  an  assignment 
and  a  deed  or  bill  of  sale.      The  former  is  a  transfer  by  a 


1  Weber  v.  Mick.  131   111.  520.  23  N.  Har.lt  v.  Heidweyer,  152  U.  S.  556,  14 

E.  Rep.  646;  Yoang  v.  Clapp,  117  111.  S.  C.  Rep.  671. 

184,  32  N.    E.    Rep.   1ST,  35   Ed.  372;  3  South  Branch  Lumber  Co.  v.ott. 

FarweLl  v.  Nilsson,  133  Ell.  45,  24  N.  142U.S  622,  629.12S.C.  Rep.  318,  fol- 

E.  Rep.    74.     Compare  Tompkins  v.  lowing  Van  Patten  v.  Burr,  52  Eowa 

Hunter.   1  19  N    Y.  126,  43  \.  E.  Rep.  518,  3  N.  W.  Rep.  524.     See  Ellison  v. 

Moore  v.  Meyer,  47  Fed.  Rep.  99;  Moses,  95  Ala.  321,  n  So.  Rep.  347. 

I  l.i  1  -  it  \.  Heidweyer,  152  CJ.  S.  556,  I  I  4  129  EJ.  s  329,  9  s.  C.  Rep.  309. 

Rep.  671.  1  1  lit    N.    Y.    117,    13    N.    E.    Rep. 

:  Moore  v.  Meyer,   17  Fed.  Rep.  (.t!) ;  532. 


§  339a  CONFLICTING    I  ASKS. 


debtor  of  his  property  to  another  in  trust  to  sell,  convert 
it  into  money,  and  distribute  the  proceeds  among  his 
creditors.  It  implies  a  trust,  and  contemplates  the  inter, 
vention  of  a  trustee.  The  others  import  an  absolute  sale 
and  transfer  of  the  title,  to  be  held  and  enjoyed  by  the 
purchaser  without  any  attending  trust."  In  Berger  v. 
Varrelmann  *  the  court  decided  that  a  preferential  con- 
fession of  judgment  followed  by  a  general  assignment  was 
voidable  under  the  statute  of  1887,  prohibiting  prefer- 
ences in  excess  of  a  particular  portion  of  the  estate, 
and  the  same  rule  was  followed  in  Spelman  v.  Frerd- 
man.-  The  cases  were  followed  in  later  decisions 
where  the  confession  was  a  part  of  the  scheme  which  was 
to  culminate  in  a  general  assignment  and  hence  was 
within  the  prohibition  of  the  assignment  act.3  In  Man- 
ning v.  Beck4  the  court  says:  "  But  the  statute  does  not 
and  was  not  intended  to  prevent  a  creditor  from  obtaining 
payment  of  or  a  security,  and  thereby  a  preference  for  his 
debt,  even  from  an  insolvent  debtor."  The  court  further 
adds  :  "  The  debtor  might  also  neglect  to  make  an  assign- 
ment and  then  it  would  look  as  if  the  acts  of  preference 
would  be  legal."  In  Central  Nat.  Bank  v.  Seligman,5 
/indrews,  Ch.  J.,  said  :  "  If  no  assignment  had  been  made 
the  judgments  could  not  have  been  assailed  by  the  other 
creditors."  It  results  from  these  decisions  that  in  some  of 
the  States  at  least  the  danger  of  forfeiting  a  prefer- 
ence is  avoided  in  cases  where  the  insolvent  omits  to 
follow  up  the  preferential  act  by  making  a  voluntary 
assignment. 


1  127  N.  Y.  281,  27  N.  E.  Rep.  1065.  Hardware  Co.   v.  Implement  Co.,  47 

2  130  N.  Y.  421,  29  N.  E.  Rep.  705.  Kan.  423,  28  Pac.  Rep.   171  ;  Watkina 

3  See  Manning  v.  Beck,    129    N.   Y.  Nat.    Bk.    v.   San. Is.   47   Kan.    59 
1,    29  N.    E.    Rep.    90;   Central   Nat.  Pac.  Rep.  618. 

Bank  v.  Seligman,  138  N.  Y.  435,    34  4  129   N.  Y.  14.  16,  29  N.  E.  Rep.  90. 

N.  E.  Rep.  196  ;  Abegg  v.  Bishop,  142  8  138  N.  V     135,    445,  34  N.  E.  Rep. 

N.  Y.  286,  36  N.   E.   Rep.   1058.    See  196. 


598  ASSETS   EXCEEDING   LIABILITIES.  §  34-0 

§  340.  Assets  exceeding  liabilities. — The  question  often 
arises  as  to  what  classes  of  persons  are  entitled  to  make 
assignments.  Where  it  is  clear  that  the  assets  are  largely  in 
excess  of  the  liabilities  of  the  debtor,  it  may  raise  a  presump- 
tion of  an  intent  to  hinder  and  delay  creditors  in  the  collec- 
tion of  their  just  demands,  and  amount  to  2Lprt7>ia  facie  case 
of  fraud.1  In  the  Missouri  Court  of  Appeals  an  assign- 
ment which,  after  reciting  that  the  assets  amounted  to 
three  times  the  liabilities,  clothed  the  trustees  with  dis- 
cretionary power  to  carry  on  the  business  of  the  firm  "  for 
such  time  as  the  trustees  shall  deem  for  the  best  interest 
of  the  creditors,  and  necessary  for  the  purpose  of  pre- 
venting shrinkage  and  loss,  and  of  closing  out  and  liqui- 
dating the  same  to  the  best  advantage,"  was  declared 
voidable  as  tending  to  hinder,  delay,  and  defraud  cred- 
itors.2 It  is  sometimes  contended  that,  as  assignments 
for  the  benefit  of  creditors  are  generally  made  by  embar- 
rassed and  insolvent  debtors,  such  dispositions  of  prop- 
erty can  only  be  made  by  that  class  of  persons.  "  This 
doctrine,"  said  Comstock,  J.,  "has  no  foundation  in 
principle  or  authority.  These  assignments  are  in  their 
nature  simply  trusts  for  the  payment  of  debts.  The 
power  to  create  such  trusts  is  certainly  not  peculiar  to 
insolvent  men.  On  the  contrary,  it  is  a  power  more 
unquestionably  possessed  by  men  who  are  entirely  solvent. 
.  .  .  .  This  right  of  disposition,  on  general  principles  of 
law  and  justice,  was  never  doubtful  except  in  case  of  a 
debtor's  inability  to  meet  his  engagements.  In  that  con- 
dition the  claims  of  creditors  are  in  justice  paramount, 
and  the  debtor's  power  to  dispose  of  his  estate,  even  for 
their  benefit,  was  not  established  without  a  struggle.  In 
short,  it  was  the  insolvency  rather  than  the  solvency  of  a 


1  Livermore  v.    Northrup,  44'N.  Y.  -First     Nat.    Bank  v.    Hughes,    10 

109  ;  Guerin    v.    Hunt,    8    Minn    477.       Mo.  App.  14. 
See  Bates  v.  Ableman.  Y-)  Wis.  644. 


§  341  ASSIGNMENTS    L'O    PREVENT    PRE]  ERENCE. 


debtor  which  suggested  the  doubt  in  regard  to  the  right 
of  putting  the  whole  or  any  part  of  his  property  in  trust 
for  the  benefit  of  creditors."1  As  gathered  from  the 
authorities,  the  vital  question  in  these  cases  is,  whether 
the  transfer  is  honestly  made  with  the  sole  intention  of 
applying  the  property  in  satisfaction  of  the  creditor,' 
demands,  or  whether  it  is  merely  a  scheme  or  contrivance 
to  place  the  debtor's  estate,  for  a  time,  beyond  the  reach 
of  the  creditors'  remedies,  prevent  a  sacrifice  of  the 
property,  secure  the  payment  of  the  creditors'  claims, 
and  ultimately  realize  a  surplus  to  the  assignor.  In  the 
latter  case  it  should  clearly  be  regarded  as  a  plan  devised 
to  hinder  and  delay  creditors.  Resort  by  a  solvent  man 
to  the  methods  devised  for  insolvents  is  justly  calculated 
to  arrest  attention  and  excite  the  most  searching  inquiry 
as  to  hidden  motives. 

§  341.  Assignments  to  prevent  preference.  — According  to 
the  doctrine  of  the  common  law,  the  validity  of  an  assign- 
ment  cannot  be  assailed  simply  because  its  effect  is  to 
prevent  a  party  from  obtaining,  by  judgment  and  execu- 
tion, a  priority  and  preference  over  other  creditors2 
Temporary  interference  with  particular  creditors  in  the 
prosecution  of  their  claims  by  the  ordinary  legal  remedies, 
is  a  necessary  and  unavoidable  incident  to  a  just  and 
lawful  act,  which,  however,  in  no  respect  impairs  the 
validity  of  the  transaction.3  The  rule  of  equity  requires 
the  equal  and  ratable  distribution  of  the  debtor's  prop- 
erty for  the  benefit  of  all  his  creditors.  It  would  be 
strange  indeed  if  the  debtor,  by  making  a  disposition  of 
his  property  with  the  design  to  effectuate  the  application 
of  this  rule,  should  be  adjudged  guilty  of  hindering  and 
delaying   his   creditors.      This  precise   question   arose  in 

1  Ogden  v.  Peters,  21  N.  Y.  24.  Mayer  v.  Helhuan,  91  U.  S.  500. 

5  Reed  v.   Mclntyre,  98   U    S.  510 
See  Chap.  XXV. 


6(X)  ASSIGNMENTS   TO    PREVENT    PREFERENCE.  §  341 

Pickstock  v.  Lyster.1  In  that  case  a  debtor,  being  sued, 
made  an  assignment  by  deed  of  all  his  effects,  for  the 
equal  benefit  of  his  creditors.  The  jury  having  been 
instructed  that  they  must  find  the  deed  void  if  made  with 
the  intent  to  defeat  the  plaintiff  in  his  execution,  returned 
a  verdict  in  his  favor.  But  the  verdict  was  set  aside  upon 
the  ground  that  the  jury  was  misdirected.  Lord  Ellen- 
borough  held  that  the  assignment  was  "to  be  referred  to 
an  act  of  duty  rather  than  of  fraud,  when  no  purpose  of 
fraud  is  proved.  The  act  arises  out  of  a  discharge  of  the 
moral  duties  attached  to  his  character  of  debtor,  to  make 

the  fund  available  for  the  whole  body,  of  creditors 

It  is  not  the  debtor  who  breaks  in  upon  the  rights  of  the 
parties  by  this  assignment,  but  the  creditor  who  breaks  in 
upon  them  by  proceeding  in  his  suit.  I  see  no  fraud  ; 
tlfe  deed  was  for  the  fair  purpose  of  equal  distribution." 
In  the  same  case,  Bayley,  J.,  said:  "It  seems  to  me  that 
this  conveyance,  so  far  from  being  fraudulent,  was  the 
most  honest  act  the  party  could  do.  He  felt  that  he  had 
not  sufficient  to  satisfy  all  his  debts,  and  he  proposed  to 
distribute  his  property  in  liquidation  of  them  ;  this  was 
not  acceded  to,  for  the  plaintiff  endeavored  by  legal  pro- 
cess to  obtain  his  whole  debt,  the  obtaining  of  which 
would  have  swept  away  the  property  from  the  rest  of  the 
creditors."2  If  the  assignment  has  been  fairly  and  legally 
made,  and  creditors  obtain  a  benefit  from  it,  their  rights 
cannot  be  divested  by  proof  of  any  stratagem   practiced 


1  3  Maule  &  S.  :!7 1 .  only    object    and    consideration,    as 

•  See    Pike  v.   Bacon,    21   Me.   281  ;  stated    in    the    instrument,     was    to 

Hauselt  v.  Vilmar,  2  Abb.  N.  C.  (N.  defeat  the  liability  of  tbe  property  to 

Y.)  222,  affi'd  76  X.  Y.  680:  Baldwin  be   attached,    whereby   some  of   the 

v.  Peet,  22  Tex.  70S  ;  Bowen  v.  Bram-  creditors  might  obtain  an  unjust  pref- 

idge.  6  C.  &   !'.    140.     See   Solbird   v.  erence,  and  to  secure  it  to  be  applied 

Anderson,   5   T.    R.    235.     It    is   said,  for   the   benefit  of  all  the   creditors, 

however,  in  Dalton  v.  Currier,  40  N.  the  assignment  was  fraudulent  and 

II    246,  thai  as  the  avowed  purpose  void. 
and  aim  <>!'  tli^  assignment,  and  its 


§  34Ia  EXCESSIVE^PREFERENCES.  CHJ\ 

by  the  assignor  to  prevent  attachments  till  this  object 
could  be  secured.  If  no  attachments  were  issued,  even 
fraud  practiced  by  the  debtors  to  defeat  such  pro. 
would  give  the  creditor  no  lien  upon  the  property  ;  not- 
withstanding the  grossest  dishonesty  of  this  kind,  it  would 
remain  as  it  was;  and  so  long  as  it  continued  the  prop- 
erty of  the  debtors,  unaffected  by  any  attachments,  no 
fraudulent  conduct,  calculated  to  impose  upon  a  creditor 
and  keep  him  at  bay,  would  disqualify  the  debtor  from 
making  a  valid  assignment  under  the  statute  for  the 
benefit  of  creditors  generally.1  Fraud  or  misrepresenta 
tion  on  the  part  of  the  assignor,  entering  into  or  affecting 
the  debt  of  a  particular  creditor,  will  not  be  sufficient  to 
annul  a  general  assignment  in  favor  of  creditors.2 

Jaques  v.  Greenwood,3  constitutes  a  possible  excep- 
tion to  the  rule  above  stated.  A  judgment  had  been 
entered  against  the  members  of  a  firm  by  default ;  they 
secured  a  stay  of  proceedings  upon  pretence  of  a  defense 
to  the  action,  which  they  failed  to  show,  and  upon  an 
assurance  given  by  their  attorney  that  no  assignment 
would  be  made.  Meanwhile  a  preferential  assignment 
was  filed,  and  the  judgment-creditors  were  prevented 
from  realizing  anything  upon  execution  issued  on  the 
judgment.  The  assignment  was,  upon  this  state  of  facts, 
adjudged  to  be  made  to  hinder  and  delay  creditors  in  the 
collection  of  their  debts. 

§  341a.  Excessive  preferences.—  In  New  York  a  prefer- 
ence in  excess  of  the  amount  allowed  by  statute  does  not 
invalidate   the  instrument.4      Gray,  J.   said:    ''The   pur- 


1  Pike  v.  Bacon,  21  Me.  286.  3  12  Al»b.  Pr.  (N.  Y.    23  1. 

*  Kennedy  v.  Thorp.  51   N.  Y.  174;  4  Central    Nat.    Rank  v.   Seligman, 

Spencer  v.  Jackson,  2  R.  I.  35;  Lin-  138  N.    Y.  435,    34   X.    E.    Rep.  196; 

ingerv.  Raymond,  12  Neb.   19,  9  N.  Cutter   v.  Hume,  43  St.  Rep.  (N    ^ 

W.  Rep.  550;  Horwitz  v.  Ellinger,  31  242,    17   N.    V.   Supp.   255;     Rose    v. 

Md.  504.     But  compare  Waverly  Nat.  Renton,   37    St.  Rep.  (N.  Y.)  683,    13 

Bank  v.  Halsey,  57  Barb.  (N.  Y.)  249.  X.  Y.  Supp.  592. 


602  PREFERENCE   OF   LABORERS.  §  341b,  34IC 

pose  of  the  statute  is  to  prevent  any  preference,  other 
than  that  for  wages  or  salaries  of  employees,  beyond  one- 
third  of  the  assigned  estate,  and  if  that  amount  is 
exceeded,  the  penalty  is  not  the  annihilation  of  the  assign- 
ment, but  the  reduction  of  the  preference  to  the  pre- 
scribed limit.1  Where  that  is  the  condition  of  affairs  under 
a  general  assignment  of  the  debtor's  property,  the  remedy 
of  creditors  aggrieved  by  their  debtors' act  is  by  an  action 
in  aid  of  the  assignment  for  the  benefit  of  the  body  of 
creditors,  if  their  rights  are  not  asserted  by  the 
assignee.'12 

§  341b.  Preferences  of  laborers. —  In  New  York3  it  is 
provided  that  wages  and  salaries  due  employees  shall  in 
assignment  proceedings  be  preferred  before  any  other 
debt.  The  omission  to  prefer  such  debts  will  not  invali- 
date the  assignment,  as  the  instrument  will  be  read  in 
connection  with  the  statute.4 

§  341c.  Notice  to  preferred  creditor.  —  There  seems  to 
be  a  struggle  in  the  authorities  over  the  question  whether 
the  preference  given  in  anticipation  of  making  an  assign- 
ment may  be  avoided  in  all  cases,  or  whether  it  will  be 
avoided  only  in  cases  where  the  preferred  creditor  had 
knowledge  of  the  impending  assignment  and  knew  of  the 
debtor's  insolvency  at  the  time  of  receiving  the  preference. 
In  a  Pennsylvania  case5  this  language  is  used:  "Nor 
can  we  agree  that  a  mere  intent  of  a  debtor,  unexpressed 


1  Citing     Central     Nat.     Bank    v.  as  amended  by  Chap.   328,  Laws  of 

Seligman,    138  N.    Y.  435,   34  N.    E.  1884. 

Rep.  196.  4  Richardson  v.  Tlmrber,  104   N.  Y. 

4Maass  v.  Falk,  146  N.  Y.  40,  40  N.  606,    11   N.   E.    Rep.    133;   Burley    v. 

E.     Rep.     504.     Citing     Spelman    v.  Hartson,  109  N.  Y.  656,  16  N.  E.  Rep. 

Freedman,    130  N.    Y.    421,  29  N.  E.  684  ;  Roberts  v.  Tobias,  120  N.  Y.  5,  23 

Rep.     765;     Central    Nat.    Bank    v.  N.    E.    Rep.    1105 ;  Dutchess  County 

Seligman,    138   N.   Y.    435.   34  N.    E.  Mutual  Ins.  Co.  v.  Van  Wagonen,  132 

Rep.  196  ;  Abegg  v.  Bishop,  142  N.  Y.  N.  Y.  402,  30  N.  E.  Rep.  971. 

286,  36  N.  E.  Rep.  1058.  5  Lake  Shore   Banking  Co.  v.  Ful- 

*  See  Chap.  466,  Laws  of  1877,  §  29,  ler,  110  Pa.  St.  156,  1  Atl.  Rep.  731. 


§  34!C  NOTICE   TO    PREFERRED    CREDITOR. 

to  the  creditor,  to  give  him  a  preference  by  paying  or 
securing  the  debt,  although  at  the  time  he  contemplated, 
and  soon  after  executed,  a  general  assignment,  operated  to 
defeat  such  preference  on  the  ground  that  it  is  contrary 
to  the  act  of  1843.  Such  an  intent  is  not  unlawful  and 
cannot  be  inferred  from  a  proper  act.  But  even  if  it  were, 
the  creditor  who  has  a  perfect  right  to  accept  payment  or 
security  of  his  debt,  and  has  not  participated  in  the 
alleged  unlawful  intent,  should  not  be  compelled  to  forfeit 
his  preference  on  that  account.  He  at  least  is  innocent 
and  may  in  good  conscience  hold  the  advantage  he  has 
obtained."  The  New  York  Court  of  Appeals  followed 
this  case  in  Manning  v.  Beck.1  In  Berger  v.  Varrel- 
mann^it  is  intimated  that  a  want  of  knowledge  on  the 
part  of  the  creditor  of  the  debtor's  intention  to  prefer  him 
on  the  eve  of  an  assignment  will  not  save  the  preference. 
In  Spelman  v.  Freedman  3  the  preferred  creditor  mani- 
festly had  knowledge  of  the  insolvency  and  contemplated 
assignment,  and  his  preference  was  lost.  In  Central 
National  Bank  vr.  Seligman  4  the  preference  was  cut  down 
to  the  statutory  limit  of  one-third  of  the  estate,  but  the 
assignment  was  otherwise  sustained.  In  Maass  v.  Falk6 
the  preference  was  upheld,  as  it  appeared  that  the  cred- 
itor was  innocent  of  any  knowledge  of  the  impending 
assignment,  and  Manning  v.  Beck  6  was  followed.  These 
two  cases  are  recognized  and  re-stated  in  Galle  v.  Tode,' 
but  the  preferred  creditor  in  the  last  case  did  not  have  a 
valid  levy  and  the  preference  was  for  that  reason  lost. 
In   the  lower  courts  in    New  York8    various  conclusions 


1  129  N.  Y.  1,  15,  29  N.  E.  Rep.  90.  6  129  N.  Y.  1,  29  N.  E.  Rep.  90. 

3  127  N.  Y.  281,  27  N.  E.  Rep.  1065.  '  148  N.  Y.  270,  280,  42  N.  E.  Rep. 

3  130  N.  Y.  429   29  N.  E.   Rep.   765.  673. 

See  Warner  v.    LittlefieM,   89   Mich.  8  A.begg  v.  Bishop,  66  Hun  (N.  Y.) 

329,  50  N.  W.  Rep.  721.  8,  20  N.  Y.  Supp.  810  ;  reversed,   142 

4  138  N.  Y.  435,  34  N.   E.  Rep.  196.  N.  Y.  286.  36  N.  E.  Rep.  1058;  London 

5  146  N.  Y.  42,  40  N.  E.  Rep.  504.  v.  Martin.  79  Hun  (N.   Y.  i  239,  29  N  . 


604 


BILL   OF    PARTICULARS. 


§§  34id.  342 


have  been  formulated,  but  it  would  seem  to  be  the  pre- 
vailing idea  in  that  State  at  present,  that  an  innocent 
preferred  creditor  may  hold  his  advantage  as  against  a 
subsequent  voluntary  assignment. 

§  34id.  Bill  of  particulars.  —  As  already  shown,1  the 
courts  are  not  disposed  to  readily  grant  applications  for 
bills  of  particulars  of  the  alleged  fraudulent  acts  upon 
which  the  creditor  relies  in  attacking  an  assignment.2 

§  342.  Threatening  to  make  assignment.  —  Threatening 
to  make  a  voluntary  assignment  seems  to  constitute  no 
ground  for  provisional  relief  by  attachment  in  New 
York,3  provided  the  threat  is  not  to  make  a  fraudulent 
assignment.  "  An  unlawful  coercion  of  a  creditor,"  says 
Fullerton,  J.,  "cannot  be  predicated  of  the  declaration  of 
an  intention  by  a  debtor  to  do  what  the  law  sanctions  as 
right  and  proper."  4 


Y.  Supp.  396  ;  Johnson  v.  Rapalyea, 
1  App.  Div.  (N.  Y.)  463,  37  N.  Y. 
Supp.  540. 

1  See  §  162a. 

5  Passavant  v.  Cantor,  21  Abb.  N. 
C.  (N.  Y.)  259,  1  N.  Y.  Supp.  574. 

3  Kipling  v.  Corbin,  66  How.  Pr. 
(N.  Y.)  13  ;  Evans  v.  Warner,  21  Hun 
(N.  Y.)  574  ;  Dickerson  v.  Benham,  20 
How.  Pr.-(N.  Y.)343. 

4  Spaulding  v.  Strang,  37  N.  Y.  139; 
Davis  v.  Howard,  73  Hun  (N.  Y.)  347, 
26  N.  Y.  Supp.  194 ;  Farwell  v.  Fur- 
niss,  67  How.  Pr.  (N.  Y.)  188.  In 
the  case  of  National  Park  Rank  v. 
Wliitmore,  104  N.  Y.  305,  10  N.  E. 
Rep.  524,  Earl,  J.,  said:  "But  we 
think  there  were  sufficient  facts  set 
forth  in  the  affidavits  to  give  the  court 
jurisdiction  to  <k't ermine  whether  or 
not  the  defendants  in  threatening  to 
make  and  in  making  the  assignment, 
were  actuated  by  a  fraudulent  intent. 
A  few  days  before  the  assignment 
was  made   the  defendants  reported 


that  they  were  entirely  solvent  and 
could  pay  all  their  debts  in  full,  and 
they  made  a  statement  of  their  affairs 
showing  a  large  surplus  of  assets  over 
liabilities.  Soon  after  these  repre- 
sentations they  claimed  that  they 
could  not  pay  their  debts  in  full,  and 
that  they  were  insolvent,  and  pro- 
posed to  pay  their  creditors  a  compro- 
mise of  fifty  cents  on  the  dollar, 
payable  in  nine,  twelve  and  fifteen 
months  without  security.  The  evi- 
dence tended  to  show  that  they  had 
been  engaged  in  a  prosperous  busi- 
ness, yielding  them  large  profits,  and 
they  gave  no  satisfactory  or  intelligi- 
ble explanation  of  their  sudden  al- 
leged insolvency.  They  threatened 
that  unless  their  offer  of  compromise 
was  accepted  they  would  make  an 
assignment,  preferring  Whiting,  and 
that  then  the  rest  of  their  creditors 
would  get  little  or  nothing.  The 
efforts  of  the  defendants,  with  the 
co-operation   of    their  assignee  after 


§§  342a,  343  antecedent  agreement. 

On  the  other  hand,  there  are  cases  tending  to  supporl 
the  view  that  a  debtor  cannot  use  the  power  he  pn 
of  assigning  his  property  preferentially  to  intimidate 
creditors  into  abstaining  from  pressing  the  remedies 
allowed  by  law  to  collect  debts,  without  beim--  chargeable 
with  intent  to  defraud  creditors.1  In  Gasherie  v.  App 
the  court  observed  :  "The  law  allows  a  debtor  to  assign 
his  property  to  pay  his  debts,  and  even  to  make  prefer- 
ences ;  but  compels  him  to  make  his  selection  without 
any  conditions  for  personal  gain  to  himself ;  thus  he  can- 
not, by  an  assignment,  hold  out  a  hope  of  an  extra  share 
of  his  assets,  or  a  fear  of  loss  of  any  participation  therein 
as  a  means  to  induce  a  creditor  to  abandon  all,  or  any  part 
of  his  claim,  or  to  forbear  pursuing  his  legal  remedies 
therefor."     This  certainly  embodies  the  safer  rule. 

§  342a.  Antecedent  agreement.  —  As  elsewhere  shown,0' 
a  secret  agreement  to  prefer  a  creditor  is  not  fraudulent, 
and  such  a  preference  will  be  upheld.4 

§  343.  Construction  of  assignments.  —  In  construing  the 
provisions  of  a  general  assignment,  we  are  to  be  gov- 
erned by  the  rules  applicable  to  ordinary  conveyances.5 


the  assignment,  apparently  to  coerce  solvent,  to  coerce  a  favorable  conipro- 

a  compromise  of  twenty-five  cents  on  mise  from  their  creditors,  .and   thus 

the  dollar,   their  offer  'to  fix  it  up'  secure  a  benefit  to  themselves." 

with  a  creditor  afterward  if  he  would  '  See  Anthony  v.  Stype,  19  Hun  1  N . 

assent  to  the   compromise,  their  se-  Y.)  267;  Gasherie  v.  Apple,  14  Abb. 

lection  of  a  foreign  assignee,  the  rela-  Pr.  (N.  Y.)  64  ;  Livermore  v.  Rhodes, 

tions  between  him  and  them,  and  the  27  How.  Pr.  (N.  Y.)  0O6. 

secret  promise  of  a  future  preference,  '  14  Abb.  Pr.  (N.  Y.)  64,  68. 

are  also  pertinent  facts.     The  court  at  3  See  §  394. 

General  Term,  looking  at  no  one  fact,  *  National  Park  Bk.  v.   Whitmore, 

but  at  all  the  facts,  before  and  after  104  N.   Y.    304.  10   N.   E.    Rep.   524  . 

the  assignment,  could,  we  think,  find  Pierce  Steam  Heating  Co.  v.  Ransom, 

that  the  assignment  was  threatened  16  App.  Div.  (N.  Y.)  260. 

and  made  by  the  assignors,  not  solely  B  Townsend    v.   Stearns.    32   N.    V. 

for  the  honest  purpose   of  devoting  213;  Bagley   v.  Bowe,  105   N.  Y.  171, 

their  assets  to  the  payment  of  their  UN.  E.  Rep.  386;  Khappv.  MoGowan, 

just  debts,  but,  while  not  actually  in-  96  N.  Y.  75  ;  Crook  v.  Rindskopf,  105 


6o6 


CONSTRUCTION    OF    ASSIGNMENTS. 


§343 


Such  a  construction  should  be  adopted  as  will  sustain  the 
assignment,  rather  than  defeat  it,]  especially  if  the  effect 
of  overturning  the  instrument  by  reason  of  its  preferential 
surroundings  results  in  creating  a  preference  in  favor  of 
a  subsequent  attaching  creditor.2  Preferential  assign 
ments  are  not  usually  encouraged.3  The  law  tolerates 
rather  than  approves  such  instruments,  and  they  can  only 
be  supported  when  they  make  a  full  and  unconditional 
surrender  of  the  property  to  the  payment  of  debts.4  In 
Read  v.  Worthington,5  in  construing  a  general  assign- 
ment, the  court  said  :  "  There  are  three  general  rules  of 
interpretation,  which,  applied  to  this  case,  show  that  the 


N.  Y.  485,  12  N.  E.  Rep.  174  ;  Ginther 
v.  Richmond.  18  Hun  (N.  Y.)  234. 
Compare  Rapalee  v.  Stewart,  27  N. 
Y.  315. 

1  Roberts  v.  Buckley,  145  N.  Y. 
323,  39  N.  E.  Rep.  966. 

3  South  Branch  Lumber  Co.  v.  Ott, 
142  U.  S.  622,  12  S.  C.  Rep.  318. 

»  Nichols  v.  McEwen,  17  N.  Y.  24. 
See  Boardnian  v.  Halliday,  10  Paige 
(N.  Y.)  230. 

4  Griffin  v.  Barney.  2  N.  Y.  371. 

5  9  Bosw.  (N.  Y.)  626.  In  Crook  v. 
Rindskopf,  105  N.  Y.  485,  12  N.  E. 
Rep.  174,  Ruger,  Ch.  J.,  said  :  "While 
heretofore  there  has  been  some  diver- 
sity of  opinion  in  the  courts  in  respect 
to  the  proper  rule  to  be  applied  in  the 
construction  of  such  instruments,  we 
think  the  tendency  of  modern  de- 
cisions, especially  those  of  most  ap- 
proved authority,  has  been  to  adopt 
the  same  rules  which  obtain  in  the 
interpretation  of  other  contracts. 
(Knapp  v.  McGowan,  96  N.  Y.  75,  87  ; 
Rapalee  v.  Stewart,  27  N.  Y.  310,  315; 
Benedict  v.  Huntington,  32  X.  Y.  219; 
Townsend  v.  Steam-,  32  X.  Y.  209.) 
Among  those  rules  is  thai  requiring 
such  an  interpretation  as  will  render 
the  instrumenl  consistent  with  inno- 
cence, and  the  general  rules  of  law.  in 


preference  to  such  as  would  impute  a 
fraudulent  intent  to  the  assignor,  or 
defeat  the  general  purpose  and  intent 
of  the  conveyance.  (Bagley  v.  Bowe, 
105  N.  Y.  171,  11  N.  E.  Rep.  386  ;  Gin- 
ther v.  Richmond,  18  Hun  [N.  Y.J  232, 
234  ;  Rapalee  v.  Stewart,  27  N.  Y.  315  ; 
Benedict  v.  Huntington,  32  N.  Y. 
219  ;  Townsend  v.  Stearns,  32  N.  Y. 
209.)  Such  transfers  are  sanctioned 
by  law,  and  are,  when  made,  like 
other  contracts,  to  be  fairly  and  rea- 
sonably construed  with  a  view  of 
carrying  out  the  intentions  of  the 
parties  making  them.  When  au- 
thority to  do  an  act  is  conferred  in 
general  terms  it  will  be  deemed  to  be 
and  to  have  been  intended  to  be  ex- 
ercised within  the  limits  prescribed 
by  law.  (Kellogg  v.  Slauson,  11  N. 
Y.  302.)  In  such  cases,  as  in  others, 
doubtful  and  ambiguous  phrases  ad- 
mitting of  different  meanings,  are,  in 
accordance  with  the  maxim,  '  ut  res 
magis  valeat  gudm  pereat,''  to  be  so 
construed  as  to  authorize  a  lawful 
disposition  of  the  property  only,  al- 
though there  may  l>c  general  lan- 
guage  in  the  instrument  susceptible 
of  a  different  construction.  (Town- 
send  v.  Stearns,  32  N.  Y.  209.)" 


§343  CONSTRUCTION    OF    ASSIGNMENTS.  607 

intent  on  the  face  of  the  instrument  was  honest  to  cred- 
itors :  Firstly,  that  the  general  intent  of  the  parties  is  to 
govern  ;  secondly,  that  the  leaning  of  all  constructions 
should  be  in  favor  of  supporting,  and  not  overthrowing 
an  instrument;  and  thirdly,  that  fraud  is  not  to  be  pre- 
sumed,1 and  assignments  are  subject  to  no  different 
rules."2  Courts  are  therefore  under  no  obligation  tube 
astute  to  destroy  them,3  and  an  unreasonable  construction 
should  not  be  given  to  the  language  used  in  the  assign- 
ment to  render  it  void.4  The  scope  of  the  assignment  is 
to  be  gathered  from  the  whole  instrument,5  and  where 
two  constructions  are  possible,  that  is  to  be  chosen  which 
upholds  and  does  not  destroy  the  instrument."  "A 
court,"  said  Finch,  J.,  "  may  wrestle,  if  need  be,  with 
unwilling  words  to  find  the  truth  or  preserve  a  right 
which  is  endangered."  "  It  must  be  remembered  that  if 
a  general  clause  be  followed  by  special  words  which 
accord  with  the  general  clause,  the  deed  should  be  con- 
strued according  to  the  special  matter.8  The  case  may, 
however,  be  taken  out  of  its  operation  by  the  evident 
intent  of  the   parties   and  the  clearly  expressed   purpose 


1  Citing  Kellogg  v.  Slauson,  15  6  Price  v.  Haynes,  37  Mich.  487, 
Barb.  (N.  Y.)  56;  Kellogg  v.   Barber,  1  Am.  Insolv.  Rep.  137. 

14   Barb.     (N.    Y.)    11;    Barnum    v.  "Coyne   v.  Weaver,  84  X.   Y.  390. 

Hempstead.    7    Paige    (N.     Y.)    569  ;  See  Townsend  v.   Stearns,   32  N.   Y. 

Kuhlman  v.  Orser,  5  Duer  (N.  Y.)  250  ;  209  ;  Brainerd  v.  Dunning,  30    X.    Y. 

Bank  of  Silver  Creek  v.  Talcott,   22  211  ;  Campbell  v.  Woodworth,  24  X. 

Barb.  (N.  Y.)  5(51.     See  £§  5,  6.  Y.  304  ;   Benedict  v.   Huntington.  33 

2  Citing  Pine  v.  Rikert,  21  Barb.  N.  Y.  219  ;  Coffin  v.  Douglass,  61  T<  \ 
(N.  Y.)469.  406. 

3  See  Turner  v.  Jaycox,  40  Barb.  7  Coyne  v.  Weaver,  84  X.  Y.  390, 
(N.  Y.)  164  ;  affi'd,  40  N.  Y.  470.  Es-  1  Am.  Insolv.  Rep.  392.  A  voluntary 
pecially  Townsend  v.  Stearns,  32  N.  assignment  act  is  to  be  liberally  con- 
Y.  209;  Grover  v.  Wakeman,  11  strued.  White  v.  Cotzhausen,  129  U. 
Wend.  (N.  Y.)  193;  Kellogg  v.  S.  329,  9  S.  C.  Rep.  309,  and  cases 
Slauson,  11  N.  Y.  302.  cited. 

4  Whipple  v.  Pope,  33  111.  334;  Bank  8  Munro  v.  Alain  ,  2  I  laines  (N.  Y  | 
v.  Martin,  96  Tenn.  5,  33  S.  W.  Rep.  320.  See  Moore  v.  Griffin,  22  Me. 
565,  citing  the  text.  350;  Wilkes   v.    Ferris,   5  Johns 

Y.)  335. 


6o8  OBNOXIOUS    PROVISIONS.  §344 

of  the  deed.1  Thus  where  the  instrument  under  con- 
sideration is  a  general  assignment  of  all  the  property  and 
effects  of  the  assignor,  and  the  intent  to  place  all  the 
property  of  every  description  within  the  trust  is  apparent 
in  every  part  of  the  deed,  although  it  contain  a  reference 
to  a  schedule  of  the  assigned  affects  as  annexed,  this  will 
not  be  construed  as  indicating  an  intention  to  qualify  or 
limit  the  comprehensive  or  general  language,  and  prop- 
erty not  mentioned  in  the  schedule  will  pass  to  the 
trustee2  In  construing  assignments  the  rule  favoring 
constructions  "  ut  res  majis  valeat  quain  pa-cat"  must  be 
observed.3  In  Kansas,  it  is  said:  "It  is  the  creditors 
who  are  the  real  parties  beneficially  interested  in  the 
assignment.  Unless  it  is  apparent  that  they  are  to  be 
defrauded  the  assignment  should  be  upheld.''4 

^  344.  Explaining  obnoxious  provisions.  —  I  he  acts  relat- 
ing to  assignments  should  be  liberally  construed.5  When 
it  is  shown  that  the  obnoxious  provisions  of  the  deed 
were  not  made  deliberately,  understandingly,  or  even 
knowingly,  then  the  law's  presumption  of  the  intent  to 
defraud  is  rebutted.  The  reason  ceasing,  the  rule  ceases. 
In  an  inquiry  collateral  to  the  deed  it  is  competent  to 
show  by  parol  that  the  deed  was  made  in  its  objection- 
able form  by  the  mistake  of  the  scrivener,  and  without 
the  intention  and  knowledge  of  the  parties  to  it,  and  so 
to  rebut  the  presumption  of  fraud.0 

§  345.  Assignments  held  void.  — It  would  be  an  arduous 
task   to    collate    and    cite    the    numerous   cases    in  which 


1  Piatt  v.  Lott,  17  N.  Y.  478.  *  Marshall     v.    Van    De    Mark,   57 

>  Eolmes  v.  Hubbard,  60  N.  V.  185:  Kan.  310,  46  Pao.  Rep.  308. 

Turner  v.  Jaycox,  10  N.  Y.  470;  Emi-  ■■  Farwell  v.  Cohen,  138  111.  216,28 

-rant  [nd   siiv.  Bank  v.  Roche,  93  N.  N.  E.  Rep.  35,  32  1.1.  893. 

V.  377.  '  Farrow  v.  Hayes.  :.l  Md.  500,  501. 

*  Baum   v.   Pearce,  67  Mi<s.  Too.   7  See  Carpenter  v.  Buller,  8  M.  &  W. 

So.  Rep.  548  212;     Parks   v.    Parks,   19   Md.   323; 

Smith  v.  Davis,  49  Md.  470. 


§345 


A.SSIGNMEN  fS    HELD    V(  >||>. 


voluntary  assignments  have  been  overturned  al  the  in 
gation  of  creditors  or  their  representatives.  The  importanl 
features  of  some  of  the  cases  will,  however,  be  briefly 
noticed.  The  instrument  was  avoided  where  it  provided 
that  the  debtor  "  shall  have  the  privilege  of  continui 
his  business  for  one  year."1  In  fact,  it  may  be  regarded 
as  settled  that  any  reservation  of  benefit  to  the  grantor  is 
considered  fatal  to  the  transfer.2  Stipulating  for  pos 
sion  of  the  assigned  property,'1  and  providing  for  the 
payment  of  individual  debts  out  of  copartnership  assets,4 
are  additional  illustrations  of  obnoxious  provisions  which 
will  annul  the  instrument.5  So,  as  we  have  seen,  the 
instrument  is  rendered  void  by  intentional  omissions  of 
assets,6  and  the  insertion  of  fictitious  liabilities.7  Whether 
the  insertion  of  a  provision  for  the  continued  employment 
of    the   assignor  furnishes  some  evidence   of   fraudulent 


'Holmes  v.  Marshall,  78  N.  C.  262. 

*  Cheatham  v.  Hawkins,  76  N.  C. 
335  ;  Bigelow  v.  Stringer,  40  Mo.  195  ; 
Griffin  v.  Barney,  2  N.  Y.  371  ;  Leitch 
v.  Hollister,  4  N.  Y.  211  ;  Mackie  v. 
Cairns,  5  Cow.  (N.  Y.)  547  ;  Harris  v. 
Sumner,  2  Pick.  (Mass.)  129;  Marks 
v.  Bradley,  69  Miss.  1, 10  So.  Rep.  922  ; 
Burrill  on  Assignments,  §  343. 

3  Billingsly  v.  Bunce,  28  Mo.  547  ; 
Reed  v.  Pelletier,  28  Mo.  173  ;  Brooks 
v.  Wimer,  20  Mo.  503 ;  Stanley  v. 
Bunce,  27  Mo.  269.  See  Cheatham 
v.  Hawkins,  76  N.  C.  335  ;  Harman  v. 
Hoskins,  56  Miss.  142  ;  Joseph  v.  Levi, 
58  Miss.  843. 

4  Wilson  v.  Robertson,  21  N.  Y.  587; 
Schiele  v.  Healy,  61  How.  Pr.  (N.  Y.) 
73,  1  Am.  Insolv.  Rep.  417 ;  Roe  v. 
Hume,  72  Hun  (N.  Y.)  1,  25  N.  Y. 
Supp.  576  ;  Booss  v.  Marion,  129  N.  Y. 
541,  29  N.  E.  Rep.  832;  Haynes  v. 
Brooks,  116  N.  Y.  487,  22  N.  E.  Rep. 
1083:  Piatt  v.  Hunter,  11  Weekly 
Dig.  (N.  Y.)  300.     But  see  Crook  v. 

39 


Rinkskopf,  105  N.  Y.  476,   [2  X.   E. 
Rep.  174. 

5  An  assignment  is  invalid  as  a  con- 
veyance of  a,  debtor's  estate  under  t  lie 
insolvency  statutes  of  New  ?ori  (2  R. 
S.,  p.  16),  when  the  preliminary  pro- 
ceedings upon  which  it  is  based  are 
void.  Rockwell  v.  McGovern,  »'>'.»  N. 
Y.  294,  1  Am.  Insolv.  Rep.  59.  See 
Ely  v.  Cooke,  28  N.  Y.  365.  But  com 
pare  Striker  v.  Mott,  28  X.  Y.  90.  In 
such  a  case  the  only  beneficial  interest 
vested  in  the  assignee  is  thai  pre- 
scribed by  the  statute. 

6 Probst  v.  Welden,  !•',  Ark.  109  ; 
Shultz  v.  Hoagland,  85  N.  Y.  164; 
Waverly  Nat.  Bank  v.  i  I 
Barb.  (X.  Y.)  249  ;  White  v.  Benja 
min.  3  Misc.  (N.  Y.)497,  23N.  Y.  Supp. 
981,  affi'd  150  X.  Y.  258,  1 1  X.  E.  Rep, 
956;  Rothschild  v.  Salomon,  52  Hun 
(N.  Y.)486,  5  N.  V.  Supp.  865  .  Cour- 
sey  v.  Mmton.  132  X.  1  .  556,  30  N  E 
Rep.  231 ;  Craft  v.  Bloom,  59  Miss.  69 

'Talcotl  v.  Eess,31  Mm,  V  5 


6lO  ASSIGNMENTS    HELD   VOID.  §  345 

intent  is  a  point  as  to  which  the  authorities  differ.1  An 
attempt  to  restore  the  proceeds  of  property  fraudulently 
transferred  in  connection  with  an  assignment  will  not 
purge  the  fraud  in  the  instrument.2  An  assignment 
which  directs  a  disposition  of  property  different  from  that 
prescribed  by  statute  ;3  or  that  omits  creditors;  '  or  that 
is  immediately  preceded  by  a  gift  of  a  sum  of  money  to 
the  assignor's  wife  ; 5  or  that  reserves  a  sum  of  money  to 
be  used  by  the  assignor  in  purchasing  necessaries  for 
his  family,6  and  the  transaction  is  not  satisfactorily 
explained;7  or  that  gives  power  to  lease  or  mortgage  ;8 
or  that  directs  the  assignee  to  sell  the  assets  and  pay  the 
assignor  the  amount  of  his  exemptions;9  or  that  inten- 
tionally withholds  property  not  exempt ; 10  or  that  omits 
property;11  or  that  places  any  surplus  indefinitely  beyond 
the  reach  of  creditors;13  or  that  provides  for  the  payment 
of  attorney's  services  to  be  rendered  after  the  transfer;13 
or  that  retains  the  assignor  at  a  salary ; 14  or  that  prefers  a 
fictitious  debt ; 15  or  that  reserves  the  right  to  the  assignor  to 

1  Frank  v.  Robinson,  96  N.  C.  32,  1  8  Darling  v.  Rogers,  22  Wend.  (N. 
S.  E.  Rep.  781.  Cf.  Richardson  v.  Y.)  483 ;  Planck  v.  Scbermerhorn,  3 
Stringfellow,    100    Ala.    416,    14    So.      Barb.  Ch.  (N.  Y.)  644. 

Rep.  283.  ;|  King  v.  Ruble,  54  Ark.  118,  16  8. 

2  Friedburgher  v.  Jaberg,   20  Abb.      W.  Rep.  7. 

N.  C.  (N.  Y.)  279.  10  Penzel  Grocer  Co.  v.  William,  53 

3  Churchill  v.  Hill,  59  Ark.  54,    26      Ark.  81,  13  S.  W.  Rep.  736. 

S.  W.  Rep.  378.  "McMillan  v.  Knapp,  70  Ga.  171. 

4  Stunt  v.  Watson,  19  Ore.  251,  24  ''Gregg  v.  Cleveland,  82  Tex.  1S7, 
Pac.  Rep.  230.                                                17  S.  W.  Rep.  777. 

i  Chambers  v.  Smith,  60  Hun  (N.  13Norton  v.  Matthews,  7  Misc.  (N. 
Y.)24^,  14  N.  Y.  Supp.  706;  Roths-  Y.)  569,  28  N.  Y.  Supp.  265  ;  Brain- 
child v.  Salomon.  52  Hun  (N.  Y.)486,  erd  v.  Dunning.  30  N.  V.  211  :  Matter 
5  N.  Y.  Supp.  865.  Contra,  Estes  v.  of  Gordon,  49  Hun  (N.  Y.)  370,  3  N. 
Gunter,  122  U.  S.  450.  7  S.  C.  Rep.  Y.  Supp.  589  ;  Mattison  v.  Judd,  59 
1275.  Miss.  99;  Winfield  Nat,  Bk.  v.  Croco, 

•  Montgomery   v.  Goodbar,  69  Miss.  46  Kan.  (i.,,.).  20  Pac.  Rep.  942. 

333,    1:5  So.    Rep.    624;  Constable   v.  14 Stephens  v.    Regenstein,  89  Ala. 

Hardenbergh,   4   App.   Div.    (X.    Y.)  561,  8  So.  Rep.  68. 

L43,  38  N    Y.  Supp.  694.  >  Stafford  v.  Merrill,  62  Hun  (N.  1    1 

I  av    v.  Grant,  53  Hun  (N.  V  ill.  147,  Hi  N.  Y.  Supp.  467;  Bickham  v. 

5  N.  Y    Supp.  910.  Lake,  51  Fed.  Rep.  892.     In  Bickham 


345 


ASSIGNMENTS    HELD    VOID. 


'Ml 


make  future  preferences  ; '  or  that  authorizes  the  a 
to  compromise  with  creditors ;'-'  or  that  delays  the  collection 
of  a  debt  ;3  or  that  provides  for  payment  of  part  ol  the 
creditors,4  and  the  restoration  of  the  surplus  back  to  the 
assignor;5  or  that  permits  the  grantor  to  occup)  and  use 
the  property ; H  or  that  is  accompanied  by  the  secreting  of 
assets  ;r  or  is  accompanied  with  the  abstracting  and  hiding 
of  a  considerable  sum  of  money  on  the  eve  of  an  assign- 
ment,8 these  are  illustrations  of  fraudulent  acts  which  by 
themselves,  or  in  combination,  have  been  deemed  sufficient 
to  overturn  voluntary  transfers  for  the  benefit  of  creditors. 
Falsehoods  recited  in  an  assignment  calculated  to  deceive 


v.  Lake,  51  Fed.  Rep.  895,  the  court 
says  :  "  I  think  it  must  follow  that  a 
general  assignment  like  the  present, 
providing  for  the  payment  of  fictitious 
or  simulated  debts,  is  fraudulent  and 
void  for  all  purposes.  The  question 
is,  what  are  simulated  and  fictitious 
debts?  To  be  held  such,  the  debt 
must  be  fabricated  and  trumped  up, 
must  have  no  consideration  to  sup- 
port it,  must  be  a  pretense,  and  noth- 
ing more.  For  the  assignment  to  be 
rendered  void  on  this  ground,  the 
conveyance,  debt,  or  assignee  debt 
must  have  been  inserted  by  the 
grantor  with  a  knowledge  that  it  was 
not  a  real  and  valid  debt,  or  that  he 
was  so  careless  and  negligent  in  ascer- 
taining whether  or  not  it  was  a  ficti- 
tious debt  as  to  estop  him  from  deny- 
ing his  knowledge  of  its  invalidity, 
and  not  an  honest  mistake." 

1  Boardman  v.  Halliday,  10  Paige 
(N.  Y.)  223;  Averill  v.  Loucks,  6 
Barb.  (N.  Y.)470  ;  Kercheis  v.  Schloss, 
49  How.  Pr.  (N.  Y.)  284. 

2  McConnell  v.  Sherwood,  84  N.  Y. 
522 

3  Buell  v.  Rope,  6  App.  Div.  (N.  Y.) 
115,  39  N.  Y.  Supp.  475. 


4  Bickham  v.  Lake,  51  Fed.  Rep. 892. 

5  Sutherland  v.  Bradner,  116  N.  V. 
410,  22  N.  E.  Rep.  554.  In  Knapp  v. 
McGowan,  96  N.  Y.  85,thecourl  says  : 
"  An  insolvent,  and  even  a  solvent 
debtor  cannot  convey  all  his  property 
to  trustees  to  pay  a  portion  of  his 
creditors,  with  a  provision  that  the 
surplus  shall  be  returned  to  him, 
leaving  his  other  creditors  unprovided 
for  ;  because  such  a  conveyance  ties 
up  his  property  in  the  hands  of  his 
trustees,  places  it  beyond  the  reach  of 
his  creditors  by  the  ordinary  process 
of  the  law  and  thus  hinders  and  de- 
lays them,  and  is,  therefore  void  asto 
the  creditors  unprovided  for." 

6  Saunders  v.  Waggoner,  82  Va. 
316. 

1  Newman  v.  Clapp,  20  Misc.  (N, 
Y.)  68;  Coursey  v.  Morton,  132  N  Y 
556,  30  N.  E.  Rep.  231  :  Shultzv.  Boag- 
land.  85  N.  Y.  464  :  Rothschild  v. 
Salomon,  52  Hun  (N.  Y.)  486,  5  X. 
Y.  Supp.  865. 

«Coursey  v.  Morton,  L32  X.  V  :>",r,. 
30  N.  E.  Rep.  231;  Shultz  v.  Hoag 
land,  85  N.  V.  464  ;  Rothschild  v. 
Salomon,  52  Hun  (N.  Y.)  186,  5  N.  V. 
Supp.  865. 


6l2  INSUFFICIENT   GROUNDS   OF   ATTACK.  §  345a 

creditors  constitute  notice  to  the  assignee  of  the  assignor's 
fraudulent  intent.1 

§  345a.  Insufficient  grounds  of  attack. — A  cancellation  by 
a  surviving  partner,  by  agreement,  on  the  eve  of  making 
an  assignment,  of  a  claim  against  his  son,  who  had 
rendered  services  to  the  firm  of  the  reasonable  value  of 
the  cancelled  claim,  will  not  invalidate  an  assignment;2 
nor  is  the  instrument  rendered  void  by  bad  management 
of  the  assignee  ; 3  nor  by  the  fact  that  a  debt  preceding 
the  assignment  was  fraudulently  contracted  ; 4  nor  by  the 
fact  that  the  assignor  expected  to  compromise  with  his 
creditors;5  nor,  in  Texas,  by  the  fact  that  the  schedule 
embraces  a  debt  that  cannot  be  paid  ratably  with  the 
claims  of  other  creditors;0  nor  because  the  insolvent's 
wife  took  a  small  amount  of  supplies  from  the  assignor's 
store;7  nor  by  the  insolvency  of  the  assignee,8  though 
certainly  such  a  transfer  should  be  scrutinized  ;  nor  by 
the  failure  to  comply  with  a  statute  directing  that  the 
residence,  kind  and  place  of  business,  etc..  of  the  assignor 


'Douglass  Merch.   Co.  v.  Laird,  37  that  a  debtor  assigns  without  at  least 

W.  Va.  687,  17  S.  E.  Rep.  188.  some  expectation  of  this  character." 

'Cutter  v.   Hume,    62   Hun(N.  Y.)  6 Tracy  v.  Tuffly,  134  U.  S.  225,  10 

622,  17  N.  Y.  Supp.  255  ;  affi'd  138  N.  S.  C.  Rep.  527. 

Y.  630,  33  N.  E.  Rep.  1084.  '  Estes  v.  Gunter,  122  U.  S.  450,  456. 

8  Bradley  v.  Bischel,  81  Iowa  80,  46  7  S.  C.  Rep.  1275.    The  court  says  that 

N.  W.  Rep.  755.  .Mrs.  Gunter  "  was  a  clerk  in  the  store 

*  South  Branch  Lumber  Co.  v.  Ott,  and  took  the  money  from  the  drawer 

142  U.  S.  622,  12  S.  C.  Rep.  318.  in  the  course  of  business,  and  supplies 

'  Moore  v.  Stege,  93  Ky.  27,  18  S.  for  Gunter's  house  were  generally 
W.  Rep.  1019.  In  this  case,  the  court  taken  from  the  store.  It  was  quite 
says  :  ' '  His  evidence  shows,  however,  natural,  therefore,  that  he  should  take 
that  he  was  then  conducting  his  busi-  needed  supplies  before  the  assign- 
in  sss  honestly,  and  the  most  that  can  ment  was  executed,  There  is  no  evi- 
be  said,  when  all  the  testimony  is  dence  that  the  supplies  were  excessive 
considered,  \h,  that  when  the  assign-  or  unreasonable,  but  even  if  they 
ment  was  made  he  had  an  expectation,  were,  that  fact  would  constitute  no 
;i  hope  <>f  compromising  with  his  ground  for  Betting  the  subsequent 
creditors.    This  does  not   vitiate  the  assignment  aside." 

pnment.     If  so,  <>m.  would  rarely  8Cohn  v.  Ward,  32  W.  Va.  40,  9S. 

be   upheld.     It  is,   probably,    seldom  E.  Rep.  41. 


§345b>346     DEFEATED  CREDITOR  ENTITLED  TO  DIVIDEND.     I 

shall  be  stated;1  nor  by  omitting  preferred  claims  of 
laborers;2  nor  by  a  mistake  in  the  inventory  of  the  prop- 
erty, or  in  the  assignment  with  respect  to  the  description 
of  the  debt,  or  its  amount  or  form,  in  the  absence  of 
actual  fraud  ;3  nor  because  a  preference  is  made  in  order 
to  carry  out  an  antecedent  promise  to  prefer  ;  '  nor  by 
withdrawing  a  small  sum  of  money  to  apply  to  family 
wants;5  nor  by  mistakes  as  to  individual  and  copartner- 
ship debts  ; G  nor  by  reserving  exempt  property.7 

§  345b.  Defeated  creditor  entitled  to  dividend.  —  A  cred- 
itor who  fails  to  overturn  an  assignment  is  not  precluded 
from  sharing  in  a  distribution  of  the  assigned  estate.8 
And  a  judgment-creditor  will  not  forfeit  or  lose  his  honest 
judgment  against  the  debtor  because  he  may  have  advised 
the  latter  to  cheat  another  creditor.9 

§  346.  Foreign  assigments.  — The  rule  generally  obtains 
that  the  statute  laws  of  a  particular  State  regulating 
assignments  for  the  benefit  of  creditors,  do  not  apply  to 

1  Dutchess  County  Mutual  Ins.  Co.,  head  Banking  Co.  v.  Whitaker,  110 
etc.  v.  Van  Wagonen,  132  N.  Y.  398,      N.  C.  345,  14  S.  E.  Rep.  920. 

30  N.  E.  Rep.  971.  8  Mills  v.  Parkhurst,  126  N.   Y.  89, 

2  Richardson  v.  Thurber,  104  N.  Y.      26  N.  E.  Rep.  1041. 

606,  11  N.  E.  Rep.  133.  9  Fidler  v.  John,  178  Pa.  St.  117,  35 

3  Roberts  v.  Buckley,  145  N.  Y.  223,  Atl.  Rep.  976,  where  the  court  Bays  : 
39  N.  E.  Rep.  966.  SeeGoodbar  Shoe  "  If  the  owner  of  the  honest  judgment 
Co.  v.  Montgomery,  73  Miss.  73,  19  had  a  valid  lien,  which  is  not  and 
So.  Rep.  196.  cannot  be    disputed,    by    what   con- 

4  Smith  v.  Munroe,  1  App.  Div.  (N.  ceivable  process  of  reasoning  did  he 
Y.)  77,  37  N.  Y.  Supp.  62;  National  lose  it?  If  he  had  il  before  he  advised 
Park  Bank  v.  Whitmore,  104  N.  Y.  the  fraudulent  conveyance  how  did 
304,  10  N.  E.  Rep.  524.     See  §  394.  he  lose  it  because  of  that  ad\  ice?     H 

5  Vietor  v.  Nichols,  13  St.  Rep.  (N.  it  was  a  good  judgment  before  the 
Y.)461,  affi'd  114  N.  Y.  617,  20  N.  E.  advice  was  given,  because  it  was 
Rep.  880  ;  Birdsall  W.  &  P.  Mfg.  Co.  given  for  a  valuable  consideration,  it 
v.  Schwarz,  3  App.  Div.  (N.  Y.)  301,  was  a  good  judgment  thereafter  be- 
38  N.  Y.  Supp.  368.  cause  it  was  still  a  judgment  which 

6  Gorham  v.  Innis,  115  N.  Y.  87,  21  was  given  for  a  valuable  consideration. 
N.  E.  Rep.  722.  Therefore,  it  was  still  a  good  judg- 

7  Haynes  v.  Hoffman,  46  S.  C.  157,  ment.  The  fact  of  good  considers 
24  S.  E.  Rep.  103;  Adler  v.  Cloud,  42  tion  was  precisely  the  Bame  ati 

S.   C.  272,  20  S.  E.  Rep.  393  ;  More-     before  the  advice  was  given." 


614 


FOREIGN   ASSIGNMENTS. 


§346 


foreign  assignments  ; *  such  transfers,  if  valid  by  the  law 
of  the  place  where  made,  are  valid  everywhere,2  and  will 
protect  the  property  from  attachment,3  except  perhaps  as 
regards  creditors  who  are  residents  of  the  particular  State 
in  which  it  is  sought  to  enforce  the  provisions  of  the 
instrument.  As  the  foreign  assignment  is  allowed 
to  operate  partially  as  a  matter  of  comity,  the  court  some- 
times refuse  to  enforce  it  to  the  prejudice  of  their  own 
citizens,4  and  seize  upon  the  absence  of  local  require- 
ments as  a  means  of  accomplishing  that  result.5  In  New 
York  State  no  discrimination  is  permitted  between  resi- 
dents of  that  State  and  of  other  States.6  Manifestly  an 
assignment  will  not  take  effect  to  pass  title  to  personal 
property  situated  in  another  State,  in  express  contraven- 
tion of  the  statute  law  of  that  State.7  The  distinction 
should  not  be  overlooked  between  assignments  by  act  of 
the  party  and  those  which  are  involuntary,8  or   by  oper- 


1  Ockeririan  v.  Cross,  54  N.  Y.  29  ; 
Chafee  v.  Fourth  Nat.  Bank  of  N.  Y., 
71  Me.  524;  Bentley  v.  Whitteraore, 
19  N.  J.  Eq.  4G2. 

'See  Benevolent  Order,  etc.  v. 
Sanders,  28  W.  N.  C.  (Pa.)  321  ; 
Woodward  v.  Brooks,  128  111.  222,  30 
N.  E.  Rep.  685. 

3  Ockerman  v.  Cross,  54  N.  Y.  29  ; 
Bholen  v.  Cleveland,  5  Mason  174  ; 
Barth  v.  Backus,  140  N.  Y.  234,  35  N. 
E.  Rep.  425. 

*  Chafee  v.  Fourth  Nat.  Bank,  71 
Me.  534.  See  Matter  of  Waite,  99  N. 
Y.  433,  3  N.  E.  Rep.  440.  Compare 
Train  v.  Kendall,  137  Mass.  366. 

6  See  Faulkner  v.  Hyman,  142 
Mass.  53,  GN.  E.  Rep.  846;  Bentley 
v.  Whittemore,  19  N.  J.  Eq.  462; 
Bacon  v.  Home,  123  Pa.  St.  452,  16 
Atl.  Rep.  794;  St. -el  v.  Goodwin,  113 
Pa.  St.  288,  6  \tl.  Rep.  49. 

Bibernia  Nat.  Bank  v.  Laconibe, 
84  N.  Y.  367  ;  Vanderpoel  v.  Gorman, 


140  N.  Y.  563,  573,  574,  35  N.  E.  Rep. 
932.  See  Paine  v.  Lester,  44  Conn. 
196  ;  Hanford  v.  Paine,  32  Vt.  442. 

1  Warner  v.  Jaffray,  96  N.  Y.  248. 
In  Hallgarten  v.  Oldham,  135  Mass. 
1,  7,  the  court  says  :  "  When  a  sale, 
mortgage,  or  pledge  of  goods  within 
the  jurisdiction  of  a  certain  State  is 
made  elsewhere,  it  is  not  only  com- 
petent, but  reasonable,  for  the  State 
which  has  the  goods  within  its  power 
to  require  them  to  be  dealt  with  in  the 
same  way  as  would  be  necessary  in  a 
domestic  transaction,  in  order  to  pass 
a  title  which  it  will  recognize  as 
against  domestic  creditors  of  the 
vendor  or  pledgor." 

8  Schroder  v.  Tompkins,  58  Fed. 
Rep.  675;  Smith's  Appeal,  104  Pa. 
St.  381  ;  Weider  v.  Maddox,  66  Tex. 
372,  1  S.  W.  Rep.  168;  Walters  v. 
Whitlock,  9  Fla.  86  ;  Barth  v.  Backus, 
140  N.  Y.  235,  35  N.  E.  Rep,  425. 


§  346a 


ASSIGNMENTS    BY   CORPORA!  I 


ation  of  law.  The  latter  class  of  conveyances  arc  gen- 
erally founded  upon  statutory  provisions,  and  have  no 
extra-territorial  force.1  A  conveyance  of  personal  prop- 
erty, valid  according  to  the  lex  loci  contractus,  is  ordi- 
narily binding  and  effectual  to  transfer  title  when 
located.2  This,  however,  is  a  line  of  inquiry  foreign  to 
our  subject. 

§  346a.  Assignments  by  corporations.  —  Where  charter 
restrictions  or  statutory  inhibitions  do  not  exist,  a  corpor- 
ation may  make  a  general  assignment.3  Such  a  transfer 
was  formerly  not  possible  to  carry  out  under  the  statute 
in  New  York,4  but  the  rule  in  that  State  has  been 
changed5  In  Vanderpoel  v.  Gorman,'1  Peckham,  J.,  said: 
"  There  can  be  no  doubt  that  an  insolvent  corporation 
could  at  common  law  make  a  general  assignment  in  trust 
to  an  assignee  for  the  benefit  of  its  creditors."7 


1  See  Hutcheson  v.  Peshine,  16  N. 
J.  Eq.  167  ;  Kelly  v.  Crapo,  45  N.  Y. 
86  ;  reversed,  Crapo  v.  Kelly,  16 
Wall.  610.     See  §  294. 

-  Schroder  v.  Tompkins,  58  Fed. 
Rep.  675  ;  Barnett  v.  Kinney,  147  U. 
S.  476,  13  S.  C.  Rep.  403;  Catlin  v. 
Wilcox  Silver  Plate  Co.,  123  Ind.  477, 
24  N.  E.  Rep.  250  ;  Barth  v.  Backus, 
140  N.  Y.  234,  35  N.  E.  Rep.  425. 

3  Albany  &  R.  Iron  &  S.  Co.  v. 
Southern  Agricultural  Works.  76  Ga. 
135  ;  De  Ruyter  v.  St.  Peter's  Church, 
3  Barb.  Ch.  (N.  Y.)  124,  affi'd  3  N.  Y. 
238  ;  Haxtun  v.  Bishop,  3  Wend.  (N. 
Y.)  13  ;  Bowery  Bank  Case,  5  Abb. 
Pr.  (N.  Y.)  415;  Hill  v.  Reed,  16 
Barb.  (N.  Y.)280  ;  DeCamp  v.  Alward, 
52  Ind.  473;  Nelson  v.  Edwards,  40 
Barb.  (N.  Y.)  279;  Union  Bank  of 
Tenn.  v.  Ellicott,  6  Gill  &  J.  (Md.) 
363  ;  Vanderpoel  v.  Gorman,  140  N. 
Y.  568,  35  N.  E.  Rep.  932 ;  Home 
Bank  v.  Brewster  &  Co.,  17  Misc.  (N. 
Y.)  442,  41  N.  Y.  Supp.  203  ;  Savings 
Bank  of  New  Haven  v.  Bates,  8  Conn. 


505  ;  Coats  v.  Donnell.  94  N.  V.  178; 
Chew  v.  Ellingwood,  86  Mo.  27:!; 
Lenox  v.  Roberts,  2  Wheat.  37:'» ; 
Warner  v.  Mower,  11  Vt.  385  ;  Flint 
v.  Clinton  Co..  12  \.  II  431  ;  Ex 
parte  Conway,  4  Ark.  :i04  ;  Catlin  v. 
Eagle  Bank,  6  Conn.  233  :  Ardesco 
Oil  Co.  v.  North  Am.  Oil  &  M.  I 
Pa.  St.  375.  A  transfer  by  officers  of 
an  insolvent  corporation  conveying 
all  its  property  to  another  corporation 
without  providing  for  debts  and 
dividing  the  bonds  received  in  pay- 
ment among  the  stockholders  and 
officers  is  fraudulent  as  to  the  vendor. 
Fort  Payne  Bank  v.  Ala.  Sanitarium, 
103  Ala.  358. 15  So.  Rep.  618. 

4  Chap.  564,  Laws  of  1890,  §  48, 

5  Vanderpoel  v.  Gorman.  140  N.  Y 
568,  35  N.  E.  Rep.  932  ;  Borne  Bank  v. 
Brewster  &  Co  ,  17  Misc.  (N.  Y.)  I1J 
41  N.  Y.  Supp.  203. 

6  140  N.  Y.  563,  568,  35  N.  E.  Rep. 
932. 

7  Franzen  v.  Zimmer,  90  Hun  (N. 
Y.)  103,  35  N.  Y.  Supp.  612. 


6l6  CONTINGENT   CREDITORS.  §  346b 

Where  assignments  by  corporations  are  allowed  they 
are  subject  to  attack  "  upon  substantially  the  same 
grounds  as  in  the  cases  of  similar  transfers  by  individ- 
uals." l  Hence  a  conveyance  by  an  insolvent  corporation 
to  one  of  its  directors,  who  assumed  the  debts  and  agreed 
to  pay  them  within  eighteen  months  is  voidable.2 

A  corporation,  like  an  insolvent  person,  may  permit 
its  creditors  to  take  hostile  proceedings  and  allow  those 
to  obtain  preferences  who  are  the  most  vigilant.3 

But  the  ramifications  of  corporation  law  cannot  be 
followed  in  detail. 

§  346b.  Contingent  creditors. — The  fact  that  the  assignor 
has  incurred  obligations  that  are  of  a  contingent  nature 
at  the  date  of  the  assignment  will  not  preclude  provision 
being  made  for  the  protection  of  such  contingent  creditors 
out  of  the  assigned  estate.4 

1  In  Cole  v.  Millerton  Iron  Co.  133      drews,    145   N.    Y.  443,  40  N.  E.  Rep. 
N.  Y.  164,  30  N.  E.  Rep.  847,  it  was      214. 

held  that  a  transfer  by  a  corporation         4  Brainerd    v.    Dunning,    30   N.  Y. 

of  all  its  assets,  which  lias  the  effect  211  ;  Griffin  v.  Marquardt,   21  N.  Y. 

of  terminating  the  regular  business  of  121  ;  Keteltas  v.  Wilson,  36  Barb.  (N. 

the  corporation   is  illegal  as  against  Y.)   298;  Cunningham  v.    Freeborn, 

creditors.  11    Wend.     (N.    Y.)    241  ;     Webb  v. 

2  Berney    Nat.     Bank     v.     Guyon,  Thomas,    49    St.    Rep.    (N.    Y.)    462, 
(Ala.  1896)  20  So.  Rep.  520.  21  N.  Y.  Supp.  69  ;    Read  v.  Worth- 
s'Varnum  v.  Hart,    119  N.   Y.  105,  ington,  9  Bosw.  (N.  Y.)  628. 

23   N.    E.    Rep.   183  ;  French    v.    An- 


CHAPTER    XXII. 


FRAUDULENT   CHATTEL    MORTGAGES. 


§347. 
348. 
349. 
350. 
351. 
352. 
353. 
354. 

355. 


Chattel  Mortgages. 

y  Rule  in  Robinson  v.  Elliott. 

Proof  extrinsic  to  the  instrument. 
Comments  in  the  cases. 

j-  Opposing  rule  and  cases. 

Discussion  of  the  principle  in- 
volved. 

Authorizing  sales  for  mort- 
gagee's benefit. 


§  356.  Sales  upon  crc lit. 
356a.  Secret  trust. 
356t».  Change  of  possession. 

357.  Possession  —  Independent  valid 

transactions. 

358.  Right  of  revocation  —  R« 

tions. 

359.  Rule  as    t<>  consumable   prop- 

erty. 
359m.  Distinct  claims. 


§  347.  Chattel  mortgages.— Questions  affecting  the  valid- 
ity of  chattel  mortgages  as  regards  creditors  are  so  largely 
dependent  upon  and  regulated  by  local  statutory  pro- 
visions, that  the  general  principles  governing  the  subject 
can  be  discussed  with  but  little  satisfaction.  These 
instruments  are  in  some  respects  a  higher  security  than 
a  mortgage  on  land.  Such  mortgages  are,  as  a  general 
rule,     valid      between     the     parties,1     even     though     not 


1  Stewart  v.  Piatt,  101  U.  S.  731  ; 
Hackett  v.  Manlove,  14  Cal.  85.  See 
Lane  v.  Lutz,  1  Keys  (N.  Y.)  213  ; 
Smith  v.  Acker,  23  Wend.  (N.  Y.)  653. 
See  Chap.  XXVI.  In  Stewart  v. 
Piatt,  101  U.  S.  739,  the  court  said: 
"Although  the  chattel  mortgages,  by 
reason  of  the  failure  to  file  them  in 
the  proper  place,  were  void  as  against 
judgment-creditors,  they  were  valid 
and  effective  as  between  the  mort- 
gagors and  the  mortgagee.  Lane  v. 
Lutz,  1  Keys  (N.  Y.)  213;  Wescott 
v.  Gunn,  4  Duer  (N.  Y.)  107  ;  Smith  v. 
Acker,  23  Wend.  (N.  Y.)  653.  Sup- 
pose  the   mortgagors  had    not  been 


adjudged  bankrupts;  and  there  bad 
been  no  creditors,  subsequent  pur- 
chasers, or  mortgagees  in  good  faith 
to  complain,  as  they  alone  might,  of 
the  failure  to  file  the  mortga 
the  towns  where  the  mortf 
respectively  resided,  it  cannot  be 
doubted  that  Stewart,  in  thai  event, 
could  have  enforced  a  lien  upon  the 
mortgaged  property  in  satisfaction  of 
his  claim  for  rent.  The  assignee  took 
the  property  subject  to  such  equities, 
liens,  or  incumbrances  as  would  have 
affected  it,  had  no  adjudication  in 
bankruptcy  been  made.  While  th< 
rights  of  creditors  whose  executions 


6l8  CHATTEL  MORTGAGES.  §  347 

recorded  ; l  and  recording  the  instrument  is  made  by 
statute  in  some  States  a  substitute  for  actual  change  of 
possession,  and  repels  the  imputation  of  fraud  which 
would  arise  from  the  retention  of  possession  by  the 
vendor.2  The  creditor  must  keep  in  mind  in  taking  a 
chattel  mortofaee  to  secure  his  debt  that  he  cannot  use  his 
claim  for  any  other  purpose  than  his  own  indemnity.3 
Taking  a  mortgage  in  excess  of  the  debt,4  or  upon  all  the 
property  of  the  debtor  of  a  value  greatly  in  excess  of  the 
debt;5  making  an  unfair  sacrifice  at  the  sale  so  as  to 
prevent  a  surplus;6  taking  the  mortgage,  among  other 
things,  to  hinder  other  creditors;7  or  reciting  an  over 
statement  of  the  consideration  ;8  or  obtaining  the  instru- 
ment under  duress  9  or  altering  a  mortgage  ; 10  are  illustra- 
tions of  acts  and  combinations  of  facts  which  will  overturn 
such  a  security.  Many  questions  concerning  the  validity  of 
these  instruments  are  to  be  found  in  the  reports,  only  the 
more  prominent  of  which  will  be  noticed.     Naturally,  from 


preceded   the  bankruptcy  were  prop-  will  not  be  considered    a    badge  of 

erly  adjudged  to  be  superior  to  any  fraud.      Stevens  v.   Breen,    75    Wis. 

which    passed    to    the    assignee     by  595,  44  N.  W.  Rep.  645. 

operation  of  law,  the  balance  of  the  3  Hughes  v.  Epling,  93  Va.  424  ;  25 

fund,    after   satisfying    those   execu-  S.  E.  Rep.  105.     See  State  v.  Busch, 

tions,  belonged  to  the  mortgagee,  and  38  Mo.  App.  440. 

not  to  the  assignee  for  the  purposes  of  4  Patrick   v.    Riggs,   105  Mich.  610, 

his    trust.      The    latter   representing  63  N.  W.  Rep.  532. 

general  creditors,  cannot  dispute  such  5  Thompson  v.  Richardson  Drug  Co., 

claim,  since,   had  there  been  no  ad-  33   Neb.    714,  50   N.    W.    Rep.    948 ; 

judication,  it  could  not  have  been  dis-  Brown  v.  Work,  30  Neb.  800,  47  N. 

puted  by  the  mortgagors."     SeeHau-  W.  Rep.  192. 

selt  v.  Harrison,  105  U.  S.  406.  6  Collingsworth  v.  Bell,  56  Kan.  342, 

1  Stewart  v.  Piatt,    101   U.    S.   731  ;  43  Pac.  Rep.  252. 

Lane  v.   Lutz,    1  Keyes  (N.    Y.)  213  ;  7  Weber  v.  Mick,  131  111.  526,  23  N. 

Pyeatt   v.   Powell,  10  U.  S.  App.  200,  E.    Rep.   646  ;  McCreary  v.   Skinner, 

51  Fed.  Rep.  551,  2  C.  C.  A.  367.  83  Iowa  366,  49  N.  W.  Rep.  986. 

''  See  Bullock  v.  Williams,  16  Pick.  «  Kalk   v.  Fielding,   50  Wis.  339,  7 

(Mass.)  33:  Feurt  v.  Rowell,   62  Mo.  N.  W.  Rep.  296. 

524  ;  Hughes  v.    Cory,  20  Iowa  403,  »  Lightfoot  v.  Wallis,  12  Bush  (Ky.) 

and  cases  cited  ;  Spraightsv.  Hawley,  498.     See  Bane  v.  Detrick,  52111.  19. 

39  N.  Y.  441.     A  reasonable  delay  by  10  Bowser  v.  Cole,  74  Tex.  222,  11  S. 

the  mortgagee   in   taking  possession  W.  Rep.  1131. 


§348 


ROBINSON   V.    ELLIOTT. 


619 


what   precedes,  a  mere   creditor-at-large   cannot   assail  a 
chattel  mortgage.1 

§348.  Rule  in  Robinson  v.Elliott. — The  Supreme  Court 
of  the  United  States,  in  Robinson  v.  Elliott,2  committed 
itself  to  the  doctrine  that  an  instrument  which  provided 
for  the  retention  of  the  possession  of  the  mortgaged 
personalty  by  the  mortgagor,  accompanied  with  the  power 
to  dispose  of  it  for  his  own  benefit  in  the  usual  course  of 
trade,  was  inconsistent  with  the  idea  of  a  security,  or  the 
nature  and  character  of  a.  mortgage,  and  of  itself  furnished 
a  pretty  effectual  shield  to  a  dishonest  debtor,  and  con- 
sequently should  be  regarded  as  voidable  as  to  creditoi 


1  Button  v.  Rathbone,  126  N.  Y. 
190,  27  N.  E.  Rep.  266;  Jones  v. 
Graham,  77  N.  Y.  628. 

2  22  Wall.  513. 

3  See  Worseley  v.  Dernattos,  1  Burr. 
467,  per  Lord  Mansfield  ;  Edwards  v. 
Harben,  2  T.  R.  587  ;  Bannon  v.  Bow- 
ler, 34  Minn.  418,  26  N.  W.  Rep.  237  ; 
Paget  v.  Perchard,  1  Esp.  205,  per 
Lord  Kenyon  ;  Lang  v.  Lee,  3  Rand. 
(Va.)  410  ;  Addington  v.  Etheridge, 
12  Gratt.  (Va.)  436;  McLachlan  v. 
Wright,  3  Wend.  (N.  Y.)  348 ;  Edgell 
v.  Hart,  9  N.  Y.  213  ;  Brackett  v. 
Harvey,  91  N.  Y.  214  ;  Potts  v.  Hart, 
99  N.  Y.  168,  1  N.  E.  Rep.  605; 
American  Oak  Leather  Co.  v.  Fargo, 
77  Fed.  Rep.  671  ;  Hangen  v.  Hache- 
meister,  114  N.  Y.  566,  21  N.  E. 
Rep.  1046  ;  Mandeville  v.  Avery, 
124  N.  Y.  376,  26  N.  E.  Rep.  951  ; 
Sparks  v.  Brown,  46  Mo.  App.  530  ; 
Sauer  v.  Behr,  49  Mo.  App.  86; 
Russell  v.  Rutherford,  58  Mo.  App. 
550  ;  Cook  v.  Bennet,  60  Hun  (N.  Y.) 
8,  14  N.  Y.  Supp.  683  :  Gallagher  v. 
Rosenfield,  47  Minn.  507,  50  N.  W. 
Rep.  696  ;  Randall  v.  Carman,  89  Hun 
(N.  Y.)  86,  35  N.  Y.  Supp.  53  ;  Sberwin 
v.  Gaghagen,  39  Neb.  238, 57  N.W .  Rep. 
1005  ;  State  v.  Busch,  38  Mo.  App.  442; 


Martin-Perrin  Merc.  Co.  v.  Perkins,  <i:; 
Mo.  App.  310  ;  Pabst  Brewing  Co.  v. 
Butchart  (Minn.)  (i!)  X.  W.  Rep. 
809;  Chapman  v.  Sargent,  6  Col  A.pp. 
438,  40  Pac.  Rep.  849;  Coburn  v. 
Pickering,  3  N.  H.  415  ;  Bank  of 
Leavenworth  v.  Hunt,  1  1  Wal.  391  ; 
Coolidge  v.  Melvin,  42  X.  II  520; 
Collins  v.  Myers,  16  Ohio  517  ;  ( !hop- 
hard  v.  Bayard,  4  Minn.  .V.;!  ;  Eorton 
v.  Williams,  21  Minn.  187  ;  Bishop  v. 
Warner,  19  Conn.  400;  Place  v.  Lang- 
worthy,  13  Wis.  629;  Blakeslee  \. 
Rossman,  43  Wis.  116  :  Smith  v.  Ely, 
10  N.  B.  R.  553 ;  In  re  Cantrell,  6 
Ben.  482  ;  In  re  Kahley,  'J  Biss.  388  ; 
Southard  v.  Benner,  72  X.  Y.  I.' I  Ex 
parte  Games,  L.  R.  12  Ch.  1>.  314 
Cheatham  v.  Hawkins,  80  N.  ('.  104; 
Tennessee  Nat.  Bank  v.  Ebbert,  '•» 
Heisk.  (Tenn.)  154;  Joseph  v.  Levi, 
58  Miss.  815;  Harman  v.  Hoskins,  56 
Miss.  142;  Dunning  v.  Mead,  '.til  III. 
379;  Goodheart  v.  Johnson,  88  111.  58  : 
Davenport  v.  Foulke.  0*  I  ml.  882  : 
Barnet  v.  Fergus,  51111.352;  Davis 
v.  Ransom,  18  111.  396;  Simmons  v. 
Jenkins,  76  111.  479  ;  Mbbley  v.  Lette, 
61Ind.  11  :  Garden  v.  Bodwing,  9  W. 
Va.  122  :  City  Nat.  Bank  v.  Goodrich, 
3   Col.  139;    Sparks  v.  Mack,  31  Ark. 


620 


ROBINSON   V.    ELLIOTT. 


348 


Davis,  J.,  said:  "In  truth,  the  mortgage,  if  it  can  be  so 
called,  is  but  an  expression  of  confidence,  for  there  can  be 
no  real  security  where  there  is  no  certain  lien.  What- 
ever may  have  been  the  motive  which  actuated  the  parties 
to  this  instrument,  it  is  manifest  that  the  necessary  result 
of  what  they  did  do  was  to  allow  the  mortgagors,  under 
cover  of  the  mortgage,  to  sell  the  goods  as  their  own,  and 
appropriate  the  proceeds  to  their  own  purposes  ;  and  this, 
too,  for  an  indefinite  length  of  time."  :  The  same  court, 
following  a  State  decision,  was,  later,  inclined  to  uphold  a 
mortgage  of  this  kind,  where  the  State  from  which  the  ap- 
peal was  taken  tolerated  such  an  arrangement.2  That  the 
courts  should  look  with  any  favor  upon  such  instruments 
seems  extraordinary,  but  the  principle  of  Robinson  v. 
Elliott  is  certainly  not  gaining  ground.     It  must  be  remem- 


6G6 ;  Orton  v.  Orton,  7  Ore.  378  ; 
Peiser  v.  Peticolas,  50  Tex.  638  ;  Scott 
v.  Alford,  53  Tex.  82 ;  Weber  v;  Arm- 
strong, 70  Mo.  217  ;  Tallon  v.  Ellison, 
3  Neb.  63 ;  McCrasly  v.  Hasslock,  4 
Baxt.  (Tenn.)  1;  Catlin  v.  Currier,  1 
Sawyer,  7  ;  Orman  v.  English  &  S. 
Merc.  Inv.  Trust,  9  C.  C.  A.  356,  61 
Fed.  Rep.  38 ;  Pierce  v.  Wagner 
(Minn.)  66  N.  W.  Rep.  977 ;  Bank  v. 
Brier,  95  Tenn.  331,  32  S.  W.  Rep. 
205  ;  American  Oak  Leather  Co.  v. 
Wyeth  Hardware  &  Mfg.  Co..  57  Mo. 
App.  297;  Paxton  v.  Smith,  41  Neb.  56, 
59  N.  W.  Rep.  690;  Eckman  v. 
Munnerlyn,  32  Fla.  367,  13  So.  Rep. 
922  ;  First  Nat.  Bank  v.  Wittich,  33 
Fla.  681,  15  So.  Rep.  552  ;  Rock  Island 
Nat.  Bank  v.  Powers,  134  Mo.  444,  34 
S.  W.  Rep.  869,  35  Id.  1132.  See  "  An 
American  Phase  of  Twyne's  Case,'" 
by  James  O.  Pierce,  Esq.,  2  Southern 
L.  Rev.  (X.  S.)  731;  "Fraudulent 
Mortgages  of  Merchandise,"  by  Leon- 
ard A.  Jones,  Esq.,  5  Southern  L. 
Rev.  (N.  S.)  617;  "  A  Reply,"  by  Mr. 
Pierce,   0  Southern  L.  Rev.   (N.  S.) 


96;  "  Frauds  in  Chattel  Mortgages," 
by  Mr.  Jones,  7  Southern  L.  Rev. 
(N.  S.)  95  ;  Reviewed  by  Ed.  J.  Max- 
well. Esq.,  7  Southern  L.  Rev.  (N. 
S.)  205.  This  discussion  relates 
mainly  to  Robinson  v.  Elliott,  22 
Wall.  513.  The  controversy  gave 
birth  to  a  work  entitled  "  Fraudulent 
Mortgages  of  Merchandise,  a  Com- 
mentary on  the  American  Phases  of 
Twyne's  Case,  by  James  O.  Pierce," 
F.  H.  Thomas  &  Co.,  1884.  The  posi- 
tions taken  by  Mr.  Pierce  in  the  Law 
Review,  in  support  of  Robinson  v. 
Elliott,  are  re-stated  in  this  volume 
with  commendable  clearness  and 
force,  and  the  different  authorities 
in  State  and  Federal  tribunals  bearing 
upon  the  question  are  collated  and 
discussed  down  to  that  date. 

1  Robinson  v.  Elliott,  22  Wall.  525. 
See  Means  v.  Dowd,  128  U.  S.  284,  9 
S.  C.  Rep.  65  ;  Etheridge  v.  Sperry, 
139  U.  S.  266,  11  S.  C.  Rep.  565. 

2  Etheridge  v.  Sperry,  139  U.  S. 
266,  11  S.  C.  Rep.  565. 


§  349  ROBINSON    V.    ELLIOTT. 

bered  that,  in  Twyne's  Case,  where  the  transfer  was 
avoided,  one  of  the  objections  urged  against  the  tran 
tion  was  that  the  debtor  used  the  goods  as  his  own.1  Mr. 
Pierce  observes:  "A  mortgage  or  conveyance  of  this 
kind  presents  a  false  appearance,  is  only  a  pretence 
as  a  mortgage,  is  calculated  to  deceive,  cannot  fail 
to  deceive  if  it  be  operative,  furnishes  unusual  facili- 
ties for  fraud,  reserves  benefits  to  the  grantor,  and 
prejudices  other  creditors.  When  it  thus  appears  that 
the  transaction  is,  in  its  result,  so  fraudulent,  and 
injurious  to  creditors,  that  few  transactions  could  be  more 
so,  even  where  an  intent  to  defraud  exists  so  as  to  bring 
them  within  the  statute  of  13  Eliz.,  the  courts  are  as 
ready  to  adjudge  the  transaction  fraudulent  as  they  would 
be  if  a  fraudulent  intent  appeared."" 

§  349.  _  In  Edgell  v.  Hart,3  the  license  to  sell  was 
inferred  from  a  written  schedule  attached  to  the  instru- 
ment. Chief-Justice  Denio  held,  with  the  concurrence  of 
a  majority  of  the  court,  that  "  the  existence  of  such  a 
provision  out  of  the  mortgage  or  in  it,  would  invalidate 
it  as  matter  of  law,  and  that  where  the  facts  are  undis- 
puted this  court  should  so  declare."4  "  Such  an  agree- 
ment," said  Finch,  J.,  "  opens  the  door  to  fraud,  and 
permits  the  mortgagor  to  use  the  property  for  his  own 
benefit,  utilizing  the  mortgage  as  a  shield  against  other 
creditors."5  The  debtor,  in  the  language  of  Kent, 
''sports  with  the  property  as  his  own."  6     A  debtor  can- 


1  See  §  22.  4  Compare  Gardiner  v.  McEwen,  l'.i 

5  Pierce  on  Fraudulent   Mortgages  N.    Y.    123;    Mittnacht    v.    Kelly,    3 

of    Merchandise,    §    122.       Compare  Keyes  (N.  Y.)  407  ;   Russell  v.  Winne, 

Birmingham  Dry  Goods  Co.  v.  Roden,  37  N.  Y.  591. 

110  Ala.  511  ;  s.  C,  sub  nom.  Binning-  B  Brackett   v.  Harvey,  91  N.  Y.  228, 

ham  Dry  Goods  Co.  v.  Kelso,  18  So.  224. 

Rep.  135  ;  Lukins  v.  Aird,  6  Wall.  78.  6  Riggs  v.  Murray,  2  Johns.  Ch.  (N. 

3  9    N.    Y.    213.      See    Hangen    v.  Y.)  565. 

Hachemeister,  114  N.  Y.  566,  21  N.  E. 

Rep.  1046. 


622  ROBINSON   V.    ELLIOTT.  §  349 

not  as  against  creditors  be  allowed  to  make  an  apparently 
valid  transfer  of  property  so  that  it  shall  continue  a  source 
of  profit  to  him.1  In  Mittnacht  v.  Kelly,3  Parker,  J., 
observed:  "The  mortgaging  the  whole  stock  in  trade, 
....  with  the  increase  and  decrease  thereof,  and  the  pro- 
viding for  the  continued  possession  of  the  mortgagor,  can 
have  no  other  meaning  than  that  the  mortgagee  should 
all  the  time  retain  a  lien  on  the  whole  stock  by  way  of 
mortgage,  the  mortgagor  making  purchases  from  time  to 
time,  and  selling  off  in  the  ordinary  manner,  the  intent 
being  not  to  create  an  absolute  lien  upon  any  property, 
but  a  fluctuating  one,  which  should  open  to  release  that 
which  should  be  sold  and  take  in  what  should  be  newly 
purchased.  This  is  just  such  an  arrangement  as  was  held 
in  Edcrell  v.  Hart3  to  render  the  mort^aore  void.  The 
case  cannot  be  distinguished  from  that,  and  the  law  as 
pronounced  in  that  case,  must  be  held  applicable  to  this." 
In  Griswold  v.  Sheldon,4  Bronson,  C.  J.,  says:  "There 
would  be  no  hope  of  maintaining  honesty  and  fair  dealing 
if  the  courts  should  allow  a  morto-a^ee  or  vendee  to  sue- 
ceed  in  a  claim  to  personal  property  against  creditors  and 
purchasers,  after  he  had  not  only  left  the  property  in  the 
possession  of  the  debtor,  but  had  allowed  him  to  deal 
with  and  dispose  of  it  as  his  own."  "To  attempt,"  says 
Mr.  Pierce,5  "to  fasten  a  valid  and  certain  lien  upon 
goods  which  may  at  any  moment,  at  the  will  of  the 
debtor,  fly  out  from  under  the  lien,  is  to  attempt  a  legal 
and  moral  impossibility."  It  is  a  sham,  a  nullity —  a 
mere  shadow  of  a  mortgage,  only  calculated  to  ward  off 

1  Birmingham    Dry    Goods  Co.    v.  53  ;  Mandeville  v.  Avery,  124  N.   Y. 

Roden,  lin  Ala.  511;  s.c.submon.  Bir-  376,   26  N.    E.  Rep.    951;    Barton  v. 

mingham  Dry  Goods  Co.  v.  Kelso,  18  Kitlin^ton,  128  Mo.  164,  30  S.  W.  Rep. 

So.  Rep.  135  ;  Lukins  v.  Ainl,  0  Wall.  514. 

7^  *4  N.  Y.  590. 

•  :;  Keyea  (N.  V .  1  407.  5  Pierce  on  Fraudulent  Mortgages 

9  N.  Y.  213;  Randall  v.  Carman,  of  Merchandise,  §  125. 
89   Hun  (N.    Y.)  86,  35  N.  Y.  Supp. 


§  35°  EXTRINSIC    PROOF. 

other  creditors — a  conveyance  in  trust  for  the  benefit  of 
the  person  making  it,  and  therefore  void  as  against 
creditors.1 

§350.  Proof  extrinsic  to  the  instrument. —  The  rule,  as  we 
have  seen,  is  the  same,  whether  the  agreement  is  re<  ited 
in  the  instrument  or  is  extrinsic  to  it.~  Thus  Allen,  f. 
remarked  :  u  Whether  the  agreement  is  in  or  out  of  the 
mortgage,  whether  verbal  or  in  writing,  can  make  no  dif. 
ference  in  principle.  Its  effect  as  characterizing  the  trans- 
action would  be  the  same.  The  difference  in  the  modesof 
proving  the  agreement  cannot  take  the  sting  out  of  the  fact 
and  render  it  harmless.  If  it  is  satisfactorily  established, 
the  result  upon  the  security  must  be  the  same."  :  When 
not  embodied  in  the  instrument  the  agreement  to  sell  must 
be  proved.  The  mere  expectation  of  one  party  or  the 
other  that  this  right  is  to  be  given  is  not  enough  ;  there 
must  be  a  conscious  assent  of  both.4  In  Potts  v.  Hart.' 
Earl,  J.,  said  :  <;A  mortgage  thus  given  is  fraudulent  and 
void  as  to  creditors  because  it  must  be  presumed  that  at 
least  one  of  the  purposes,  if  not  the  main  purpose  for  giving 
it,  was  to  cover  up  the  mortgagor's  property  and  thus  hin- 
der and  delay  his  other  creditors.  It  matters  not  whether 
the  agreement  that  the  mortgagor  may  continue  to 
deal  in  the  property  for  his  own  benefit  is  contained  in 
the  mortgage  or  exists  in  parol  outside  of  it ;  and  where 
the  agreement  exists  in   parol,  it  matters  not  whether  it 


1  Catlin  v.  Currier,  1  Sawyer  12 ;  623;  Bo  wen  v.  Clark,  1  Bisa  128;  In 
Orman  v.  English  &  S.  Merc.  Inv.  re  Kahley,  2  Bias.  383 ;  ZnreCantrell 
Trust,  9  C.  C.  A.  356,  61  Fed.  Rep.  6  Ben.  482;  Smith  v.  Ely,  10  X.  B  R. 
38.  A  provision  requiring  the  mort-  553  ;  Re  Kirkbride,  5  Dill.  116 ;  <  atlin 
gagor  in  possession  to  replenish  the  v.  Currier,  5  Fed.  < 'as.  300,  1  Saw- 
stock  will  not  render  such  mortgage  yer  7. 

valid.      Greenebaum   v.  Wheeler,  90  'Southard  v.  Benner,  72  N.  5 

111.  296  ;  Gallagher  v.  Rosenfield,  47  S.    P.    Russell  v.  Winne,  37  N.  5 

Minn.  507.  50  N.  W.  Rep.  696.  '  Brackett    v.  Harvey,  !U  N.  Y    224. 

-  Edgell  v.   Hart,  9  N.  Y.  213;  Mc-  5  99  N.   Y.  172. 
Lean  v.   Lafayette  Bank,    3  McLean 


624  COMMENTS   IN   THE   CASES.  §351 

is  valid,  so  that  it  can  be  enforced  between  the  parties  or 
not  ;  for  whether  valid  or  invalid,  it  is  equally  effectual 
to  show  the  fraudulent  purpose  for  which  the  mortgage 
was  given,  and  the  fraudulent  intent  which  characterizes 
it.  It  is  always  open  to  creditors  to  assail,  by  parol  evi- 
dence, a  mortgage  or  a  bill  of  sale  of  property  as  fraudu- 
lent and  void  as  to  them.  While  between  the  parties 
the  written  contract  may  be  valid,  and  the  outside  parol 
agreement  may  not  be  shown  or  enforced,  yet  it  may  be 
shown  by  creditors  for  the  purpose  of  proving  the  fraudu- 
lent intent  which  accompanied  and  characterized  the  giv- 
ing of  the  written  instrument.  It  is  usually  difficult  to 
prove  by  parol  an  agreement  in  terms  that  the  mortgagor 
may  continue  to  deal  in  the  property  for  his  own  benefit. 
Parties  concocting  a  fraudulent  mortgage  would  not  be 
apt  to  put  the  transaction  in  that  unequivocal  form.  But 
all  the  facts  and  circumstances  surrounding  the  giving  of 
the  mortgage,  and  the  subsequent  dealing  in  the  property 
with  the  knowledge  and  assent  of  the  mortgagee,  may  be 
shown,  and  they  may  be  sufficient  to  justify  the  court  or 
jury  in  inferring  the  agreement ;  and  so  the  parol  agree- 
ment was  inferred  in  all  the  cases  which  have  come  under 
our  observation."  The  intent  to  defraud  and  the  power 
of  sale  must  be  found  to  have  existed  at  the  time  the 
mortgage  was  made,  and  the  subsequent  conduct  of  the 
mortgagor  is  relevant  only  in  so  far  as  it  shows  the  exist 
ence  of  such  intent  ab  initio} 

§  351.  Comments  in  the  cases. —  Chief-Justice  Parker,  in 
speaking  of  these  shifting  liens,  observes  that  "  if  this 
doctrine  were  admitted,  a  mortgage  of  personal  property 
would  be  like  a  kaleidoscope,  in  that  the  forms  repre- 
sented would  change  at  every  turn  ;  but,  unlike  that 
instrument,  in    that   the   materials  would  not  remain  the 


1  Filebeck  \.  Bean, 45  .Minn.  307,47     :;i  tfeb.  44:'.,  51  X.  W.  Rep.  972 ;  State 
X.  W.  Rep.  969  ;    Whitney   v.   Levon,      v.  Roever,  55  Mo.  App.  448. 


§  352  OPPOSING    Rl   II-.    \\h   .   \-i 

same."1  The  objection  may  be  re-stated,  to  the  efl 
that  the  mortgagor  may  dispose  of  the  property,  defeat 
the  mortgage,  and  put  the  money  in  his  own  pocket;  but 
if  he  refuses  to  pay  a  debt,  and  creditors  seize  the  prop- 
erty in  execution  against  his  will,  the  mortgagt  in 
and  restores  it  to  the  debtor.2  Again,  it  is  said  tliat 
there  is  no  specific  lien,  but  "a  floating  mortgage,  which 
attaches,  swells,  and  contracts,  as  the  stock  in  tra 
changes,  increases,  and  diminishes;  or  may  wholly  expire 
by  entire  sale  and  disposition,  at  the  will  of  the  mort- 
gagor."3 Such  stipulations  are  not  only  inconsistent 
with  the  idea  of  a  mortgage,  but  tend  inevitably  to  give 
a  fraudulent  advantage  to  the  debtor  over  his  other 
creditors.4 

§  352.  Opposing  rule  and  cases.  --  The  rule  embodied  in 
Robinson  v.  Elliot5  has,  however,  been  a  subject  of 
much  discussion  and  dissension.  It  seems  to  be  conceded 
in  the  great  mass  of  the  cases,  that  an  agreement  for  the 
retention  of  possession,  with  power  of  disposition  by  the 
mortgagor,  may  constitute  evidence  of  fraud,  proper  to 
be  considered  by  the  jury  or  the  court  as  a  fact  in  con- 
nection with  all  the  circumstances  arising  in  each  particu- 
lar case.  The  contention  against  the  rule  in  Robinson 
v.  Elliott  is  that  the  agreement  does  not  render  the 
instrument  vox  A  per  se,  or  as  matter  of  law  or  conclusively 
fraudulent,  and  that  whether  it  is  fraudulent  in  fact  or 
not,  should  be  "decided  upon  all  the  evidence,  including, 
of  course,  the  terms  of  the  instrument  itself.'" 


1  Ranlett  v.  Blodgett,  1?  N.  H.  ■S3  Wall.  518.  See  Means  v.  Dowd, 
305  ;  Mercantile  Trust  Co.  v.  Wood,  8  128  U.  S.  284,0  S.  <  !.  Rep.  65;  Etheridge 
C.  C.  A.  658,  60  Fed.  Rep.  346.  v.  Sperry,  139  U.  S.  266,  LI  S.  C.  Rep. 

2  Collins  v.  Myers,  16  Ohio  547.  565. 

3  Collins    v.    Myers,    16    Ohio   554;  6  Hughes    v.    Cory,    20    tow 
McConihe  v.   Derby,  62  Hun  (N.  Y.)  410,  per  Dillon.  J.  ;    Bret!  v.  Carter,  2 
90,  16  N.  Y.  Supp.  474.  Lowell.  458  :  Gay  v.  Bidwell,  7  Mich. 

4Tennessee  Nat.  Bank    v.   Ebbert,  519;  Googins   v.   Gilmore,  17    Me.   9\ 

9  Heisk.  (Tenn.)  153.  Clark    v.   Eyman,  55    towa   II.   '    N. 
40 


626  OPPOSING    RULE   AND   CASES.  §  353 

§  353-  —  Lowell,  J.,1  seemed  ''to  doubt  both  the  gene- 
rality and  the  justice"  of  the  rule  stated  by  Davis,  J.,  in 
Robinson  v.  Elliott,2  and  regarded  the  doctrine  as  sub- 
stantially settled,  that  when  a  vendor  or  mortgagor  was  per- 
mitted to  retain  the  possession  and  control  of  his  goods 
and  act  as  apparent  owner,  the  question  whether  this  was 
a  fraud  or  not  was  one  of  fact  for  the  jury.  The  court 
observed:  "A  conveyance  for  a  valuable  present  con- 
sideration is  never  a  fraud  in  law  on  the  face  of  the  deed, 
and  if  fraud  is  alleged  to  exist,  it  must  be  proved  as  a 
fact."  It  is  considered  plain  that  the  doctrine  of  Robinson 
v.  Elliott  "virtually  prevents  a  trader  from  mortgaging 
his  stock  at  any  time  for  any  useful  purpose;  for  if  he 
cannot  sell  in  the  ordinary  course  of  trade,  or  only  as  the 
trustee  and  agent  of  the  mortgagee,  he  might  as  well 
give  possession  to  the  mortgagee  at  once  and  go  out  of 
business." 

It  is  to  be  noticed  that  the  court  by  this  sentence 
expresses  the  belief  that  shifting  liens  upon  merchandise, 


W.  Rep.  386  ;  Fletcher  v.  Powers,  131  275,   11   S.  C.  Rep.  565.     See  s.  C.  17 

Mass.  333  :  Briggs  v.  Parkman,  2  Met.  Alb.  L.    J.   359,  and  cases  cited.     It 

(Mass.)  258;  Jones   v.   Huggeford,    3  may    be    observed    that    Dillon,  J., 

Met.  (Alass.)  515  ;  Hunter  v.  Corbett,  adopted  the  other  rule  when  sitting 

7  U.  C.  Q.  B.  75  ;  Miller  ads.  Pancoast,  as   a  circuit  judge.     He    said:    "A 

29  N.  J.  Law,  250  ;  Price  v.  Mazange,  conveyance  of   personal  property  to 

31  Ala.  701  ;  Sleeper  v.  Chapman,  121  secure  creditors,   when   the  grantor, 

Mass.  404  ;  People  v.  Bristol,  35  Mich.  by  the  understanding  of  the  parties, 

28 ;  Wingler  v.  Sibley,  35  Mich.  231  ;  expressed  or  implied,  is  to  remain  in 

Hedman   v.    Anderson,    6   Neb.    392 ;  possession   of    the   property,    with   a 

Cheatham  v.  Hawkins,  76  N.  C.  335;  power  of  sale,  is  void  upon  a  princi- 

Mitchell    v    Winslow,    2    Story   647;  pie  of  public  policy  embodied  in  the 

Miller  v.  Jones,  15  N.  B.  R.  150  ;  Bar-  State,  irrespective  of  any  question  of 

run  v.  Morris,  14  N.  B.  R.  371  ;  Frank-  actual     and     intended     fraud."      Re 

houser  v.  Ellett,  22  Kan.  127,  31  Am.  Kirkbride,  5  Dill.  117. 

Rep.  171;    Willams  v.  Winsor,  12   R.  'Brett   v.    Carter,    2    Lowell   458; 

I    '.i  :   Sherwin    v.  (Jaghagen,  39  Neb.  Francisco  v.  Ryan,  54  Ohio  St.  313; 

57  X.  W.  Rep.   1005;   Jaffrav  v.  Peoples' Savings  Bk.  v.  Bates,  120  U. 

Greenbaum,   64    [owa  492,  20  N.   \V.  S.  561,  7  S.  C.  Rep.  679. 

Rep.  775  :    v'anmeter  v.  Estill.  7*  Ky.  222  Wall.  513. 
iv, :   Etheridge  v.  Sperry,  139  O.  S. 


§  353  OPPOSING    RULE    AND    CASKS. 

which  open  and  close  at  the  will  of  the  mortgagor,  are 
not  necessarily  fraudulent  contrivances  devised  to  defeat 
creditors;  on  the  contrary,  such   mortg  ;eem   to   be 

contemplated  as  capable  of  subserving  a  "useful  pur- 
pose." Many  of  the  cases,  however,  which  follow  Brett 
v.  Carter,  in  holding  that  fraud  is  a  question  of  fact,  con- 
cede, and  often  expressly  state,  that  contrivances  of  this 
class  are  convenient  covers  for  fraud  upon  creditors.  It 
seems  to  have  been  admitted  in  Brett  v.  Carter,1  that 
there  was  no  fraud  in  fact  as  it  is  commonly  termed  : 
that  the  transaction  showed  that  all  the  stock,  present  and 
future,  was  hypothecated  to  the  payment  of  a  certain  debt 
by  instalments.  "No  offer  is  made,"  said  Lowell,  J., 
"to  prove  that  any  one  was  deceived,  or  even  was  igno- 
rant of  the  mortgage;  but  I  am  asked  to  find  fraud  in 
law,  when  I  know,  and  it  is  admitted,  there  was  none  in 
fact."  The  court  cites  Mr.  May's  treatise  as  authority 
for  the  statement  that  fraud  is  a  question  of  fact,*  but 
omits  to  note  that  the  learned  author  was  on  the  page 
cited  discussing  the  question  of  the  effect  of  the  simple 
retention  of  possession,  and  fails  to  note  the  following 
observation  :3  "The  rule  seems  to  be  that  where  there 
is  an  absolute  conveyance,  and  the  grantor  remains  in 
possession  in  such  a  way  as  to  be  able  to  use  the  goods  as 
his  own,  it  is  always  void  against  creditors,  even  though 
made  on  valuable  consideration.4 

In  Etheridge  v.  Sperry,5  Mr.  Justice  Brewer  said  : 
"Indeed  if  this  were  an  open  question,  we  could  not  be 
blind  to  the  fact  that  the  tendency  of  this  commercial 
age  is  towards  increased  facilities  in  the  transfer  ol 
property,  and  to  uphold  such  transfers  so  far  as  they  are 
made  in  good  faith  ;  and  it  is  at  least  worthy  of  thought, 

1  2  Low.  458.  "See  Pierce  on    Fraudulent    Mort- 

,J  May  on  Fraudulent  Conveyances,  gages  of  Merchandi 

p.  106.  5139  L.  S.  'Ill,  11  s.  C.  Rep.  566. 
3  Ibid.  p.  100. 


628  THE    PRINCIPLE    INVOLVED.  §  354 

whether  the  rulings  made  by  the  Supreme  Court  of  Iowa 
do  not  tend  to  make  chattel  mortgages  more  valuable  for 
commercial  purposes,  without  endangering  the  rights  of 
unsecured  creditors.  The  law  now  generally  requires  a 
record  of  all  such  instruments,  and  that,  like  the  record- 
ing of  a  real  estate  mortgage,  gives  notice  to  all  parties 
interested  of  the  fact' and  extent  of  incumbrances.  Why 
should  a  transaction  like  this  be  condemned,  if  made  in 
good  faith  and  to  secure  an  honest  debt?  The  owner  of 
a  stock  of  goods  may  make  an  absolute  sale  of  them  to 
his  creditor,  in  payment  of  a  debt  If  an  absolute,  why 
not  a  conditional,  sale,  with  such  conditions  as  he  and  his 
creditor  may  agree  upon  ?  As  between  the  parties  no 
court  would  question  this  right,  or  refuse  to  enforce  the 

conditions If  the  question  were  open,   or  a  new 

one,  unaffected  by  any  settled  law  of  the  State,  we  incline 
to  the  opinion  that  the  question  is  not  one  of  law,  so 
much  as  it  is  one  of  fact  and  good  faith."1  The  ideas 
advanced  by  Judge  Lowell  in  Brett  v.  Carter2  are  cer- 
tainly being  favored,  and  are  said  to  prevail  in  one-half 
of  the  States  of  the  Union. 

§  354.  Discussion  of  the  principle  involved.  —  It  is  foreign 
to  our  design  to  kindle  the  smouldering  embers  of  this 
discussion  into  new  flame.  It  will  be  seen  at  a  glance 
that  the  subject-matter  of  contention  in  the  controversy 
is  the  much-debated  distinction  between  fraud  in  law  and 
fraud  in  fact.  The  conclusion  is  reached  in  our  opening 
chapter,3  that  this  distinction  is  largely  mythical,  and 
relates  only  to   the  character  and  quantity  of  the  proof 


1  See  Torbert    v.  Hayden,  11  Iowa  426,  8  S.  C.  Rep.  193  ;  Smith  v.  Craft, 

435  ;    Bughes   v.  <  !ory,  20  Iowa  399  ;  123  U.  8.  436,  8  S.  C.  Rep.  196  ;  Barron 

<  Hark  v.  Hyman,  55  Iowa  14,  7  N.  W.  v.  Morris,  14  Nat.  Bk.  Reg.  371  ;  Miller 

Rep.   386;    Sperry    v.   Etheridge.    6:}  v.  Jones,  15  Nat.  Bk.  Reg.  150. 
[owa  543,  19  N.  \V.  Rep.  657  ;  Jaffraj  22  Lowell  458. 

v.  Greenbaum,  64  Iowa  492,  JON.  W.  'See  §§9,  10. 

Rep.  77.")  :  Jewell  v.  Knight,  123  U.  S. 


§354  THE    PRINCIPLE    INVOLVED. 

adduced  to  nullify  the  transaction.  Where  the  evidence 
is  of  such  a  conclusive  nature  that  the  fraudulent  intent 
unmistakably  fastens  its  fangs  upon  the  transfer,  so  that  a 
verdict  or  finding  contrary  to  the  evident  evil  design  so 
established  would  be  erroneous,  the  court  pronounces  the 
transaction  covinous,  and  imputes  the  fraudulent  intent 
to  the  parties  in  obedience  to  the  principle  of  law  that 
they  must  have  contemplated  the  natural  and  necessary 
consequences  of  their  acts.  Where  the  facts  an;  not  con- 
troverted and  do  not  admit  of  a  construction  consistent 
with  innocence,  surely  the  burden  is  cast  upon  the  court 
to  declare  the  result.  There  is  no  question  of  intention 
to  be  submitted  to  the  jury.  As  the  mortgage  shows 
upon  its  face  that  it  was  not  designed  by  the  parties  as  an 
operative  instrument  between  them,  its  only  effect  is  to 
prejudice  others.  The  court  should  "pronounce  it  void, 
for  the  reason  that  the  evidence  conclusively  shows  it 
fraudulent."  1  It  is  because  such  trusts  are  calculated  to 
deceive  and  embarrass  creditors,  because  they  are  not 
things  to  which  honest  debtors  can  have  occasion  to 
resort  in  sales  of  their  property,  and  because  they  con- 
stitute the  means  which  dishonest  debtors  commonly  and 
ordinarily  use  to  cheat  their  creditors,  that  the  law  does 
not  permit  a  debtor  to  say  that  he  used  them  for  an  honest 
purpose  in  any  case.2  Chief-Justice  Ryan  said  :  "  Intent 
does  not  enter  into  the  question.  Fraud  in  fact  goes  to 
avoid  an  instrument  otherwise  valid.  But  intent,  bona 
fide  or  mala  fide,  is  immaterial  to  an  instrument  per  se 
fraudulent  and   void   in   law.     The   fraud   which  the  law 

imputes  to  it  is  conclusive Fraud  in  fact  imputed 

to  a  contract  (valid  on  its  face)  is  a  question  of  evidence  ; 
not  fraud   in   law.     And   no  agreement  of  the  parties  in 


1  Russell  v.  Winne,  37  N.  Y.  595.  s  Coolidge  v.  Melvin,  42  X.  II.  520 

Winkley  v.  Hill,  9  N.  H.  31. 


630  SALES   FOR    MORTGAGEE'S   BENEFIT.        §§  355,  356 

parol  can  aid  a  written  instrument  fraudulent  and  void  in 
law." 1 

§  355.  Authorizing  sales  for  mortgagee's  benefit. — Three 
cases,'  decided  in  the  New  York  Court  of  Appeals  in 
rapid  succession,  and  approved  in  the  same  court  in  a 
later  case,3  held  that  a  chattel  mortgage  was  not  per  se 
void  because  of  a  provision  contained  in  it  allowing  the 
mortgagor  to  sell  the  mortgaged  property  and  account  to 
the  mortgagee  for  the  proceeds,  and  apply  them  to  the 
mortgage  debt.4  "  These  cases,''  says  Finch,  J.,  "  went 
upon  the  ground  that  such  sale  and  application  of  pro- 
ceeds is  the  normal  and  proper  purpose  of  a  chattel 
mortgage,  and  within  the  precise  boundaries  of  its  lawful 
operation  and  effect.  It  does  no  more  than  to  substitute 
the  mortgagor  as  the  agent  of  the  mortgagee,  to  do 
exactly  what  the  latter  had  the  right  to  do,  and  what  it 
was  his  privilege  and  his  duty  to  accomplish."  5  It  may 
be  observed  that  a  subsequent  judgment-creditor  is 
entitled  to  have  an  account  of  the  sales  so  made  stated, 
and  to  have  the  amount  thereof  applied  to  reduce  the 
mortgage  debt,6  and  the  mortgagee  must  be  charged  with 
the  amount  of  any  goods  sold  on  credit.7 

§  356.  Sales  upon  credit.  —  The  rule  being  established 
that  the  mortgagor  may  sell  the  property  and  account  for 


1  Blakeslee    v.    Rossnian,    43  Wis.  5  Brackett  v.  Harvey,  91  N.  Y.  221  ; 

124.  s.    P.  Wilson   v.    Sullivan,  58   N.  H. 

*  Ford  v.  Williams,  24  N.  Y.   359  ;  260  ;    Hawkins    v.   Hastings  Bank,  1 

Conkling   v.   Shelley,   28  N.  Y.  360;  Dillon  462  ;  Overman  v.  Quick,  8  Biss. 

Miller  v.  Lock  wood,  32  N.  Y.  293.  134  ;  Abbott  v.  Goodwin,  20  Me.  408  ; 

3  Brackett  v.  Harvey,  91  N.  Y.  221.  Crow  v.  Red  River  Co.  Bank,  52  Tex. 
See  Hawkins  v.  Hastings  Bank,  1  362;  Fletcher  v.  Martin,  126  Ind.  55, 
Dillon  462  ;  Spaulding  v.  Keyes,  125  25  N.  E.  Rep.  886  ;  Lane  v.  Starr,  1  S. 
N.  V.  117,  26  N.  E.  Rep.  15  ;  Gleason  Dak.  107,  45  N.  W.  Rep.  212. 

v.  Wilson,  48  Kan.  500,  29  Pac.  Rep.  6  Ellsworth  v.   Phelps,    30  Hun  (N. 

698.  Y.)  646. 

4  See  Prentiss  Tool  and  Supply  Co.  7  Warren  v.  His  Creditors,  3  Wash. 
v.  Schirmer,  186  N.  Y.  305,  32  N.  E.  St.  48,  28  Pac.  Rep.  257. 

Rep.  849. 


§  35^  SALES    UPON    CREDIT. 


the  proceeds  to  the  mortgagee,  and  that  such  an  arran 
ment  is  not  fraudulent  in  law  if  made  with  an  hon 
intention,1  another  phase  of  the  controversy  must  be  i 
sidered.  What  will  be  the  effect  if  the  mortgagor  is  not 
restricted  to  sales  for  cash,  but  is  allowed  to  sell  upon 
credit,  in  his  discretion?  Elsewhere  it  is  shown  that 
general  assignments  permitting  the  assignee  to  sell  upon 
credit  are  regarded  as  fraudulent,  because  such 
ments  hinder  and  delay  creditors  and  prevent  the  imme- 
diate application  of  the  debtor's  property  to  the  payment 
of  their  claims.2  The  same  principle  has  been  extended 
and  applied  to  sales  of  the  mortgaged  property  made  upon 
credit  by  the  mortgagor  for  the  mortgagee.  The  arrange- 
ment is  calculated  to  keep  the  creditors  at  bay,  and  is 
regarded  as  fraudulent /^r  se.z  If,  however,  the  accounts, 
where  the  sales  are  effected  on  credit,  are  immediately 
transferred  to  the  mortgagee  at  their  face,  and  credited 
or  allowed  upon  the  mortgage  debt,  the  objectionable 
elements  of  the  transaction  are  eliminated,  and  the 
arrangement  will  be  tolerated.4  In  Brown  v.  Guthrie,5 
Finch,  J.,  said  :  "  The  dealing,  therefore,  must  be  treated 
as  a  chattel  mortgage  by  the  debtor  to  his  creditor,  the 
consideration  of  which  was  evidenced  and  settled  by  the 
outside  agreement.  So  regarded,  the  findings  declare  it 
to  have  been  in  good  faith  and  not  fraudulent.  The 
arrangement  for  the  sale  on  credit  was  made  harmless  by 
the  stipulation  that  Guthrie  should  take  the  credits  as 
cash,  and  himself  bear  the  delay,  and  risk  the  solvency  of 
the  purchasers."  6 


'Ford   v.  Williams.  24  N.  Y.  359;  3  City  Bank  v.    Westbury,    i»i   Mm. 

Brackett  v.    Harvey,    91  N.   Y.  221  ;  (N.  Y.)  458. 

Hawkins  v.  Hastings  Bank,  1  Dill.  462.  4  Caring  v.  Richmond,  22  Bun  (N. 

4  Nicholson  v.  Leavitt,  6  N.  Y.  510;  Y.)  370. 

Barney  v.  Griffin,  2  N.  Y.  365  ;  Dun-  5  110  N.  Y.  435,  443. 

ham  v.  Waterman,  17  N.  Y.  21.     See  6  Citing  Brackett  v.   Barvey,  91   N 

§§  332,  333.  Y.  214. 


632  CHANGE  OF  POSSESSION.  §§  356a-357 

§  356a.  Secret  trust.  —  In  a  controversy  in  Nebraska, 
where  the  chattel  mortgage  covered  all  the  debtor's  prop- 
erty, and  was  not  recorded,  and  the  mortgagee  took 
formal  possession  and  held  the  same  subject  to  the 
direction  of  the  mortgagor,  until  by  sale  or  lease  the 
debt  secured  should  be  paid,  the  mortgagor  to  receive 
the  balance,  the  arrangement  was  held  fraudulent  as  to 
the  other  creditors.1 

§  356b.  Change  of  possession.  —  In  most  States  it  is  pro- 
vided by  statute  that  a  mortgage  of  chattels  not  accom- 
panied by  a  change  of  possession  shall  be  void  as  against 
creditors  unless  the  mortgage  shall  be  filed.  It  is  a 
necessary  feature  of  the  possession  to  which  the  statute 
refers  that  it  should  be  open,  visible  and  free  from  con- 
cealment. It  then  becomes  notice  in  its  highest  form  of 
the  claim  of  the  possessor,  and  the  constructive  notice 
which  arises  from  the  filing  of  the  mortgage  becomes 
unnecessary.  But  when  the  change  of  possession  is  not 
of  that  character,  so  that  it  fails  to  disclose  itself  to  others 
than  the  immediate  parties  to  the  transfer,  however  honest 
they  may  have  been  in  their  intentions,  the  situation 
exists  which  the  statute  was  designed  to  prevent." 

§  357-  Possession  —  Independent  valid  transactions.  — 
Manifestly  selling  or  taking  possession  of  the  property 
under  and  by  virtue  of  the  fraudulent  mortgage  cannot 
purge  it  of  the  vice  of  fraud.3     The  title  remains  fraudu- 


1  Bacon  v.  P.  Brockman  Com.  Co.,  Supreme  Court  of  New  York,  in  Dela- 

18  Neb.  365,  67  N.  W.  Rep.  304.  ware  v.  Ensign,  21  Barb.  (N.  Y.)   35, 

'J  Tedesco  v.  Oppenheimer,  15  Misc.  and  Dutcher  v.   Swartwood,  15  Hun 

(N.    Y.)  524,  37  N.    V.    Supp.     1073;  (N.  Y.)  31;  the  Court  of  Appeals  of  New 

Crandall    v.    Brown,    18  Hun  (N.  Y.)  York,  in  Parshall  v.  Eggert,  54  N.  Y. 

461  ;    Hale  v.   Sweet,    40  N.    Y.   97  ;  18  ;  the  Supreme  Court  of  Wisconsin, 

Steele  v.  Benhain,  84  N.  Y.  634.  in  Blakeslee  v.  Rossman,  43  Wis.  116, 

8  In    Wella    v.    Langbein,    20    Fed.  and  the  Supreme  Court  of  Minnesota, 

Rep.    183,    186,    the    court    observes:  in  Stein  v.  Munch,  24  Minn.  390,— all 

"  The  Supreme  Court  of  California,  in  hold  that  where  the  mortgage  is  void 

Chenery   v.    Palmer,   6  Cal.  123;  the  for  fraud  as  to  creditors,  taking  pos- 


§  357  POSSESSION. 

lent  and  voidable  still  as  against  creditors.1  Before  and 
after  taking  possession,  the  title  of  the  mortgagee  i 
equally  upon  the  mortgage,  and  the  question,  as  regards 
creditors  of  the  mortgagor,  is  the  validity  of  his  paper 
title.  The  mortgagee's  possession  under  the  mortg 
is  as  good  or  as  bad  as  the  mortgage  itself,  and  the  court 
has  not  the  power  to  transmute  a  void  mortgage  into  a 
valid  pledge.2  In  Stephens  v.  Perrine,3  the  court  says  : 
"  The  mortgage,  as  to  the  creditors  of  the  mortgagor,  was 
always  void.  It  continued  to  be  void  notwithstanding  the 
fact  that  the  mortgagee  assumed  to  take  possession  under 
and  to  sell  the  property  by  virtue  of  such  void  instru- 
ment  I    cannot    see    the    force    of  the   reasoning 

which,  while  admitting  that  the  mortgage  is  void  as  to 
creditors,  nevertheless  asserts  that  a  title  to  the  property 
covered  by  it  may  be  obtained  by  the  mortgagee  by  pro- 
ceedings taken  under  it  and  which  assert  the  validity  of 
such  instrument If  void,  what  right  has  the  mort- 
gagee, as  against  creditors,  to  take  possession  in  her  char- 
acter of  mortgagee  and  to  sell  or  dispose  of  propem 
described  in  it?"  But  even  in  cases  where  the  mortgage 
is  fraudulent,  if  the  mortgagee  repudiates  the  instrument 
and  casts  it  aside,  and  obtains  a  pledge  of  the  goods, 
accompanied  by  delivery  and  an  open  change  of  posses- 
sion, and  by  a  distinct  agreement  subsequent  to  and  inde- 


session  thereunder,  before  a  lien  is  ob-  448;  Hedges  v.  Polhemus,  9  Misc.  (N. 

tained  on  the  property  in  favor  of  a  Y.)  680,  30   N.    Y.   Supp.  556;   In  n 

creditor,  will  not  render  it  valid.  The  Forbes,  5  Biss.  510  :   Janvrin  v.  Fi 

fraud  existing  in  the  mortgage  itself  49  N.  H.  340  ;  Wells  v.   Langbein,  30 

vitiates  all  steps  taken  under  it."  Fed.    Rep.    183,    186 ;  Mandeville  v. 

1  Smith  v.  Ely,  10  N.  B.  R.  563.  Avery,  124  N.  Y.  376,  26  N.  K.   Rep. 

2  Blakeslee  v.  Rossman,  43  Wis.  951  ;  Karst  v.  Gane,  136  N.  Y.  816,  82 
127.  See  Robinson  v.  Elliott,  22  Wall.  N.  E.  Rep.  107:;.  But  compare  Bald 
513  ;  Dutcher  v.  Swartwood,  15  Hun  win  v.   Flash,  59   Miss.  66,  and  < 

(N.  Y.)  31  ;  Stimson  v.  Wrigley,  86  N.  cited. 

Y.  332  ;  State  v.  Roever,  55  Mo.  App.  s  143  N.Y.  476,  480.  :«•  N.  E.  Rep.  11 


634  RIGHT   OF   REVOCATION.  §§  358,  359 

pendent  of  the  mortgage,  his  rights  will  be  protected  as 
against  the  other  creditors.1 

§  358.  Right  of  revocation  —  Reservations.  —  We  have 
seen  that  a  debtor,  before  any  lien  attaches  in  favor  of  cred- 
itors, possesses  the  right  to  make  any  disposition  of  his 
property.3  The  contract,  however,  by  which  he  parts 
with  it  must  be  absolute  and  unconditional,  for  if  he 
retain  the  right  to  revoke  the  contract  and  resume  the 
ownership  of  the  property,  the  reservation  is  considered 
as  inconsistent  with  a  fair,  honest  and  absolute  sale,  and 
renders  the  transfer  fraudulent  and  void.3  In  the  great 
case  of  Riggs  v.  Murray,4  in  which  the  various  instru- 
ments of  transfer  contained  powers  of  revocation,  Chan- 
cellor Kent  held  the  transfers  void,  saying  that  there  was 
a  necessary  inference  of  a  purpose  to  "  delay,  hinder  or 
defraud  creditors,"  that  the  only  effect  of  these  assign- 
ments was  "  to  mask  the  property  ;"  and  that  such  powers 
of  revocation  are  fatal  to  the  instrument  and  poison  it 
throughout,  appears  to  have  been  well  established  by 
authority.5  So  a  deed  reserving  the  right  to  the  grantor 
to  sell  and  convey  the  property  without  the  consent  of  the 
grantee,  is  inconsistent  with  the  idea  of  a  sale,  and  may 
be  avoided  by  creditors.6 

§  359.  Rule  as  to  consumable  property. — The  mortgaging 
of  property,  the  use  of  which  involves  its  consumption,  is 


1  Pettee  v.  Dustin,  58  N.  H.  309  ;  6  Compare  Smith  v.  Conkwright,  28 
Brown  v.  Piatt,  8  Bosw.  (N.  Y.)  324;  Minn.  23;  Shannon  v.  Common- 
First  Nat.  Bank  v.  Anderson,  24  wealth,  8  S.  &  R.  (Pa.)  444  ;  The  King 
Minn.  435  ;  Baldwin  v.  Flash,  58  Miss.  v.  Earl  of  Nottingham,  Lane  42  ; 
593  ;  Bowdish  v.  Page,  153  N.  Y.  104  ;  Smith  v.  Hurst,  10  Hare  30. 
Nat.  Shoe  &  Leather  Bank  v.  August,  6  Fisher  v.  Henderson,  8  N.  B.  R. 
54  N.  J.  Eq.  182.  175.     Compare  Henderson  v.  Down- 

3  See  §  52.  ing,  24  Miss.  106  ;  Coolidge  v.  Melvin, 

3  West  v.  Snodgrass,  17  Ala.  554.  42  N.  H.   510  ;  Donovan  v.    Dunning, 

4  2  Johns.  (N.  Y.)  565.  But  see  69  Mo.  436;  Lukins  v.  Aird,  6  Wall. 
Murray  v.  Riggs,  15  Johns.  (N.  Y.)  78.  See  May  on  Fraudulent  Convey  - 
571.  ances,  93,94.   See  §  11,  and  cases  cited. 


§  359a  DISTINCT   CLAIMS. 

an  evidence  of  fraud  of  much  weight  Unless  satisfac- 
torily explained  it  will  cause  the  condemnation  of  the 
instrument.1  Of  course  articles  in  their  nature  subject 
to  be  consumed  in  their  use  maybe  mortgaged  without 
any  imputation  of  fraud,  provided  they  are  not  to  be  used, 
and  may  be  kept  without  damage  until  the  mortgage  debt 
shall  become  payable.2  If,  however,  the  mortgage  cov< 
articles  which  would  perish  or  be  destroyed  before  the 
debts  secured  by  the  mortgage  mature,  it  becomes  mani- 
fest that  the  object  was  not  to  apply  these  things  to  the 
payment  of  the  mortgage,  but  to  secure  the  debtor  in 
their  possession  and  enjoyment.8 

§  359a.  Distinct  claims.  —  Manifestly  an  honest  creditor 
does  not  lose  his  security  because  the  mortgage  consti- 
tuting the  security  embraces  the  separate  claim  of  a  party 
who  participated  with  the  mortgagor  in  perpetrating  a 
fraud.4 


'Farmers'    Bank    v.    Douglass,    19  9  Misc.  (N.  Y.)  680,  30  N.  V.  Sui.il 

Miss.   540  ;  Brockenbrough  v.  Brock-  556. 

enbrough,   31  Gratt.  (Va.)  590 ;  Som-  2Robbins  v.  Parker,  3  Met.  (Mi 

merville  v.    Horton,  4  Yerg.  (Tenn.)  130.     Compare  Miller  v.  Jones,   15  N. 

550  ;    Shurtleff  v.  Willard,    19   Pick.  B.  R.  154. 

(Mass.)  202;    Robbins  v.    Parker,    3  3  Farmers'    Bank    v.    Douglass,    18 

Met.  (Mass.)  120.     See  Googins  v.  Gil-  Miss.  541.     See  Quarles    v.   Kerr,    11 

more,  47  Me.  14  ;  Putnam  v.  Osgood,  Gratt.  (Va.)  48. 

51  N.  H.  200;  Hedges  v.  Polhemus,  4  Morgan    v.  Worden,  145  tnd.  600. 


CHAPTER  XXIII. 


SPENDTHRIFT  TRUSTS. 


360.  Aversion  to  exemptions   other 

than  statutory. 

361.  Restraints  upon  alienation. 

"  i  Repugnant  conditions. 

363.  )       L    ° 

364.  Nichols    v.    Eaton ;    the    point 

actually  involved. 

365.  The  dictum  in  Nichols  v.  Eaton. 

366.  The  correct  rule. 


§367.  Broadway    National    Bank    v. 
Adanis. 
367a.  Spread  of  the  doctrine. 
3676.  New  York    rule    as    to    trust 

income. 
368.  Spendthrift  trusts  in   Pennsyl- 
vania. 
368a.  Powei's  —  When  not  assets. 


"The  general  introduction  of  spendthrift  trusts  would  be  to  form  a  privileged  class,  who  could 
indulge  in  every  speculation,  could  practice  every  fraud,  and  yet,  provided  they  kept  on  the  safe 
side  of  the  criminal  law,  could  roll  in  wealth.  They  would  be  an  aristocracy,  though  certainly 
the  most  contemptible  aristocracy  with  which  a  country  was  ever  cursed." —  Professor  Gray  in 
Restraints  on  Alienation,  §  262. 

"  It  is  a  settled  rule  of  law  that  the  beneficial  interest  of  the  cestui  que  trust,  whatever  it  maybe, 
is  liable  for  the  payment  of  his  debts.  It  cannot  be  so  fenced  about  by  inhibitions  and  restrictions 
as  to  secure  to  it  the  inconsistent  characteristics  of  right  and  enjoyment  to  the  beneficiary  and 
immunity  from  his  creditors." —  Mr.  Justice  Swayne  in  Nichols  v.  Levy,  5  Wall.  441;  over- 
shadowed in  Nichols  v.  Eaton,  91  U.  S.  716. 

§360.  Aversion  to  exemptions  other  than  statutory. — 
Aside  from  statutory  exemptions  trivial  in  amount,1  the 
idea  of  the  existence  of  rights  of  property  of  any  kind, 
legal  or  equitable,  in  a  debtor,  which  cannot  be  reached 
by  creditors  and  applied  toward  the  satisfaction  of  debts, 
is  or  should  be  abhorrent  to  modern  convictions  of  jus- 
tice toward  the  creditor  class.  This  sentiment  is  reflected 
in  the  legislation  limiting  exemptions  to  very  small  sums. 
The  personal  liberty  of  the  debtor  being  no  longer  in 
danger,  and  his  body  being  exempt  from  torture  or 
slavery  at  the  hands  of  infuriated  creditors,  there  exists 


1  See  §§  46-50,  365.  Arkansas, 
Kansas,  Texas  and  Nevada  are  States 
that  have  rather  liberal  exemption 
statutes.    Beyond  the  point  of  protect- 


ing absolute  necessaries,  sucli  statutes 
are  harmful  to  a  State,  as  they  frighten 
away  commerce  and  capital  and  de- 
stroy the  credit  of  the  people. 


§  360  AVERSION   TO    EXEMPTIONS. 

no  controlling  check  upon  his  recklessness  and  improvi- 
dence,1 other  than  his  sense  of  honor,  which  too  often 
proves  to  be  an  undeveloped  quantity.  This  is  the  sour,  e 
of  the  strong  tendency,  manifested  in  some  of  the  coui 
to  strengthen,  enlarge  and  perfect  the  creditors'  remedies 
and  recourses  against  the  property  and  interests  of  the 
debtor  class,  who  operate  under  the  guise  of  conti 
obligations,  skillfully  eluding  the  sharp  edges  of  the  stat- 
utes against  larceny.  The  plain  purpose  manifested 
in  our  modern  law  in  extending  relief  to  creditors  is  two- 
fold :  first,  to  enforce  the  creditors'  equitable  lien  upon  the 
debtor's  property  considered  as  somewhat  in  the  nature 
of  a  trust  fund;3  and  secondly,  to  inflict  a  species  of 
negative  punishment  upon  the  debtor  by  depriving  him 
of  the  personal  comforts  and  enjoyments  which  result 
from  the  possession  and  use  of  property  or  accumulated 
wealth.  This  latter  wise  and  necessary  policy  of  the  law 
has  been  almost  obscured  by  an  out-pouring  of  sentimental 
sophistry  in  the  courts.  There  should  be  no  spectacle 
more  revolting  to  the  mass  of  mankind,  and  especially  in 
a  community  such  as  ours,  than  that  of  a  bankrupt  or 
insolvent  debtor  revelling  and  dwelling  in  luxury,  and 
disporting  himself  with  the  proceeds  of  another  man's 
goods,  and  enjoying  a  trust  income  that  judicial  writs 
cannot  touch.  It  is  opposed  to  a  wise  public  policy  that 
a  man  ''should  have  an  estate  to  live  on,  but  not  an 
estate  to  pay  his  debts  with,"3  or  that  he  should  possess 
"  the  benefits  of  wealth  without  the  responsibilities."4 
Chief-Justice  Denio  said  :  "  It  is  against  general  principles 
that  one  should  hold  property,  or  a  beneficial  interest  in 
property,  by  such  a  title  that  creditors  cannot  touch  it." 

1  See  §  2.  4  Gray  on  Restraints  on  AJienation, 

2  See  Egery  v.  Johnson,  70  Me.  258  ;      p.  169. 

Seymour  v.  Wilson,  19  N.  Y.  418.  Rome  Exchange   Bank   v.  Barnes, 

3  Tillinghast   v.    Bradford.   5   R.  I.      4    Abb.    App.    Dec     (N.    Y.>  88,   ft, 
205,  212.  "That  grown  men  should  be  kepi  all 


638  AVERSION    TO    EXEMPTIONS.  §  360 

We  earnestly  protest  against  almost  every  line  of  these 
obnoxious  income  exemption  cases.  The  force  of  the 
bad  example  seems  to  be  forgotten  in  permitting  the 
growth  of  spendthrift  trusts.  The  spectacle  of  a  judg- 
ment-debtor living  unmolested  upon  protected  income,  or 
money  that  is  under  a  charm,  without  fleeing  from  his 
creditors  to  sanctuary  ground  as  of  yore,  is  not  calculated 
to  awaken  feelings  of  thrift,  or  to  inspire  habits  of  economy, 
in  other  people.  It  tends  rather  to  suppress  the  natural 
and  laudable  ambition  of  industrious  people  to  accumu- 
late property  through  the  usual  lawful  channels  of  intelli- 
gent enterprise,  having  due  consideration  for  the  rights 
of  creditors,  and  proper  respect  for  the  perils  of  insolvency, 
and  a  wholesome  dread  of  its  privations.  It  tends  also 
to  cheapen  regard  for  accumulated  wealth,  and  its  com- 
forts, considered  solely  as  an  honest  reward  for  skill  and 
patient  industry.  It  neglects  to  enforce  necessary  pre- 
cepts of  honesty.  It  lifts  the  profligate  insolvent  above 
the  class  in  which  his  own  achievements  would  place  him. 
and  clothes  him  with  borrowed  plumage  and  deceptive 
indicia  of  thrift. 

The  feelings  of  the  industrial  world  were  shocked  at 
the  dictum  of  Wright,  J.,  in  Campbell  v.  Foster,1  to  the 
effect  that  the  surplus  of  a  trust  fund  created  by  a  third 
party,  for  the  benefit  of  a  judgment-debtor,  was  not 
available  to  his  creditors.  The  more  recent  opinion  of 
Rapallo,  J.,  in   Williams  v.  Thorn,2  holding  that,  whether 


their  lives  in  pupilage,  that  men  not  '  35  N.  Y.361  ;  Howard  v.  Leonard, 

paying    their  debts    should    live    in  3  App.  Div.  (N.  Y.)  277,  38  N.  Y.  Supp. 

luxury     on     inherited     wealth,    are  363.    See  §  45. 

doctrines  as  undemocratic  as  can  well  570N.  Y.  270  ;  2d  Appeal,  81  N.  Y. 

be  conceived.     They  are  suited  to  the  381  ;  Wetmore  v.  Wetmore,  149  N.  Y. 

times  in  which  the  Statute  De  Donis  520,  44  N.  E.  Rep.  169  ;  Tolles  v.  Wood, 

was     enacted,     and    the     law     was  99  N.  Y.  616, 1  N.  E.  Rep.  251 ;  Thomp- 

administered   in  the  interest  of  rich  son  v.  Thompson,  52  Hun  (N.  Y.)  456  ; 

and    |". wilful     families."    Gray    <>n  Spindle  v.  Shreve.  Ill  U.  S.  546, 4S.  C. 

Restraints  on  Alienation,  p.  174.  Rep.  522;    Kilrov   v.  Wood,   42  Hun 


§  36l  RESTRAINTS    UPON    ALIENATION. 

the  trust  relate  to  realty  or  personalty,  the  surplus  income 
of  such  an  estate,  beyond  what  was  needed  for  the 
suitable  support  and  maintenance  of  the  cestui  que  trust 
and  those  dependent  upon  him,  could  be  reached  by  a 
creditors'  bill,  was  greeted  with  satisfaction,  as  being  good 
as  far  as  it  went.  A  tendency  is  manifesting  itself,  how- 
ever, to  close  another  source  of  possible  relief  to  credit 
ors,  by  the  classes  of  cases  already  referred  to1  and 
which  will  presently  be  considered  more  at  length,2  depriv- 
ing creditors  of  the  right  to  treat  powers  as  assets  and 
limiting  or  denying  their  right  to  reach  trust  income 
arising  from  third  parties.  First,  however,  we  will  glance 
at  the  authorities  which  discuss  the  rights  of  the  parties 
in  cases  where  property  has  been  conveyed  with  a  restraint 
imposed  upon  its  alienation,  or  an  attempt  has  been 
made  to  vest  it  in  the  grantee  without  subjecting  it  to 
liability  to  his  creditors. 

§  361.  Restraints  upon  alienation. — The  theory  of  the  law 
is  that  no  person  shall  be  permitted  to  enjoy  or  hold  any 
interest  in  property  to  which  the  incidents  of  ownership, 
i.  e.,  the  right  of  alienation  and  liability  to  the  claims  and 
remedies  of  creditors,  do  not  attach.3  A  condition  or 
proviso  in  a  grant  or  devise  that  the  land  shall  not  be 
subject  to  alienation,  attachment,  or  levy,  is  commonly 
treated  as  void.4     The  policy  of   the  law  will  not  permit 

(N.  Y.)  636;  Bunnell   v.   Gardner,   4  Am.    Law  Reg.    N.    S.    180;  and  the 

App.  Div.  (N.  Y.)  322;    Andrews  v.  learned  note  by  Henry  Wade  Rogers, 

Whitney,  82  Hun  (N.  Y.)  123,  31  N.  Y.  Esq.,   at    page    185,     reviewing    the 

Supp.  164;  Genetv.  Beekman,  45  Barb.  authorities.    Prof.  Gray  Bays  (Gray's 

(N.  Y.)   382  ;    Watkyns  v.  Watkyns,  Restraints  on  Alienation),  p.  14  :       \.B 

2Atykns96.   See  Arzbacher  v.  Mayer,  in  England,  so  in   America,  a  condi- 

53  Wis.  391,  10  N.  W.  Rep.  440.  tion,    or    a    conditional     limitation, 

1  See  §§  40,  45,  and  note,  restraining  the  owner  in  fee  simple 

2  See  §§  364-367.  from  selling  his  land,  is  bad. "    Potter 
3SeeChap.  II.  v.    Couch.  Ill    I'.   S.  296  ;  Munn 
4Blackstone     Bank     v.     Davis,  21      Hall,  97  N.  C.    806;   In  re  Watson  & 

Pick.  (Mass.)  42;  McCleary   v.  Ellis,      Woods,    14    Out,    48;    Kahanaii 

54  Iowa  311,   6  N.   W.  Rep.  571,  20     Kohala  Sugar  Co.,  6  Hawaiian  694 


640 


RESTRAINTS    UPON   ALIENATION. 


§36l 


property  to  be  so  limited  as  to  remain  in  a  party  for  life, 
free  from   the  incidents  of  property,  and  not  subject  to 


Helming  v.  Harrison,  13  Bush  (Ky.) 

723  ;   Smith    v.   Clark,    10  Mtl.    186 ; 
Gleason    v.     Fayerweather, ,  4    Gray 

(Mass.)  348 ;  Campau  v.  Chene,  1 
Mich.  400;  McDowell  v.  Brown,  21 
Mi>.  57;  Pardue  v.  (.livens,  1  Jones' 
Eq.  (N.  C.)  306  ;  Schermerhorn  v. 
Negus,  1  Denio(N.Y-)  448;  Lovett  v. 
Kingsland,  44  Barb.  (N.  Y.)  560; 
sub  n< >nt.  Lovett  v.  Gillender,  35  N. 
Y.  617:  Walker  v.  Vincent,  19  Pa. 
St.  369  ;  Williams  v.  Leech,  28  Pa. 
St.  89 ;  Naglee's  Appeal,  33  Pa.  St. 
89  ;  Jauretche  v.  Proctor,  48  Pa.  St. 
466  ;  Kepple's  Appeal,  53  Pa.  St.  211  ; 
Lario  v.  Walker,  28  Grant  (Out. )  216. 
These  cases  are  decisions  directly  in 
point,  and  dicta  to  the  same  effect  are 
found  in  abundance,  e.  g.,  in  Taylor  v. 
Mason,  9  Wheat.  325,  350;  Mc- 
Donogh  v.  Murdoch.  15  How.  367, 
412  ;  Andrews  v.  Spurlin,  35  Ind.  262, 
268  ;  Deering  v.  Tucker,  55  Me.  284, 
289  ;  Hawley  v.  Northampton,  8  Mass. 
3,  37 ;  Gray  v.  Blanchard,  8  Pick. 
(Mass.)  284,  289  ;  Van  Rensselaer  v. 
Dennison,  35  N.  Y.  393  ;  Turner  v. 
Fowler,  10  Watts  (Pa.)  825;  Reifsnyder 
v.  Hunter,  19  Pa.  St.  41  ;  Doebler's 
Appeal,  64  Pa.  St.  9  ;  Grant  v.  Car- 
penter, 8  R.  I.  36  ;  Doe  d.  Mclntyre 
v.  Mclntyre,  7  IT.  C.  Q.  B.  156 ;  Mc- 
Master  v.  Morrison,  14  Grant  (Ont.) 
138,  141  ;  Crawford  v.  Lundy,  23 
Grant  (Ont.)  244,  250;  Fulton  v. 
Fulton,  24  Grant  (Ont.) 422.  See  De- 
horty  v.  Jones,  2  Hair.  (Del.)  56,  note  ; 
NYwkerk  v.  Newkerk,  2  Cai.  (N.  Y.) 
345  :  and  see  Allen  v.  Craft,  109  Ind. 
476,  483 ;  Todd  v.  Sawyer,  147  Mass. 
570;  Winsor  v.  Mills,  157  Mass.  362, 
364  ;  Jauretche  v.  Proctor,  48  Pa.  St. 
m  ;  James  v.  Card,  13  Vict.  L.  R. 
miis,    913;     Bassett   v.    Budlong,    77 

Mich.    338.      The     authorities    arc    in 

much  confusion  as  to  the  validity  of 


a  condition  against  alienation,  con- 
fined to  a  limited  period.  SeeCowell 
v.  Springs  Co.,  100  U.  S.  55,  57;  Black- 
stone  Bank  v.  Davis,  21  Pick.  (Mass.) 
42  ;  Munroe  v.  Hall,  97  N.  C.  206,  210  ; 
In  re  Northcote,  18  Ont.  107 ; 
Mandelbaum  v.  McDonell,  29  Mich.  78; 
In  re  Rosher,  26  Ch.  Div.  801 ;  Potter 
v.  Couch,  141  U.  S.  296 ;  Bennett  v. 
Chapin,  77  Mich.  526  ;  Prit<  hard  v. 
Bailey,  113  N.  C.  521.  A  gift  over  of 
a  fee  simple,  if  the  owner  does  not 
convey,  is  not  valid.  See  Van  Home 
v.  Campbell.  100  N.  Y.  287  ;  Mc- 
Kenzie's  Appeal,  41  Conn.  607  ;  Wead 
v.  Gray,  78  Mo.  59 ;  Perry  v.  Cross, 
132  Mass.  454  ;  Carr  v.  Effinger,  78 
Va.  197 ;  Wolfer  v.  Hemmer,  144 
111.  554  ;  Ball  v.  Hancock,  82  Ky.  107  ; 
Hoxsey  v.  Hoxsey,  37  N.  J.  Eq.  21  ; 
Stowelt  v.  Hastings,  59  Vt.  494.  The 
rule  applies  also  to  personalty.  Foster 
v.  Smith,  156  Mass.  379  ;  Hoxsey  v. 
Hoxsey,  37  N.  J.  Eq.  21  ;  Allen  v. 
White,  16  Ala.  181.  On  this  general 
subject  of  the  ineffectual  nature  of 
restrictions  upon  alienations  see 
Oxley  v.  Lane,  35  N.  Y.  340  ;  Wil- 
liams v.  Leech,  28  Pa.  St.  89:  Murray  v. 
Green,  64  Cal.  363 ;  Lane  v.  Lane,  8 
Allen  (Mass.)  350 ;  Turner  v.  Hallo- 
well  Sav.  Inst.  76  Me.  527  ;  Be 
Traynor  &  Keith,  15  Ont.  469  ;  Black- 
stone  Bank  v.  Davis,  21  Pick.  (Mass.) 
42  ;  Sears  v.  Putnam,  102  Mass.  5,  9  ; 
Winsor  v.  Mills,  157  Mass.  362.  So 
provisions  that  equitable  interests  in 
fee  shall  not  be  liable  for  the  debts  of 
the  cestuis  que  trust  are  inoperative. 
Taylor  v.  Harwell,  65  Ala.  1  ;  Turley 
v.  Massenftill,  7  Lea  (Tenn.)  353.  See 
Gray  v.  Obear,  54  Ga.  231,  cited  in 
Grayon  Restraints,  §  115.  Bramhallv. 
Ferris,  14  N.  Y.  41,  44.  Some 
authorities  assert  that  where  the 
beneficiary    is    also    the   trustee  his 


§  362  REPUGNANT   CONDITIONS.  ' ,  ,  | 

his  debts.1     At   least  this  is  what  has  been   taught  and 
commonly  accepted. 

§362.  Repugnant  conditions. — Restraints  upon  either  vol- 
untary or  involuntary  alienation  are  not  favored  in  the 
law,  and  are  defeated  upon  another  ground.  In  De 
Peyster  v.  Michael,2  after  a  careful  n.-vicw  of  the  authori- 
ties, the  New  York  Court  of  Appeals  observed  :  "Upon 
the  highest  legal  authority,  therefore,  it  may  beaffirmed 
that  in  a  fee-simple  grant  of  land,  a  condition  that  the 
grantee  shall  not  alien,  or  that  he  shall  pay  a  sum  of 
money  to  the  grantor  upon  alienation,  is  void,  on  the 
ground  that  it  is  repugnant  to  the  estate  granted."  In 
Potter  v.  Couch,3  the  court  says  :  "  The  right  of  aliena- 
tion is  an  inherent  and  inseparable  quality  of  an  estate  in 
fee  simple.  In  a  devise  of  land  in  fee  simple,  therefore,  a 
condition  against  all  alienation  is  void,  because  repugnant 
to  the  estate  devised."  So  in  Bradley  v.  Peixoto,4  the 
court  say  that  it  is  "  laid  down  as  a  rule  long  ago  estab- 
lished, that  where  there  is  a  gift  with  a  condition  incon- 
sistent with,  and  repugnant  to  such  gift,  the  condition  is 
wholly  void.  A  condition  that  tenant  in  fee  shall  not 
alien  is  repugnant.''5  In  Mandlebaum  v.  McDonell 6 
will  be  found  an  elaborate  review  of  the  cases  and  an 
exhaustive  consideration  of  the  question.  The  court 
conclude  that  the  only  safe  rule  of  decision  is  that  which 
prevailed  at  common  law  for  ages,  to  the  effect  that  "  a 
condition  or  restriction  which  would  suspend  all  power  of 


interest  may  be  taken  on  execution.  50  Hun   (N.  Y.)  328,  3  X.  Y.  Supp, 

Bolles   v.    State  Trust  Co.,    27  N.  J.  361. 

Eq.  308.  See  Hobbs  v.  Smith,  15  Ohio  3  141   U.  S.  296,  315,   list.    Rep. 

St.  419.  1005. 

1  4  Kent's  Com.,  p.  311.   See  Menken  *  3  Ves.  Jr.  324. 

Co.  v.  Brinkley,  94  Tenn.   730,  31  S.  5  See  Brandon  v.  Robinson,  18  Vea 

W.  Rep.  92.  Jr.  429  ;  McCullough  v.  Gilmore,    11 

3  6  N.  Y.  467,  497  ;  Oxley  v.  Lane,  Pa.  St.  370. 

35  N.  Y.   346  ;  Wieting]  v.;  Bellinger,  6  29  Mich.  78,  107. 

41 


642  REPUGNANT   CONDITIONS.  §  363 

alienation  for  a  single  day  is  inconsistent  with  the  estate 
granted,  unreasonable,  and  void.1'  In  Blackstone  Bank 
v.  Davis,1  a  leading  and  important  case,  it  appeared  that 
one  Davis  devised  to  his  son  the  use  of  a  farm  of  one 
hundred  and  twenty  acres,  with  a  provision  that  the  land 
should  not  be  subject  or  liable  to  conveyance  or  attach- 
ment. The  plaintiffs  recovered  a  judgment  against  the 
devisee  and  levied  an  execution  upon  the  premises  as 
being  land  held  by  the  defendant  in  fee.  The  court 
said  :  ''  By  the  devise  of  the  profits,  use,  or  occupation  of 
land,  the  land  itself  is  devised.  Whether  the  defendant 
took  an  estate  in  fee  or  for  life  only,  is  a  question  not 
material  in  the  present  case.  The  sole  question  is, 
whether  the  estate  in  his  hands  was  liable  to  attachment 
and  to  be  taken  in  execution  as  his  property.  The  plain- 
tiffs claim  title  under  the  levy  of  an  execution  against  the 
defendant,  and  their  title  is  valid  if  the  estate  was  liable 
to  be  so  taken.  That  it  was  so  liable,  notwithstanding 
the  proviso  or  condition  in  the  will,  the  court  cannot 
entertain  a  doubt." 

§  3&3-  — In  Walker  v.  Vincent2  the  testator  devised 
certain  real  estate  to  his  daughter  and  to  her  legal  heirs 
forever,  upon  the  express  condition  that  she  should  "not 
alien  or  dispose  of  the  same,  or  join  in  any  deed  or  con- 
veyance with  her  husband  for  the  transfer  thereof,  during 
her  natural  life."  The  court  held  the  condition  void,  and 
that  a  fee-simple  estate  was  devised,  and  said  :  "  It  makes 
no  difference  that  the  testator  has  expressly  withheld  one 
of  the  rights  essential  to  a  fee-simple,  for  the  law  does 
not  allow  an  estate  to  be  granted  to  a  man  and  his  heirs, 
with  a  restraint  on  alienation,  and  frustrates  the  most  clear 
intention  to  impose  such  a  restraint,  just  as  it  allows  alien- 
ation of  an  estate  tail,  though  a  contrary  intent  is  manifest. 


31  Pick.  (Mass.) 42.  »19  Pa.  St.  369. 


§  3°4  NICHOLS   V.    EATON. 

And  it  would  be  exceedingly  improper,  in  any  court, 
in  construing  a  devise  to  a  man  and  his  heirs,  to  endeavor 
to  give  effect  to  the  restraint  upon  alienation  by  changing 
the  character  of  the  estate  to  a  life  estate,  with  a  remainder 
annexed  to  it,  or  with  an  executory  devise  over."1  In 
Hall  v.  Tufts2  the  testator  devised  certain  real  estate  to 
his  wife  for  her  life,  and  "the  remainder  of  his  estate, 
whether  real  or  personal,  in  possession  or  reversion,  to  his 
five  children  to  be  equally  divided  to  and  among  them, 
or  their  heirs,  respectively,  always  intending  and  meaning 
that  none  of  his  children  shall  dispose  of  their  part  of  the 
real  estate  in  reversion  before  it  is  legally  assigned  them." 
The  court  held  that  the  children  took  a  vested  remainder 
in  the  real  estate  given  to  the  wife  for  her  life,  and  that 
the  clause  restraining  them  from  alienating  it  before  the 
expiration  of  the  life  estate  was  void.3  It  is  also  a  canon 
of  construction  that  an  estate  in  fee  created  by  will,  can- 
not be  cut  down  or  limited  by  a  subsequent  claim  unless 
it  is  as  clear  and  decisive  as  the  language  of  the  clause 
which  devises  the  estate.4 

§  364.  Nichols  v.  Eaton ;  the  point  actually  involved.— 
This  brings  us  to  the  question  of  the  liability  of  trust 
income  for  debts.     The  principle  embodied  in  Nichols  v. 

1  Restraints  upon  personalty.  —  A  the  estate;  they  do  not  destroy  or 
condition  against  alienation  cannot  be  limit  its  alienable  or  inheritable  char- 
imposed  upon  an  absolute  interest  in  acter."  Field,  J.,  in  Cowcll  v.  Springs 
personalty.  Lovett  v.  Kingsland,  44  Co.,  100  U.  >S.  ."iT,  citing,  Sheppard'a 
Barb.  (N.  Y.)  560,  affi'd  sub  nom.  Touchstone,  129,  131.  SeeWinsorv. 
Lovett  v.  Gillender,  35  N.  Y.  617  ;  Mills,  157  Mass.  362,  364,32  N.  E.  Rep. 
Barker  v.  Davis,  12  U.  C.  C.  P.  344.  352;  Jackson  v.  Schutz,  1*  Johns. 
4  18  Pick.  (Mass.)  455.  (N.  Y.)  174,  184.  Contra,  Anderson 
3  "  Repugnant  conditions  are  those  v.  Gary,  36  Ohio  St.  506  :  Met  lullough 

which  tend  to  the  utter  subversion  of  v.  Gil  more,  11  Pa.  St.  370.     C pan 

the  estate,  such  as  prohibit  entirely  Potter  v.  Couch.  Ml  U.  S.  315,  11  8 

the  alienation  or  useof  the  property.  Rep.  1005.     The  authorities  cannot  be 

Conditions  which  prohibit  its  aliena-  reconciled. 

tion   to  particular  persons  or    for  a         *  Byrnes  v.  Stilwell,  in:;  N    \     WO, 

limited   period,   or  its  subjection   to  9  N.  E.  Rep.  241 ;    Roseboom  v    1 

particular  uses,  are  not  subversive  of  boom,  81  N.  Y.  356. 


644 


NICHOLS    V.    EATON. 


§364 


Eaton,1  and  succeeding  cases,  and  more  especially  the 
language  employed  by  Mr.  Justice  Miller,  in  delivering 
the  opinion  of  the  Supreme  Court  in  that  case,  have  pro- 
voked extended  discussion  and  sharp  criticism,2  in  reviews, 
philosophical  productions  and  dissenting  opinions.  The 
influence  of  the  case  has  spread  like  the  murrain  among 
sheep.  The  importance  that  the  case  has  assumed  seems 
to  call  for  an  extended  statement  of  the  facts  and  features 
involved.  It  appeared  that  property  had  been  devised 
to  trustees  with  directions  to  pay  the  income  to  the 
children  of  the  testatrix  in  equal  shares,  and  on  the 
death  of  each  child,  his  or  her  share  was  to  go  over.      If 


1  91  U.  S.  716.  See  Roberts  v. 
Stevens.  84  Me.  325,  24  Atl.  Rep.  873  ; 
Maynard  v.  Cleaves,  149  Mass.  307, 
21  N.  E.  Rep.  376  ;  Smith  v.  Towers, 
69  Md.  77,  14  Atl.  Rep.  497  :  15  Id.  92; 
Garland  v.  Garland,  87  Va.  763, 13  S.  E. 
Rep.  478  ;  Jarboe  v.  Hey,  122  Mo.  349, 
26  S.  W.  Rep.  968;  Lam  pert  v.  Hay- 
del,  96  Mo.  439,  9  S.  W.  Rep.  780; 
Conger  v.  Lowe,  124  Ind.  371,  24  N. 
E.  Rep.  889. 

2  This  decision  called  forth  an  essay 
by  Professor  Gray,  already  cited,  en- 
titled Restraints  on  the  Alienation  of 
Property.  These  sentences  may  be 
found  in  the  preface  :  "  How  far  the 
law  will  allow  a  man  to  enjoy  rights 
in  property  which  he  cannot  transfer, 
and  which  his  creditors  cannot  take 
for  their  debts,  is  a  question  becoming 
more  and  more  frequent  in  this  coun- 
try. In  1876  I  shared  the  surprise, 
common  fco  man;  lawyers,  at  the  opin- 
ion of  the  Supreme  Court  of  the 
United  States,  in  the  case  of  Nichols 
v.  Eaton,  91  U.  S.  716,  containing,  as 
it  did,  much  that  was  contrary  to 
what,  both  in  teaching  and  practice, 
Iliad  hitherto  supposed  to  be  settled 
law."  The  preface  adds  that  the 
hook  was  substantially  written  before 
the  decision  of  the  Supreme  Judicial 


Court  of  Massachusetts  in  Broadway 
Nat.  Bank  v.  Adams,  133  Mass.  170, 
See  infra,  §367.  In  the  preface  to  the 
second  edition  of  his  essay  Professor 
Gray  says  :  "  If  I  had  written  with 
any  expectation  of  affecting  the  course 
of  decision,  I  should  have  been  griev- 
ously disappointed.  State  after  State 
has  given  in  its  adhesion  to  the  new 
doctrine  ;  the  courts  of  Maine,  Mary- 
land, Illinois,  and  Vermont  have 
adopted  it  ;  those  of  Delaware,  In- 
diana, and  Virginia  have  used  lan- 
guage which  leaves  little  doubt  that 
they  will  adopt  it  at  the  first  oppor- 
tunity ;  and  in  Missouri  and  Ten- 
nessee, where  the  old  doctrine  has 
been  expressly  declared,  it  has  now 
been  thrown  aside,  and  the  new  views 
embraced.  Were  it  not  for  an  occa- 
sional dissenting  opinion,  especially 
an  extremely  able  one  of  Chief  Jus- 
tice Alvey,  late  of  the  Court  of 
Appeals  of  Maryland,  T  should  be  vox 
clamantis  in  dcserto."  The  authori- 
ties pertaining  to  trust  incomes  and 
spendthrift  trusts  down  to  1895  may 
be  found  stated  and  classified  in  tins 
essay  to  which  the  student  desiring 
to  study  all  the  cases  in  detail  is 
referred . 


364  NICHOLS   V.    EATON. 


the  sons  respectively  should  alienate,  or  by  reason  of  bank- 
ruptcy or  insolvency,  or  any  other  cause,  the  income  could 
no  longer  be  personally  enjoyed  by  them  respectively,  but 
would  become  vested  in  and  payable  to  some  other  per- 
son, then  the  trust  as  to  such  portion  so  divested  should 
immediately  cease  and  determine.  In  that  event,  during 
the  residue  of  the  life  of  such  son,  the  income  was  to  be 
paid  to  his  wife  or  child,  and  in  default  of  such  person,  to 
be  added  to  the  principal,  and  further,  "in  case,  after  the 
cessation  of  said  income  as  to  my  said  sons  respectively, 
otherwise  than  by  death,  as  hereinbefore  provided  for,  it 
shall  be  lawful  for  my  said  trustees,  in  their  discretion, 
but  without  its  being  obligatory  upon  them,  to  pay  to  or 
apply  for  the  use  of  my  said  sons  respectively,  or  for  tin- 
use  of  such  of  my  said  sons  and  his  wife  and  family,  so 
much  and  such  part  of  the  income  to  which  my  said  sons 
respectively  would  have  been  entitled  under  the  pre- 
ceding trusts,  in  case  the  forfeiture  hereinbefore  provided 
for  had  not  happened."  One  of  the  sons  became  a  bank- 
rupt, and  his  assignee  in  bankruptcy  brought  a  bill  against 
the  trustees  to  have  the  income  of  the  son's  share  applied 
for  the  benefit  of  creditors.1 

Mr.  Justice  Miller,  in  the  opening  sentences  of  his  opin- 
ion, observes  that  the  claim  of  the  assignee  is  founded  on  the 


1  Nichols  v.  Eaton,  re-stated.  —  In  subject  to  other  dispositions.  The  as- 
Hyde  v.  Woods,  94  U.  S.  526,  Mr.  signee  of  the  bankrupt  sued  to  recover 
Justice  Miller  observes  that  his  own  the  interest  bequeathed  to  the  bank- 
opinion  ha  Nichols  v.  Eaton,  91  U.  S.  rupt,  on  the  ground  thai  this  con- 
716,  "  was  well  considered,"  and  says:  dition  was  void  as  against  public 
"In  that  case,  the  mother  of  the  policy.  But  this  court,  on  a  full 
bankrupt  Eaton,  had  bequeathed  to  examination  of  the  authorities,  both 
him  by  will  the  income  of  a  in  England  and  this  country,  held 
fund,  with  a  condition  in  the  trust  that  the  objection  was  not  well  taken  ; 
that  on  his  bankruptcy  or  insolvency  that  the  owner  of  property  mighl 
the  legacy  should  cease  and  go  to  his  make  such  a  condition  in  tin-  trai 
wife  or  children,  if  he  had  any,  and  if  of  that  winch  was  his  own,  and  in 
not,  it  should  lapse  into  the  general  doing  so  violated  do  creditor's  rights 
fund   of  the  testator's   estate,  and  be  and  no  principle  of  public  policy." 


646  NICHOLS   V.    EATON.  §3^4 

proposition  "  that  a  will  which  expresses  a  purpose  to  vest 
in  a  devisee  either  personal  property,  or  the  income  of 
personal  or  real  property,  and  secure  to  him  its  enjoy- 
ment free  from  liability  for  his  debts,  is  void  on 
grounds  of  public  policy,  as  being  in  fraud  of  the  rights  of 
creditors  ;  or  as  expressed  by  Lord  Eldon  in  Brandon  v. 
Robinson:1  'If  property  is  given  to  a  man  for  his  life, 
the  donor  cannot  take  away  the  incidents  to  a  life  estate.' ' 
"  There  are  two  propositions,"  continues  the  learned 
judge,  "  to  be  considered  as  arising  on  the  face  of  this 
will  as  applicable  to  the  facts  stated:  (i)  Does  the  true 
construction  of  the  will  bring  it  within  that  class  of  cases, 
the  provisions  of  which  on  this  point  are  void  under  the 
principle  above  stated?  and  (2),  If  so,  is  that  principle  to 
be  the  guide  of  a  court  of  the  United  States  sitting  in 
chancery?"  After  reviewing  the  English  authorities,  the 
opinion  continues  :  "  Conceding  to  its  fullest  extent  the 
doctrine  of  the  English  courts,  their  decisions  are  all 
founded  on  the  proposition  that  there  is  somewhere  in  the 
instrument  which  creates  the  trust  a  substantial  right,  a 
right  which  the  appropriate  court  would  enforce,  left  in 
the  bankrupt  after  his  insolvency,  and  after  the  cesser  of 
the  original  and  more  absolute  interest  conferred  by  the 
earlier  clauses  of  the  will.  This  constitutes  the  dividing 
line  in  the  cases  which  are  apparently  in  conflict.  Apply- 
ing this  test  to  the  will  before  us,  it  falls  short,  in  our 
opinion,  of  conferring  any  such  right  on  the  bankrupt. 
Neither  of  the  clauses  of  the  provisos  contain  anything 
more  than  a  grant  to  the  trustees  of  the  purest  discretion 
to  exercise  their  power  in  favor  of  testatrix's  sons.  It 
would  be  a  sufficient  answer  to  any  attempt  on  the  part  of 
the  son   in  any  court  to  enforce  the  exercise  of  that  dis- 

!  18    Vea.  -i-U.     For  variations  of  the  &  M.  197;  Graves  v.  Dolphin,  1  Sim. 

English   rule  see  Be  Coleman,  39  Ch.  66  ;  Green  v.  Spicer,  Taml.   396  ;  Jos- 

Div.  448,  452  ;  Barton  v.  Briscoe,  Jac.  selyn   v.  Josselyn,  9  Sim.  63;  Lord  v. 

603  ;   Woodmeeton  v.  Walker,  2  Russ.  Bunn,  2  Y.  &C.  C.  C.  98. 


§364 


NICHOLS    V.    EATON. 


cretion  in  his  favor,  that  the  testatrix  has  in  express  term  1 
said  that  such  exercise  of  this  discretion  is  not  'in  an\ 
manner  obligatory  upon  them,' -- words  repeated  in  both 
these  clauses.  To  compel  them  to  pay  any  of  this  in<  ome 
to  a  son  after  bankruptcy,  or  to  his  assignee,  is  to  mak 
will  for  the  testatrix  which  she  never  made  ;  and  to  do  it 
by  a  decree  of  a  court  is  to  substitute  the  discretion  oi 
the  chancellor  for  the  discretion  of  the  trustees,  in  whom 
alone  she  reposed  it."  Thus  far  we  cannot  but  consider 
the  case  as  correctly  reasoned  and  decided,  since  a  gift  <>| 
a  life  estate  or  interest,  with  a  proviso  that  it  shall  go 
over  to  a  third  person  upon  alienation,  voluntary  or 
involuntary,  by  the  life  tenant,  is  considered  valid.  We 
can  formulate  no  well-founded  objection  to  such  a  trans- 
action. Probably  the  earliest  case  in  which  the  point  is 
so  held  is  Lockyer  v.  Savage,1  decided  in  1773,  but  the 
question  seems  now  to  be  no  longer  a  matter  of  disput 


1 2  Stra.  947. 

•Shee  v.  Hale,  13  Ves.  Jr.  404; 
Cooper  v.  Wyatt,  5  Madd.  482  ;  Mar- 
tin v.  Margham,  14  Sim.  230  ;  Roch- 
ford  v.  Hackman,  9  Hare  475  ;  Bran- 
don v.  Aston,  2  Y.  &  C.  N.  R.  24  :  Re 
Edgington's  Trusts,  3  Drew  202  ; 
Manning  v.  Chambers,  1  DeG.  &  Sin. 
282  ;  Carter  v  Carter,  3  Kay  &  J. 
617  ;  Barnett  v.  Blake,  2  Dr.  &  Sm. 
117  ;  Re  Muggeridge's  Trusts,  John- 
son 625  ;  Sharp  v.  Cosserat,  20  Beav. 
470;  Haswell  v.  Haswell,  28  Beav. 
26  ;  Dorsett  v.  Dorsett,  30  Beav.  256  ; 
Townsend  v.  Early,  34  Beav.  23  ; 
Freeman  v.  Bowen,  35  Beav.  17  ; 
Montefiore  v.  Behrens,  35  Beav. 
95  ;  Oldham  v.  Oldham,  L.  R.  3  Eq. 
404 ;  Roffey  v.  Bent,  L.  R.  3  Eq.  759  : 
Craven  v.  Brady,  L.  R.  4  Eq.  209, 
L.  R.  4  Ch.  App.  296;  In  re  Am- 
herst's Trusts,  L.  R.  13  Eq.  464;  Bill- 
son  v.  Crofts,  L.  R.  15  Eq.  314 ;  Ex 
parte  Eyston,   7    Ch.    D.    145 ;  Caul- 


field  v.  Maguire,  5  Ir.  Ch.  78  ;  Nichols 
v.  Eaton,  91  U.  S.  716;  BramhaJJ  v. 
Ferris,  14  N.  Y.  41;  Emery  \.  Van 
Syckel,  17  N.  J.  Eq.  564,  cited  in 
Gray's  Restraints  on  Alienation 
Where  a  man  settled  Ids  property 
upon  himself  for  life,  or  until  be 
should  become  a  bankrupt  or  insolv- 
ent, and  after  Ins  death,  bankruptcy 
or  insolvency,  in  trust  for  lii->  wife 
and  children,  and  the  settlor  being  in 
solvent  assigned  his  property  to  trus 
tees  for  the  benefit  of  creditors,  it 
was  held  that  the  trust  was  void  as 
against  the  assignee.  In  re  Casey's 
Trusts,  4  Irish  Ch.  347.  A  bond  pay- 
able to  trustees  for  the  benefit  "i  a 
wife  on  bankruptcy  of  the  obligor  is 
not  good.  Ex  paid  Hill,  l  Cooke'e 
Bkr.  Law  228;  Ex  parte  Bennet,  l 
Cooke's  Bkr.  Law  228  ;  In  re  Murphy. 
1  Sch.  &  Lef.  44  ;  Ex  parte  Taaffe,  I 
Glyn&  J.  110. 


648  NICHOLS   V.    EATON.  §  365 

§  365-  The  dictum  in  Nichols  v.  Eaton. — -The  court,  how- 
ever, seemed  disinclined  to  limit  the  discussion  to  the  ques- 
tions before  it.  The  controverted  doctrine  against  which 
we  complain  is  declared  to  be  a  dictum,  for  the  court  says:1 
"  We  have  indicated  our  views  in  this  matter  rather  to 
forestall  the  inference,  that  we  recognize  the  doctrine 
relied  on  by  appellants,  and  not  much  controverted  by 
opposing  counsel,  than  because  we  have  felt  it  necessary 
to  decide  it."  The  opinion  adds  that  the  lack  of  time  has 
not  "permitted  any  further  examination  into  the  decisions 
of  the  State  courts."  Even  the  successful  counsel  did 
not  argue  in  favor  of,  and  manifestly  did  not  believe  in 
the  advanced  positions  taken  by  the  court.  These  posi- 
tions were  not  necessary  to  gain  his  case.  Referring  to 
the  implication  in  the  remark  of  Lord  Eldon,  already 
quoted,  the  court  were  unable  to  see  that  the  power  of 
alienation  was  a  necessary  incident  to  a  life  estate  in  real 
property,  or  that  the  rents  and  profits  of  real  property, 
and  the  interest  and  dividends  of  personal  property,  might 
not  be  enjoyed  by  an  individual  without  liability  for  his 
debts  attaching  as  a  necessary  incident  to  such  enjoyment. 
The  statement  is  made  that  the  English  Chancery 
doctrine  hostile  to  spendthrift  trusts  "  is  comparatively 
of  modern  origin."  These  obnoxious  trusts  certainly  are 
modern  creations,  and  Chancery  was  loyally  following 
the  common  law  in  promptly  declaring  the  estate  of 
the  beneficiary  therein  alienable  and  liable  for  debts. 
The  ruling  of  Chancery  was  not  "ingrafted"  upon  the 
common  law  as  stated  in  Nichols  v.  Eaton  ;  it  followed 
it.2  The  opinion  continues  :  "  Nor  do  we  see  any  reason, 
in  the  recognized  nature  and  tenure  of  property  and  its 
transfer  by  will,  why  a  testator  who  gives,  who  gives 
without  any  pecuniary  return,  who  gets  nothing  of  prop- 
erty   value   from    the  donee,  may   not  attach  to  that  gift 

•  91  U.  S.  729.  8  See  Gray  on  Restraints,  §  256. 


§  365  NICHOLS   V.    EATON. 

the  incident  of  continued  use,  of  uninterrupted  benefil  of 
the  gift,  during  the  life  of  the  donee.  Why  a  parent,  or 
one  who  loves  another,  and  wishes  to  use  his  own  prop- 
erty in  securing  the  object  of  his  affection  as  far  as 
property  can  do  it,  from  the  ills  of  life,  the  vicissitudes  ol 
fortune,  and  even  his  own  improvidence,  or  incapacity  for 
self-protection,  should  not  be  permitted  to  do  so,  is  not 
readily  perceived."  In  other  words  vagabond  spend 
thrifts  are,  with  infants  and  lunatics,  to  be  favored  with 
special  protection.  But  the  infant  cannot  use  his  pro- 
tection as  a  sword;  if  he  does  the  protection  is  forfeited  ; 
while  the  beneficial  contracts  of  a  lunatic  are  binding 
upon  his  estate.  The  spendthrift,  on  the  other  hand, 
may  with  impunity  use  the  exemption  of  his  trust  income 
as  a  rapier.  We  lodge  our  protest  not  against  provision 
being  made  for  "  the  ills  of  life,"  or  "  improvidence,"  or  "  in- 
capacity "  of  the  object  of  the  donor's  affection,  but  against 
raising  barrieis  for  the  protection  of  the  donee  from  the 
righteous  wrath  of  the  creditor  whom  he  has  wronged. 
If  the  spendthrift  enjoys  the  comforts  of  income,  so  does 
the  creditor  whose  property  he  has  taken.  If  the  spend- 
thrift has  children  dependent  upon  him,  so  has  the 
creditor.  Is  it  a  wise  public  policy  to  allow  individuals 
to  practically  create  disabilities  in  cases  where  the  general 
policy  of  the  law  has  raised  none,  and  to  devise  trust 
schemes  to  enable  worthless  insolvents  to  elude  the  pay- 
ment of  righteous  claims  ?  Should  we  allow  a  donor  to 
cover  the  worthless  object  of  his  regard  with  an  asbestos 
blanket  which  judicial  writs  cannot  penetrate.  The  opinion 
argues  that  the  only  ground  on  which  a  spendthrift  trust 
is  against  public  policy  "is  that  it  defrauds  the  creditors 
of  the  beneficiary."  This  is  scarcely  correct.  Public 
policy  is,  or  should  be,  hostile  to  inalienable  estates, 
whether  legal  or  equitable,  and  opposed  to  repugnant 
conditions   that    hamper    property;    hostile    to   properu 


650  NICHOLS    V.    EATON.  §  365 

rights  divested  of  property  responsibilities  ;  hostile  to  the 
creation  of  unnecessary  disabilities  to  protect  people  sui 
juris  ;  hostile  to  exemptions  which  protect  more  than  the 
simple  necessaries  of  life  ;  hostile  to  combinations  that 
divest  insolvency  of  its  sting.  The  cases  cited  in  support 
of  the  views  of  the  court l  were  chiefly  from  Pennsylvania,8 
and  closed  with  the  well-known  and  unfortunate  New 
York  case  of  Campbell  v.  Foster.3  This  authority,  as  we 
have  already  seen,4  contains  a  dictum  to  the  effect  that 
the  interest  of  a  beneficiary  in  a  trust  fund  created  by  a 
person  other  than  the  debtor,  is  not  available  to  creditors, 
but,  as  heretofore  shown,5  this  dictum  is  expressly 
repudiated  and  exploded  by  Rapallo,  J.,  in  delivering  the 
opinion  of  the  New  York  Court  of  Appeals  in  Williams 
v.  Thorn,6  and  the  principle  in  support  of  which  the  case 
is  cited  in  Nichols  v.  Eaton  has  been  proved  over  and 
over  aeain  never  to  have  been  the  law  of  that  State. 

Nichols  v.  Eaton  embodied  a  dangerous  and  startling 
dictum,  the  influence  of  which  is  spreading  like  the  black 
plague.  It  refused  to  recognize  or  follow  the  law  of  the 
State7    where    the    appeal    originated,8    and    repudiated 


1  Leavitt  v.    Beirne,    21  Conn.    1;  Wood,  42  Hun  (N.  Y.) 636  ;  Spindle  v. 

Nickell   v.    Handly,    10   Gratt.   (Va.)  Shreve  111  U.  S.  546,  4  S.  C.  Rep.  522  ; 

336;    Pope's   Ex'rs   v.    Elliott,   8    B.  Andrews  v.  Whitney,  82  Hun  (N.  Y.) 

Mon.  (Ky.)  56.  123,  31  N.  Y.  Supp.  164  ;   Bunnell  v. 

■'  Fisher  v.    Taylor,    2   Rawle  (Pa.)  Gardner,  4  App.  Div.  (N.  Y.)322,  88 

33;  Holdship  v.    Patterson,  7  Watts  N.  Y.  Supp.  569  ;  McEvoy  v.  Applehy, 

(Pa.)  547;  Shankland's  Appeal,  47 Pa.  27  Hun  (N.   Y.)  44.      See  Tolles   v. 

St.  113;  Ashhurst  v.  Given,  5  W.  &  Wood,  99  N.  Y.  616,  1  N.  E.  Rep.  251, 

S.  (Pa.)  323  ;  Brown   v.  Williamson,  16  Ahb.  N.  C.  (N.  Y.)  1,  and  the  col- 

36  Pa.  St.  338;  Still  v.  Spear,  45  Pa.  lection  of  eases  in  the  notes . 

St.  168.     See  §  368.  '  Local  decisions  on  legal  or  equit- 

3  35  N.  Y.  361.     See  Cutting  v.  Cut-  able     property     rights    will    be   fol- 
ting,  86  N.  Y.  546.  lowed    in    Federal    tribunals.     Orvis 

4  See  §§  45,  360.  v.  Powell,  98  U.  S.  176;  Lloyd  v. 
6  See  §§45,  360.  Fulton,  91  U.  S.  479;  Brine  v.  Ins. 
6  70  N.  Y.  270  ;   2d  Appeal,  81  N.  Y.  Co.,  96  U.  S.  627. 

381,44  N.  E.  Rep.  169;  Wetmore    v.  8  Tillinghast   v.   Bradford,  5  R.   1. 

Wetmore,    149  N.  Y.    520  ;   Kilroy  v.  205. 


§  3^5  NICHOLS   V.    EA'loN. 

the  settled  English  rule.1  It  revives  in  a  measure 
the  principle  of  the  objectionable  statute  1  )<•  Donis 
which  was  practically  superseded  by  Taltarum  in 

1472.  Are  we  to  be  turned  back  to  the  thirteenth  century 
rule  in  which  family  pride  and  military  oppression  v. 
rampant  ?  If  the  question  whether  or  not  it  was  permissible 
aside  from  the  rules  of  law  establishing  the  tenure  by 
which  property  is  held  and  transferred,  to  allow  a  debtor 
to  enjoy  a  right  or  interest  in  property  free  from  the  claims 
of  creditors,  were  an  open  one,  we  should  certainly  answer 
that  popularly  speaking  such  a  policy  was  neither  judi- 
cious, safe  nor  wise.3  This  conclusion  is  not  necessarily 
rested  wholly  upon  the  theory  that  such  a  form  of  \> 
ing  property  in  a  debtor  is  a  fraud  upon  creditors,  but 
rather  upon  the  idea  that  property,  by  the  rules  of  law. 
should  include  not  only  the  right  of  enjoyment,  but  also 
the  right  of  alienation  and  the  incident  of  liability  for 
debts.  While  it  is  true  that  the  owner  of  property  may, 
while  he  owns  it,  use  it  as  he  likes,  yet  he  should  not  be 
permitted  to  limit  or  control  its  use  after  he  parts  with 
it 4  by  creating  an  income  for  a  spendthrift  which  in  its 
power  to  confer  enjoyment  upon  the  beneficiary  is,  in  gen- 
eral essentials,  much  the  same  as  a  property  right,  but 
which  the  beneficiary  need  not  guard  or  protect  by  keep- 
ing his  obligations  or  respecting  the  rights  of  his  fellow 
men,  since  the  income  cannot  be  touched  or  taken  from 
him.  These  trust  estates  and  incomes  are,  in  the  opinion, 
likened  to  statutory  exemptions;  the  analogy  is  mis- 
takenly considered  perfect  ;  the  creditor,  it  is  said,  has  no 
right  to  look  to  either  of  these  sources  for  satisfaction  of 
his  claim.  We  challenge  the  justness  of  the  analogy  and 
question  the  correctness  of  the  rule  sought  to  be  formu- 
lated from  it.    It  must  have  been  thoughtlessly  employed. 


1  Brandon  v.  Robinson,  18  Ves.  433.  3See  §  360. 

3  12  Ed.  4,  19  PI.  25.  4See  10  Am.  Law  Rev.  595. 


652  NICHOLS   V.    EATON.  §  365 

Statutory  exemptions  are  trivial  in  value  ;  they  do  not 
clothe  the  debtor  with  indicia  of  wealth,  or  furnish  him 
with  comforts  or  luxuries  while  his  creditors  remain 
unpaid  It  would  be  inhumane  to  permit  the  creditor  to 
take  the  insolvent's  clothing  from  his  back,  the  food  from 
his  table  or  the  bed  from  his  house.  It  is  equally  against 
a  wise  public  policy  to  deprive  the  professional  man  of  his 
library,  the  mechanic  of  his  tools,  or  the  teamster  of  his 
horses,  for  by  so  doing  the  insolvent  would  be  pauper- 
ized and  perhaps  rendered  a  public  charge,  and  the  possi- 
bility of  repairing  his  ill-fortune  by  future  industry  irre- 
trievably lost.  These  guarded  exemption  statutes,  so  uni- 
versal in  their  operation,  reflect  the  charitable  sentiments 
of  a  noble  and  generous  people,  and  exhibit  a  willingness 
on  the  part  of  the  law-makers  to  extend  a  protecting  hand, 
in  a  limited  way,  to  unfortunate  struggling  insolvents  by 
enabling  them  to  work  and  to  restore  their  fallen  fortunes 
unmolested  ;  not  by  protecting  them  in  a  life  of  opulent 
idleness.  We  deny  that  the  kindly  spirit  which  inspired 
this  humane  and  necessary  legislation  can  be  tortured  or 
perverted  so  as  to  subserve  the  purpose  of  shielding  vaga- 
bond spendthrifts  from  the  remedies  of  their  creditors1 


1  In  Spindle  v.  Shreve,  9  Biss.  199,  could  be  held  for  the  benefit  of  the 
200,  4  Fed.  Rep.  136,  the  will  con-  creditors;  or  whether  it  was  an  estate 
tained  this  provision:  "One-half  of  which  was  to  be  held  for  his  personal 
each  share  (which  half  I  wish  to  be  benefit  for  life,  and  over  which  he  had 
income-paying  real  estate)  I  desire  to  no  power  or  control,  and  which  could 
be  set  apart  and  conveyed  to  a  trustee,  not  go  for  the  benefit  of  creditors.  I 
to  be  held  for  the  use  and  benefit  of  have  come  to  the  conclusion,"  con- 
each  child  during  his  or  her  life,  and  tinues  Drummond,  J.,  "that  under 
then  descend  to  his  or  her  heirs,  with-  the  provisions  of  this  will  there  was  no 
out  any  power  or  right  on  the  part  of  estate  which  passed  to  the  assignee, 
said  ctyld  to  encumber  said  estate,  or  but  that  the  property  in  Chicago  is  to 
anticipate  the  rents  thereof."  One  of  be  held  by  the  trustee  to  whom  it  was 
the  children  became  a  bankrupt,  and  conveyed  by  the  executor,  for  the  Den- 
tin- question  presented  upon  a  bill  filed  efit  of  the  son  during  his  life,  and  that 
by  his  assignee  was  whether  this  child  the  rents  and  profits  of  the  estate  are 
' '  had  such  an  interest  in  this  property  to  be  paid  over  to  him  personally,  and 
that  it  passed  to  the  assignee,  and  so  that  he  has  no  power  to  transfer  any 


§  365  NICHOLS    V.    EATON. 

In  Mississippi  the  court  says  :  "  Our  statutes  upon  the  sub- 
ject of  exemptions  indicate  a  clear  public  policy  that 
exemption  from  personal  pauperism  is  of  greater  concern 
than  the  rights  of  creditors."  '  This  is  true  as  regards 
mechanics'  tools,  simple  household  essentials  and  similar 
exemptions,  but  trust  incomes  are  not  within  the  spirit. 
letter  or  equity  of  these  statutes.  The  analogy  is  being 
abandoned  and  the  exemption  of  trust  incomes  justified 
upon  the  ground  that  the  donor  of  the  trust  may  do  as  he 
pleases  with  his  money.  But  is  it  wise  to  permit  him  in 
so  doing  to  violate  public  policy;  to  attach  repugnant 
conditions  to  equitable  estates,  to  create  funds  which  con- 
fer the  comforts  of  wealth  divested  of  its  responsibilities  ; 
to  put  creditors  out  of  the  category  of  the  favored  class  ; 
to  create  estates  that  are  exempt  from  judicial  writs ;  and  to 
control  the  execution  of  these  extraordinary  trusts  from 
the  tomb  ?  Is  it  not  wiser  that  the  donor's  power  to  dis- 
pose of  his  wealth  should  be  regulated  by  reason  and 
made  to  conform  to  a  wise  public  policy  ? 


interest  which  he  has  in  the  estate  so  by  creditors."    See  Spindle  v.  Shreve, 

as  to  defeat  the  provisions  made  in  111  U.S.  547.     It  is  said  in  New  Jei 

the  will.     This  will  is  attacked  on  the  sey  that  the  jurisdiction  of  the  Court 

ground  that  the  provision  made  for  the  of  Chancery  in  reaching  property  1  >f  .1 

son  is  contrary  to  public  policy,  and  judgment-debtor  does  not  extend  to 

is,  therefore,  inoperative  and  void.    I  trust    properly    where    the  trusl  has 

hardly  think  the  authorities  warrant  been    created   by  some   person  other 

that  conclusion,   and,  if  they  do  not,  than  the  debtor.     Hence  where  a  mum 

then  the  only  question  is,  What  is  the  was  left    to    executors    in    trusl    to 

legal  effect  of  this  provision  in  the  will,  pay  the  income  and   such  part  of  the 

and  what  was  the  testator's  intention  principal  as  the  cestui  que  trust  Bh< Mild 

in  relation  to  the  estate  which  was  to  wish,    to   her,  and  she  requested   the 

be  held  by  the  trustee?    The  author-  trustees  to  invest  the  fund  in  a  farm, 

ities  collected  in  the  case  of  Nichols  v.  it  was  held  that  such  farm  could  not 

Eaton,  91  U.  S.  716,   show  that  it  was  be  reached  by  a  creditor  of  the  ,•,  stui 

competent  for  the  testator  to  make  que  trust.     Lippincott  v.  Evens. 

such  a  provision  as  this,  namely:  to  J.  Eq.   553.     See  Easterly  v.   Keney, 

declare  by    his  will  that  his  estate,  or  36  Conn.  18. 

any  portion  of  it,  might  be  held  for  a         'Leigh  v.    Earrison,  69   Miss    928, 

child's  sole  benefit  during  life,  and  in  934,  11  So.  Hep.  604 
such  a  wav  that  it  could  not  be  readied 


654  THE    CORRECT   RULE.  §  366 

§366.  The  correct  rule.  —  The  true  rule  should  be  that 
'*  whatever  a  man  can  demand  from  his  trustees,  that  his 
creditors  can  demand  from  him."  1  In  Tillinghast  v. 
Bradford,2  it  appeared  that  the  devise  was  to  T.  in  trust 
to  pay  the  income  to  H.  for  life  ;  anticipation  or 
payment  to  assigns  was  prohibited,  the  income  being 
intended  for  the  sole  and  separate  use  of  H.  An  assignee 
of  H.  for  the  benefit  of  creditors  was  awarded  the  income 
for  the  life  of  H.  The  court  said:  "This  has  been  the 
settled  doctrine  of  a  court  of  chancery,  at  least  since 
Brandon  v.  Robinson,3  and,  in  application  to  such  a 
case  as  this,  is  so  honest  and  just  that  we  would  not 
change  it  if  we  could.  Certainly  no  man  should  have  an 
estate  to  live  on,  but  not  an  estate  to  pay  his  debts  with. 
Certainly  property  available  for  the  purposes  of  pleasure 
or  profit  should  be  also  amenable  to  the  demands 
of  justice."4  In  Bramhall  v.  Ferris,6  Comstock,  J.' 
observed  that  if  a  bequest  is  given  "absolutely  for  life, 
with  no  provision  for  its  earlier  termination,  and  no 
limitation  over  in  the  event  specified,  any  attempt  of 
the  testator  to  make  the  interest  of  the  beneficiary 
inalienable,  or  to  withdraw  it  from  the  claims  of  creditors, 
would  have  been  nugatory.  Such  an  attempt  would  be 
clearly  repugnant  to  the  estate  in  fact  devised  or 
bequeathed,  and  would  be  ineffectual  for  that  reason  as 
well  as  upon  the  policy  of  the  law."  6  And  where  trustees 
held  property  with   power  to  apply  such  portion  of  it  as 


1  Gray  on  Restraints,  §  166.     Com-  Eaton,  91  U.   S.  716,  came  up  on  ap- 

pare  Parsons  v.  Spencer,  83  Ky.  305  ;  peal  from  the  State  in  which  Tilling- 

Smith  v.   Towers,  69  Md.  103,  14  Atl.  hast  v.   Bradford,   5   R.   I.    205,    was 

Rep.  497;  15  Id.  92.  decided. 

!5R.  I  .  205.  s  14  N.  Y.  41. 

lv  Ves.  429.  «  Citing  Blackstone  Bank  v.  Davis, 

4  Sec   Pace  v.   Pace,    73  N.  C.  119;  21  Pick.  (Mass.)  42  :  Hallett  v.  Thonip- 

Bailie   v.    McWhorter,   56    Ga.    183;  eon,  5  Paige  (N.   Y.)  583;  Graves  v. 

Easterly  v.  Keney,  36  Conn.   18.     It  Dolphin,  1  Sim.  66;  Brandon  v.  Rob- 

Bhould     be     noted     that    Nichols    v.  Lnson,  18  Ves.  429. 


§  367  BROADWAY  BANK  V.  ADAMS. 


they  saw  fit  to  the  education  and  maintenance  ol   a  bene 
ficiary  until  he  should  reach  twenty-five  years,  and   then 
to   convey  the   principal   with   all   accretions  to  him,  the 
power  being  given  to  the  trustees  in  their  discretion   to 
convey  the  estate  to  the  beneficiary  before  he  was  tw< 
five  years  of  age,  it  was  held  that  the  beneficiary's  inl 
est  was  liable  for  his  debts.1 

But  what  are  we  to  expect  next  when  the  courts  declare 
that  "large  masses  of  property  are,  in  pursuance  of  a 
public  policy,  finding  expression  in  legislation,  exempt 
from  liability  for  debts?"2  And  what  are  we  to  expect 
when  the  courts  of  a  State  like  Massachusetts  incline  to 
hold  that  equitable  rights  can  be  exempted  from  tin- 
process  of  creditors  by  a  declaration  to  that  effect  con- 
tained  in   the  deed  or  will  ? 

§367.  Broadway  National  Bank  v.  Adams. —  We  will 
next  notice  an  important  case  in  Massachusetts  —  Broad- 
way National  Bank  v.  Adams,3  another  pillar  in  the  tem- 
ple of  spendthrift  trusts.  The  object  of  the  bill  was  to 
reach  and  apply  to  the  payment  of  the  plaintiff's  claim 
the  income  of  a  trust  fund  created  for  the  debtor's 
benefit  by  the  will  of  his  brother.  Briefly  the  will  gave 
$75,000  to  executors,  in  trust,  to  pay  the  net  income  to 
the  debtor  semi-annually  during  his  natural  life,  the  pay- 
ments to  be  made  personally  or  upon  his  order  or 
receipt  in  writing,  "  in  either  case  free  from  the  inter- 
ference or  control   of   his  creditors,  my  intention  being 


'Daniels    v.    Eldredge,    125    Mass.  Massengill,  86  Tenn.  81,  5  S.  W.  Rep. 

356.     See  Havens  v.  Heal}%  15  Barb.  719;  Roberts  v.  Stevens,  si    M 

(N.  Y.)  296.  24  Atl.   Rep.   873,   and    cases   cited; 

3  Jourolmon  v.  Massengill,  86  Term.  Smith  v.  Towers,  69  M.I.   84,14   Ail. 

81,  104,  5S.  W.  Rep.  719.  Rep.  497,  15   [d.  92;  Garland  v.  Oar- 

3 133   Mass.    170.      See    Billings    v.  land,  87  Va.    703,    13   S.    E.  Rep  478; 

Marsh,  153  Mass.   311,  26  N.  E.  Rep.  Leigh  v.   Harrison,   69   Miss. 

1000;   Wemyss  v.    White,    159   Mass.  So.  Rep.  604. 
484,  34  N.  E.  Rep.  718;  Jourolmon  v. 


656  BROADWAY    BANK   V.    ADAMS.  §  367 

that  the  use  of  said  income  shall  not  be  anticipated  by 
assignment."  The  income  after  the  debtor's  death  was 
to  go  to  his  wife  and  children,  and  upon  the  death  or 
remarriage  of  the  wife,  the  principal  and  accumulations 
were  to  be  divided  among  the  children.  Manifestly  the 
intention  of  the  testator  was  that  the  income  should  be 
free  from  the  claims  of  creditors,  and  that  the  courts 
should  be  unable  to  compel  the  trustee  to  divert  the  income 
unless  the  provisions  and  intention  were  unlawful.  The 
court  observe  at  the  outset  that  "  the  question  whether 
the  founder  of  a  trust  can  secure  the  income  of  it  to  the 
object  of  his  bounty,  by  providing  that  it  shall  not  be 
alienable  by  him  or  be  subject  to  be  taken  by  his  cred- 
itors, has  not  been  directly  adjudicated "  in  Massachu- 
setts, but  say  that  the  tendency  of  the  decisions  has  been 
in  favor  of  such  a  power  in  the  founder.1  The  reason 
of  the  rule  that  a  restriction  upon  the  power  of  aliena- 
tion is  void  because  it  is  repugnant  to  the  grant,  is  said 
not  to  apply  to  the  case  of  a  transfer  of  the  property  in 
trust,  as  by  the  creation  of  the  trust  the  property  passes 
to  the  trustee  with  all  its  incidents  and  attributes  unim- 
paired. The  trustee  ''takes  the  whole  legal  title  to 
the  property,  with  the  power  of  alienation  ;  the  cestui 
que  trust  takes  the  whole  legal  title  to  the  accrued 
income  at  the  moment  it  is  paid  over  to  him.  Neither  the 
principal  nor  the  income  is  at  any  time  inalienable."  It 
is  conceded  by  the  court  that,  from  the  time  of  Lord 
Eldon,  the  rule  has  prevailed  in  the  English  Court  of 
Chancery,  to  the  effect  that  when  the  income  of  a  trust 
estate  is  given  to  any  person  (other  than  a  married 
woman)  for  life,  the  equitable  estate  for  life  is  alienable 
by,  and   liable   in   equity  to  the  debts  of,   the  cestui   que 


Citing   Braman  v.  Stiles,  2  Pick.      Mass.    425;    Ball    v.    Williams,    120 
160;  Perkins  v.  Bays,  3  Gray      Mass.  344;   Sparhawk    v.  ("loon,   T2."> 
Mass.i  406;  RuBseU  v.  Grinnell,   lOo      Mass.  263. 


§  367  BROADWAY   BANK    V.    ADAMS.  657 

trust,  and  that  this  quality  is  so  inseparable  from  the 
estate  that  no  provision,  however  express,  which  does 
not  operate  as  a  cesser  or  limitation  of  the  estate  itself, 
can  protect  it  from  his  debts.1  The  English  rule,  the 
court  observes,  has  been  followed  in  some  of  the  American 
cases,2  while  other  courts  "  have  rejected  it,  and  have 
held  that  the  founder  of  a  trust  may  secure  the  benefit  of 
it  to  the  object  of  his  bounty,  by  providing  that  the 
income  shall  not  be  alienable  by  anticipation,  nor  subject 
to  be  taken  for  his  debts."3  Morton,  C.  J.,  said  :  "  The 
founder  of  this  trust  was  the  absolute  owner  of  his  prop- 
erty. He  had  the  entire  right  to  dispose  of  it,  either  by 
an  absolute  gift  to  his  brother,  or  by  a  gift  with  such 
restrictions  or  limitations,  not  repugnant  to  law,  as  he  saw 

fit  to  impose We  do  not  see  why  the  founder  of  a 

trust  may  not  directly  provide  that  his  property  shall  go 
to  his  beneficiary  with  the  restriction  that  it  shall  not  be 
alienable  by  anticipation,  and  that  his  creditors  shall  not 
have  the  right  to  attach  it  in  advance,  instead  of  indirectly 
reaching  the  same  result  by  a  provision  for  a  cesser  or  a 
limitation  over,  or  by  giving  his  trustees  a  discretion  as  to 
paying  it.  He  has  the  entire  jus  disponendi,  which  imports 
that  he  may  give  it  absolutely,  or  may  impose  any  restric- 
tions or  fetters  not  repugnant  to  the  nature  of  the  estate 
which  he  gives.  Under  our  system  creditors  may  reach 
all  the  property  of  the  debtor  not  exempted  by  law,  but 
they  cannot  enlarge  the  gift  of  the  founder  of  a  trust,  and 
take  more  than  he  has  given." 


'Brandon    v.    Robinson,    18    Ves.  &  B.    Eq.    (N.    C.)  480;    Mebane  v. 

429  ;  Green  v.  Spicer,  1  Russ.  &  Myl.  Mebane,  4  Ired.  Eq.  (N.  C.)  131. 
395  ;  Rochford   v.   Hack  man,  9  Hare         3  Citing   Holdsbip    v.    Patterson,  7 

475  ;  Trappes    v.    Meredith,    L.    R.   9  Watts  (Pa.)  547  ;  Shankland's  Appeal, 

Eq.  229;  Snowdon  v.   Dales,  6  Sim.  47  Pa.  St.    113;  Rife  v.  Geyer,  59  Pa. 

524 ;  Rippon  v.  Norton,  2  Beav.  63.  St.  393  ;  White  v.  White,  30  Vt.  338  ; 

2Tillinghast    v.  Bradford,  5  R.    I.  Pope's    Ex'rs  v.    Elliott,   8  B.    Mon. 

205;  Heath   v.    Bishop,  4   Rich.  Eq.  (Ky.)56;  Nichols  v.  Eaton,  91  U.  S. 

(S.  C.)  46  ;  Dick  v.  Pitchford,  1  Dev.  716,;  Hyde  v.  Woods,  94  U.  S.  523. 
42 


658  SPREAD    OF   THE   DOCTRINE.  §  367a 

This  is  probably  one  of  the  most  advanced  statements 
of  the  objectionable  doctrine,  though  Claflin  v.  Claflin  1 
in  some  respects  outranks  it.  Reference  is  here  made  to 
cases  like  Broadway  National  Bank  v.  Adams,  and  to  the 
dictum  in  Nichols  v.  Eaton,  now  much  quoted  and  relied 
upon,  not  as  embodying  salutary  rules  or  wise  principles 
of  law,  but  rather  to  record  a  protest  against  the  existence 
and  growth  of  a  class  of  cases  of  which  these  have  been 
the  forerunners.  The  creation  of  an  aristocracy  of  prodi- 
o-als  who  can  dwell  in  luxury  and  defy  their  creditors, 
brings  the  administration  of  justice  into  disrepute,  and  has 
a  demoralizing  influence  upon  industrious  people.  The 
creditor,  as  we  have  said,  is  unjustly  deprived  of  the  power 
to  compel  his  debtor  to  forego  the  comforts  and  luxuries  of 
wealth,  or  to  feel  the  privations  and  inconveniences  inci- 
dent to  insolvency.  The  tendency  of  these  cases  must 
be  checked  by  legislation,  or  the  sober  second  thought  of 
the  courts  ;  the  doctrine  will  not  be  indefinitely  tolerated 
by  the  American  people,  for  it  is  both  undemocratic  and 
not  in  keeping  with  the  spirit  of  American  institutions.^ 

§  367a.  Spread  of  the  doctrine. — None  of  the  defects  and 
inaccuracies  instanced  moved  the  courts  to  re-examine  the 
dictum  in  Nichols  v.  Eaton.  It  has  spread  in  all  directions, 
and  some  States  have  reversed  former  well-decided  cases 
and  hastened  to  adopt  the  unfortunate  conclusions  of  the 
dictum.  Smith  v.  Towers,2  in  Maryland,  is  one  of  the  most 
startling  and  instructive  of  the  cases  following  Nichols  v. 
Eaton,3  and  Broadway  National  Bank  v.  Adams,4  and 
.departing  from  the  old  landmarks.  The  devise  was  made  to 
a  trustee  to  pay  the  income  into  the  debtor's  "own  hands, 

L49  Mass.   19,  30  N.  E.  Rep.  454.  452,  '.)  S.  W.  Rep.  785;  Jourolmon  v. 

69  Md.  77.  II  At).  Rep.  197,  15  I<1.  Massengill,  86  Tenn.  81,  5  S.  W.  Rep. 

92  :  Maryland  Grange  A.gency  v.  Lee,  719;  Garland  v.  Garland,  *7  Va.  75S, 

72  Md    L61,  L9  All.  Rep.  ".34.     'Sees.  P.  18  S.  E.  Rep.  478. 

Barnes?  Dow,  59  Vt.  530, 10  Atl.  Rep.  91  U.S.  727. 

258;    Partridge    v.  Cavender.  9<>  Mo.  '  !:'.:{  M;iss.  170. 


§  367^  SPREAD   OF   THE    DOCTRINE.  659 

and  not  into  another,  whether  claiming  by  his  authority 
or  otherwise."  On  the  debtor's  demise  the  property  was 
given  in  fee  to  his  children.  The  creditor's  suit  failed 
to  reach  the  debtor's  interest  in  this  income.  Alvey,  C.  J., 
filed  a  strong  dissenting  opinion  which  clearly  sets  forth 
the  arguments  advanced  against  these  obnoxious  trusts.1 
In  Connecticut  the  cases  are  not  uniform.  The  court 
employs  this  language  in  one  decision  :  "  All  property 
exempt  by  statute  from  attachment  is  within  the  excep- 
tion ;  so  is  ordinary  trust  property  designed  to  secure  a 
maintenance  for  some  unfortunate  debtor  ;  so  also  the 
income  of  trust  property,  where  it  is  payable  to  the  bene- 
ficiary at  the  discretion  of  the  trustee."  ~  In  Pennsyl- 
vania it  is  said  :  "  We  do  not  approve  of  that  portion  of 
the  opinion  of  the  learned  court  below  in  which  it  was 
held  that  a  married  woman  cannot  make  a  valid  spend- 
thrift trust  in  favor  of  her  husband. "  3  As  will  appear, 
the  decisions  are  in  some  confusion  in  that  State.  In 
Wanner  v.  Snyder,4  a  charge  upon  the  income  was  held 
to  exempt  it  from  the  attack  of  the  creditors  of  the  bene- 
ficiary, and  much  the  same  position  is  assumed  in  West 
Virginia.5  North  Carolina  now  leans  somewhat  against 
alienations  of  equitable  estates,6  though  some  cases  are 
the  other  way.7  The  trust  tendency  shows  itself  a  little 
in  Alabama,8  though  most  of  its  cases  follow  the  English 

1  Compare  Baker  v.  Keiser,  75  Md.  5  McClure  v.  Cook,  39  W.  Va.  579, 
338,  23  Atl.  Rep.  735.  20  S.  E.  Rep.  612. 

2  Tolland  County  Ins.  Co.  v.  Under-  s  Monroe  v.  Trenholm,  112  N.  C. 
wood,  50  Conn.  493.  But  compare  634.  17  S.  E.  Rep.  439;  Kirby  v. 
Farmers'  &  M.  Savings  Bank  v.  Boyette,  116  N.  C.  165,  21  S.  E.  Rep. 
Brewer,  27  Conn.  600;  Tarrant  v.  697  ;  S.  c.  again  118  N.  C.  244,  24  S.  E. 
Backus,  63   Conn.  277,    287,    28  Atl.  Rep.  18. 

Rep.  46  :   Donalds  v.  Plumb,  8  Conn.  7  See   Mebane    v.    Mebane,    4  Ired. 

447  ;  Easterly  v.  Keney,  36  Conn.  18.  Eq.  (N.  C.)  131  ;  Dick  v.  Pitchford,  1 

3  Wanner  v.  Snyder,  177  Pa.  St.  Dev.  &  Bat.  Eq.  (N.  C.)  480;  Pace  v. 
208,   35   Atl.    Rep. "  604.     See  §  368  ;  Pace,  73  N.  C.  119. 

Rife  v.  Geyer,  59  Pa.  St.  393.  s  Moses  v.  Micou,  79  Ala.  564.  Cotn- 

4 177  Pa.  St.  208.  pare  Bell  v.  Watkins,  82  Ala.  512. 


66o 


SPREAD   OF   THE   DOCTRINE. 


§367^ 


rule.1  The  new  doctrine  has  been  taken  up  in  Vermont,2 
Missouri,3  Tennessee,4  Virginia,5  Mississippi,6  Indiana,7 
Delaware,8  Massachusetts,9  Illinois10 and  Maine.11  Against 
these  trusts  are  Rhode  Island,12  New  York  prior  to  its 
statutory  policy,13 and  in  a  limited  way  under  its  statutory 
policy,11  South  Carolina,15  Georgia,16  Ohio,17  Kentucky,18 
though  the  decisions  waver,19  New  Jersey  but  for  its  statu- 


1  Jones  v.  Reese,  65  Ala.  134  ;  Rob- 
ertson v.  Johnston,  36  Ala.  197. 

8  Barnes  v.  Dow,  59  Vt.  530,  10  Atl. 
Rep.  258.  Compare  White  v.  White, 
30  Vt.  338. 

3  Partridge  v.  Cavender,  96  Mo. 
452,  9  S.  W.  Rep.  785  ;  Jarboe  v.  Hey, 
122  Mo.  349,  26  S.  W.  Rep.  968.  Com- 
pare Mcllvaine  v.  Smith,  42  Mo.  45  ; 
Lackland  v.  Smith,  5  Mo.  App.  153  ; 
Pickens  v.  Dorris,  20  Mo.  App.  1 . 

4  Jonrolmon  v.  Massengill,  86  Tenn. 
81,  5  S.  W.  Rep.  719.  See  Porter  v. 
Lee,  88  Tenn.  782,  14  S.  W.  Rep.  218. 
Compare  Turley  v.  Massengill,  7  Lea 
(Tenn.)  353  ;  Hooberry  v.  Harding.  3 
Tenn.  Ch.  677  ;  s.  c.  on  appeal,  10  Lea 
(Tenn.)  392. 

5  Garland  v.  Garland,  87  Va.  758,  13 
S.  E.  Rep.  478.  Compare  Johnston  v. 
Zane,  11  Gratt  (Va.)  552;  Perkins  v. 
Dickinson,  3  Gratt  (Va.)  355. 

6  See  Leigh  v.  Harrison,  69  Miss. 
923. 

1  See  Thompson  v.  Murphy,  10  Ind. 
App.  464,  37  N.  E.  Rep.  1094  ;  Martin  v. 
Davis,  82  Ind.  38. 

8  Gray  v.  Corbit,  4  Del.  Ch.  135. 

9  Broadway  Nat'l  Bank  v.  Adams, 
188  Mass.  170;  Billings  v.  Marsh,  153 
Mass.  311.  In  Evans  v.  Wall,  159 
Mass.  104.  the  court  says:  "The 
general  rule  is  that  income  may  be 
reached  by  a  creditor,  unless  there  is 
something  in  the  language  of  the  in- 
strument creating  the  trust  clearly 
showing  an  intention  to  the  contrary 
Sears  v.  Choate,  146  Mass.  395,  398, 
15N.  E.  Rep.  786;  Maynard  v.  Cleaves, 


149  Mass.  307,  308,  21  N.  E.  Rep. 
376." 

10Steib  v.  Whitehead,  111  111.247. 
See  Springer  v.  Savage,  143  111.  301, 
32  N.  E.  Rep.  520. 

"Roberts  v.  Stevens,  84  Me.  325, 
24  Atl.  Rep.  873.  In  Maine  a  guardian 
may  be  appointed  for  a  spendthrift. 
Young  v.  Young,  87  Me.  44,  32  Atl. 
Rep.  782. 

12 Tillinghast  v.  Bradford,  5  R.  I. 
205.  Compare  Ryder  v.  Sisson,  7  R.  I. 
341  ;  Stone  v.  Westcott,  29  Atl.  Rep. 
833. 

13  Bryan  v.  Knickerbacker,  1  Barb. 
Ch.  (N.  Y.)  409  ;  Havens  v.  Healy,  15 
Barb.  (N.  Y.)  296  ;  Bramhall  v.  Ferris, 
14  N.  Y.  41. 

14  See  §  367b. 

15  Heath  v.  Bishop,  4  Rich.  Eq.  (S. 
C.)  46.  Compare  Wylie  v.  White,  10 
Rich.  Eq.  (S.  C.)  294. 

18  Bailie  v.  McWhorter,  56  Ga.  183. 
Compare  Kempton  v.  Hallowed,  24 
Ga.  52;  Mathews  v.  Paradise,  74  Ga. 
523. 

11  Wallace  v.  Smith,  2  Handy  (Ohio) 
79  :  Hobbs  v.  Smith,  15  Ohio  St.  419  ; 
Stanley  v.  Thornton,  7  Ohio  C.  C.  455. 

18  Flournoy  v.  Johnson,  7  B.  Mon. 
(  Ky.)  693  ;  Cosby  v.  Ferguson,  3  J.  J. 
Marsh.  (Ky  )  264  ;  Eastlake  v.  Jordan. 
3  Bibb  (Ky.)  186:  Samuel  v.  Salter,  3 
Met.  (Ky.)»59;  Ernst  v.  Sliinkle,  95 
Ky.  608,  26  S.  \V.  Pep.  813;  Knefler 
v.  Shreve,  78  Ky.  297, 

19  White  v.  Thomas,  8  Bush  (Ky.) 
661  :  Pope  v.  Elliott,  8  B.  Mon.  (Ky.) 
56. 


§  367b  NEW   YORK    RULE.  66 1 

tory  policy,1  such  policy  exempting  income  unless  it 
reaches  $4,ooo,2  Arkansas 3  and  Wisconsin.*  These 
trusts  have  certainly  gained  a  stronger  footing  since  our 
last  edition.  The  Federal  decisions  are  not  to  be  recon- 
ciled and  are  naturally  overshadowed  by  Nichols  v. 
Eaton,5  though  Nichols  v.  Levy,6  where  the  English 
rule  is  stated,  is  sometimes  cited. 

§  367b.  New  York  rule  as  to  trust  income.  —  Cases 
arising  outside  the  provisions  of  the  Revised  Statutes  of 
New  York  favor  the  seizure  of  equitable  interests.7  The 
statute  provides  that  income  "  beyond  the  sum  that  may 
be  necessary  for  the  education  and  support  "  of  the  bene- 
ficiary shall  be  liable  in  equity  for  debts,  and  that  the 
beneficiary  cannot  assign  his  beneficial  interest.8  It  has 
already  appeared,9  that  under  these  statutes  surplus 
income  may  be  reached  by  a  creditor's  bill.10  Kilroy  v. 
Wood,11  in  that  State,  has  been  sharply  criticised  because 
it  alludes  to  the  debtor  as  "  a  gentleman  of  high  social 
standing,  whose  associations  are  chiefly  with  men  of 
leisure,  and  is  connected  with  a  number  of  clubs,  with  the 
usages  and  customs  of  which  he  seems  to  be  in  harmony 
both  in  practice  and  expenditure."     But  the  court  was,  in 


1  Hardenburgh  v.    Blair,    30  N.  J.  15  Barb.    (N.  Y.)  296  ;  Bramhall  v. 
Eq.   42  ;  Halstead   v.   Westervelt,  41  Ferris,  14  N.  Y.  44. 

N.    J.    Eq.   100.     Compare    Force    v.  » See  Tolles  v.  Wood.  99  N.  Y.  616, 

Brown,  32  N.  J.  Eq.  118  ;  Frazier  v.  1  N.  E.  Rep.  251. 

Barnum,  4  C.  E.  Green  (N.  J.)  316  ;  9  See  Chap.  II. 

Lippincott  v.  Evans,  35  N.  J.  Eq.  553.  10  Williams  v.  Thorn,  70  N.  Y.  270, 

2  Freeholders     of     Hunterdon     v.  81  N.  Y.  381  ;  McEvoy  v.  Appleby,  27 
Henry,  41  N.  J.  Eq.  388.  Hun  (N.  Y.)  44  ;    Tolles  v.  Wood,  99 

3  Lindsay  v.  Harrison.  8  Ark.  302.  N.  Y.  616,  1  N.  E.  Rep.  251  ;    Hallett 

4  Bridge  v.  Ward,  35  Wis.  687 ;  v.  Thompson,  5  Paige  (N.  Y.)  583 
Lamberton  v.  Pereles,  87  Wis.  449,  58  Craig  v.  Hone,  2  Edw.  Ch.  (N.  Y.)  376 
N.  W.  Rep.  776.  But  see  Sumner  v.  Scott  v.  Nevius,  6  Duer  (N.  Y.)  672 
Newton,  64  Wis.  210;  25  N.W.  Rep.  30.  DeCamp  v.   Dempsey,   10  N.  Y.  Civ. 

5  91  U.  S.  716.  Pro.   210  ;    McEwen  v.  Brewster,    17 

6  5  Wall.  433.  Hun  (N.  Y.)  223. 

7  Bryan  v.  Knickerbacker,   1  Barb.  "  42  Hun  (N.  Y.)  636. 
Ch.  (N.  Y.)  409.    See  Havens  v.  Healy, 


662  SPENDTHRIFT   TRUSTS.  §  368 

the  language  quoted,  merely  stating  the  claim  of  counsel, 
for  it  adds  that  "  it  would  seem  that  evidence  might  have 
been  adduced  which  would  establish  his  ability  to  live 
upon  a  smaller  sum  than  the  whole  income,"  and  regrets 
that  the  plaintiff  was  so  weak  with  his  proofs.1  The 
range  of  the  inquiry  and  the  nature  and  extent  of  the 
judgment  impounding  income  is  fully  set  forth  in  Wet- 
more  v.  Wetmore.~  In  New  Jersey  trust  income  beyond 
$4,000  may  be  the  subject  of  discovery  in  aid  of 
execution.3 

§  368.  Spendthrift  trusts  in  Pennsylvania. —  It  is  common 
to  refer  to  Pennsylvania  as  the  birthplace  and  stronghold 
of  the  doctrine  of  spendthrift  trusts.4  Professor  Gray 
places  the  blame  on  Chief-Justice  Gibson  and  adds  :  '4  The 
interference  of  equity  to  compel  people  to  pay  their 
debts  seems  to  have  moved  the  wrath  of  that  sturdy  com- 
mon lawyer." ''  Chief-Justice  Agnew  said,  in  Overman's 
Appeal  :6  "It  [a  spendthrift  trust]  is  exceptionable  in  its 
very  nature,  because  it  contravenes  that  general  policy 
which  forbids  restraints  on  alienation  and  the  non-pay- 
ment of  honest  debts A  trust  to  pay  income  for 

life  may  last  for  the  longest  period  of  human  existence, 
and  may  run  for  seventy  or  eighty  years.  While  the  law 
simply  tolerates  such  a  trust,  it  cannot  approve  of  it  as 
contributing  to  the  general  public  interest.  Property  tied 
up  for  half  a  century   contributes  nothing  to  the  general 


1  See  Estate  of  Hoyt,  12  N.  Y.  Civ.  St.  113  ;  Ashhurstv.  Given,  5W.&S. 

Pro.  308,  230;  and  compare  Stow  v.  (Pa.)  323;  Brown   v.    Williamson,  36 

<  Ihapin,  4  N.  Y.  Sup]).  496.  Pa.  St.  338  ;  Still  v.  Spear,  45  Pa.  St. 

*  149  N.  Y.  521  ;    44  N.  E.  Rep.  169.  168;    Stambaugh's    Estate,    135    Pa. 

Laws  N.  J.  1880,  p.  274.     See  Hal-  St.  596,  19  Atl.  Rep.  1058  ;  Gliormley 

stead  v.  Westervelt,  41  N.  J.  Eq.  100  ;  v.  Smith,  139  Pa.  St.  584,  19  Atl.  Rep. 

Hunterdon   Freeholders  v.  Henry,  41  135;    Mehaffey's  Estate,   139  Pa.  St. 

N.J.  Eq.  283,  20  Atl.  Rep.  1056. 

4  See  Fisher  v.  Taylor,  2  Rawle  (Pa. )  6  Gray  on  Restraints,  §  219. 

Holdship  v.    Patterson,  7   Watts  ''  88  Pa.  St.  276,  281. 
:.H  ;  Shankland's  Appeal,  47  Pa. 


§  368a  POWERS.  663 

wealth,  while  it  is  a  great  stretch  of  liberality  to  the  owner- 
ship of  it  to  suffer  it  to  remain  in  this  anomalous  state  for 
so  many  years  after  its  owner  has  left  it  behind  him. 
Clearly  it  is  against  public  interest  that  the  property  of  an 
after  generation  shall  be  controlled  by  the  deed  \gu.  dead] 
of  a  former  period,  or  that  the  non-payment  of  debts 
should  be  encouraged." x  The  case  of  Ghormley  v. 
Smith3  seems  to  show  a  disposition  to  limit  spendthrift 
trusts  to  settlements  made  by  a  parent  in  favor  of  a  child. 
It  is  doubtful  if  such  a  limitation  will  stand  in  that  State. 
The  court  says  that  Brandon  v.  Robinson  3  is  in  part  the 
law  of  the  State,  and  gravely  says  that  "a  person  sui juris 
could  not  settle  his  entire  estate  upon  himself,  free  from 
liability  for  debts."  The  cases  applicable  to  these  trusts 
are  in  much  confusion  in  Pennsylvania.  The  authorities 
were  started  in  the  wrong  direction  partially  by  the  lack 
of  equity  jurisdiction  in  the  early  history  of  that  State. 
Even  the  proverbial  Philadelphia  lawyer  could  not  deduce 
from  them  any  unbending  rule.4  Generally  the  creditor 
is  defeated  in  that  State  in  pursuing  income,  though  in  a 
measure  each  case  is  a  law  unto  itself.  The  creation 
of  spendthrift  trusts  has  conflicted  with  the  rule  against 
restraints  and  repugnant  conditions,  and  is  not  approved 
by  some  of  the  judges. 

§  368a.  Powers— When  not  assets.  —  Elsewhere 5  the  stat- 
utory policy  of  New  York  State  in  effect  removing  pow- 
ers from  the  category  of  assets  for  creditors6  is  considered 


1  See  Gray  on  Restraints,  £  234 .  19   Atl.  Rep.  302;    Goe's  Estate,  146 

2 139  Pa.  St.  584,  592,  21  Atl.  Rep.  Pa.   St.  431,  23  Atl.  Rep.  383  ;  Bark- 

135.  er*s   Estate,    159  Pa.   St.   518,  28  Atl. 

3 18  Ves.  429.  Rep.  365,  368  ;  Wanner  v.  Snyder.  177 

4 See  Smeltzer  v.  Goslee,  172  Pa.  St.  Pa.  St.  208,  35  Atl.  Rep.  604. 

298,  34  Atl.  Rep.  44  ;  Keyser's  Appeal,  6  See  §  40. 

57  Pa.  St  236;  Cooper's  Estate,  150  Pa.  6  See   Cutting   v.   Cutting,  20  Hun 

St.  576,  24  Atl.  Rep.  1057;    Hinkle's  (N.  Y.)  367,  on  appeal,  86  N.  Y.  537; 

Appeal,  116  Pa.  St.  490,  9  Atl.  Rep.  Crooke  v.  County  of  Kings,  97  N.  Y. 

938;    Beck's  Estate,   133  Pa.    St.  51,  457. 


664  powers.  §  368a 

and  deplored.  The  same  general  principle  of  the  exemp- 
tion of  powers  from  the  process  of  creditors  has  been 
introduced  into  Pennsylvania,1  a  State  in  which  the  courts 
evince  a  tenacious  disposition  to  shield  equitable  assets 
from  the  attacks  of  creditors. 


1  Commonwealth  v.  Duffield,  12  Pa.      306  ;  s.  c.  under  name  of  Swaby's  Ap- 
St.  277;  King's  Estate,  16  Phila.  (Pa.)      peal,  14  W.  N.  C.  553. 


CHAPTER  XXIV. 


BONA     FIDE     PURCHASERS— ACTUAL    AND    CON- 
STRUCTIVE NOTICE  — FRAUDULENT  GRANTEES. 


§369.  Rights  of  bona  fide  purchasers. 

370.  Generality  of  the  rule. 

371.  Mortgagee    as    bona  fide    pur- 

chaser. 
371a.  Execution  purchaser. 

372.  Without  notice. 

373.  Kinds  of  notice. 

374.  Constructive  notice  of  fraud. 

375.  ) 

„     '  y  Rule  in  Stearns  v.  Gage. 

376a.  Anderson  v.  Blood. 

377.  Carroll  v.  Hay  ward— Actual  be- 

lief. 

378.  Parker  v.  Conner. 

379  1 

'  !  Facts  sufficient  to  excite    in- 

380.  r 

381.  j      qUUT- 


i  382.  Actual  belief. 

383.  Purchaser  with  notice. 

384.  Purchaser    with     notice    from 

bona  fide  purchaser. 
384a.  Possession  as  notice. 

385.  Fraudulent    grantee    as    trus- 

tee. 

386.  Title  from  fraudulent  vendee. 

387.  Creditors  of    fraudulent  gran- 

tees. 

388.  Liability     between     fraudulent 

grantees. 

389.  Fraudulent  grantee  sharing  in 

the  recovery. 
389a.  Purchaser  pendente  lite. 


§  369.  Rights  of  bona  fide  purchasers.  —  As  has  been 
observed,  creditors  have  an  equitable  interest  in  the 
property  of  their  debtors,  or  in  the  means  the  latter  have 
of  satisfying  the  creditors'  demands,1  which  the  law  will, 
under  certain  circumstances,  enforce,  since  the  insolvent's 
property  constituted  the  foundation  and  inducement  of 
the  trust  and  credit.2  But  the  interests  of  a  bona  fide 
purchaser3  of  a  debtor's  property  are  superior  to  those  of 


Seymour  v.  Wilson,  19  N.  Y.  418. 
See  Chap.  II. 
*  Egery  v.  Johnson,  70  Me.  261.    See 

3  In  Ricker  v.  Ham,  14  Mass.  141, 
the  court  says  :  "  The  term  bona  fide, 
as  used  in  the  law  upon  this  subject, 
means  only  that  the  purchase  shall  be 


a  real  and  not  a  feigned  one."  s.  p. 
Jones  v.  Light,  86  Me.  443,  30  Atl. 
Rep.  71.  One  who  purchases  from 
an  assignee  for  the  benefit  of  cred- 
itors underavoid  assignment  may  be 
a  purchaser  for  a  valuable  considera- 
tion. Wilson  v.  Marion,  147  N.  Y. 
589,  42  N.  E.  Rep.  190.     A  bona  fide 


666 


BONA   FIDE    PURCHASERS. 


369 


creditors,1  for  the  obvious  reason  that  the  former  has  not, 
like  a  mere  general  creditor,  trusted  "  to  the  personal 
responsibility  of  the  debtor,  but  has  paid  the  considera- 
tion upon  the  faith  of  the  debtor's  actual  title  to  the 
specific  property  transferred."2  In  such  a  case  the  inter- 
ests of  the  general  creditors  are  superseded  or  defeated  3 
by  the  purchaser's  superior  equity.4  It  is  merely  a  sub- 
stitution of  property.  The  value  given  or  paid  by  the 
purchaser  has  taken  the  place  of  the  property  which  he 
received.  Hence  the  rights  of  a  bona  fide  grantee  who 
has  paid  a  full  valuable  consideration  are  protected,5 
though  the  grantor  may  have  been  actuated  by  a  fraudu- 
lent intention.6  Still,  as  we  have  seen,  a  grantee  is  not 
protected   when    he  has  not   paid  such  a  consideration, 


purchaser  from  a  fraudulent  vendee 
takes  a  good  title.  O'Neil  v.  Patter- 
son &  Co.,  52111.  A  pp.  26. 

1  Compare  Valentine  v.  Lunt,  115 
N.  Y.  496,  22  N.  E.  Rep.  209,  where 
a  bona  fide  purchaser  for  value  from 
a  fraudulent  vendee,  held  the  title 
against  the  defrauded  vendor. 

*  Seymour  v.  Wilson,  19  N.  Y.  417, 
420  ;  Holmes  v.  Gardner,  50  Ohio  St. 
175,  33  N.  E.  Rep.  644.  See  Frieden- 
wald  v.  Mullan,  10  Heisk.  (Tenn.) 
229  ;  Goshorn  v.  Snodgrass,  17  W. 
Va.  717  ;  Thames  v.  Rembert,  63  Ala. 
561  :  Collumb  v.  Read,  24  N.  Y.  516  ; 
Mansfield  v.  Dyer,  131  Mass.  200  ; 
Comey  v.  Pickering,  63  N.  H.  126  ; 
Zoeller  v.  Riley,  100  N.  Y.  102,  2  N. 
E.  Rep.  388;  Simpson  v.  Del  Hoy o, 
94  N.  V.  189  ;  Paddon  v.  Taylor,  44 
N.  Y.  371  ;  Lore  v.  Dierkes,  16  Abb. 
N.  C.  (N.  Y.)  47;  Saunders  v.  Lee, 
101  N.  C.  3,  7  S.  E.  Rep.  590;  Bishop 
,  .  Stebbins,  41  Hun  (N.  Y.)  248. 

'See  Dorr  v.  Beck,  76  Hun  (N.  Y.) 
R40  28  X.  V.  Supp.  206. 

•  in  Zoeller  v.  Riley,  100  N.  Y.  108, 
2  N.  E.  Rep.  388,  Earl,  J.,  said  :  "A 
debtor  may  dispose  of  his    property 


with  the  intent  to  defraud  his  cred- 
itors and  yet  give  a  good  title  to  one 
who  pays  value  and  has  no  knowl- 
edge of,  and  does  not  pai-ticipate  in 
the  fraud.  (2  R.  S.  137,  §  5  :  Starin 
v.  Kelly,  88  N.  Y.  418;  Murphy  v. 
Briggs,  89  N.  Y.  446  ;  Parker  v.  Con- 
ner, 93  N.  Y.  118.)"  It  seems  that 
where  the  title  of  an  innocent  pur- 
chaser is  relied  on  he  must  positively 
deny  notice  of  the  equitable  rights  of 
another,  although  not  specifically 
charged.  Seymour  v.  McKinstry,  106 
N.  Y.  230,  12  N.  E.  Rep.  348,  14  Id. 
94. 

5  See  Hawkins  v.  Davis,  8  Baxt. 
(Tenn.)  508  ;  Zick  v  Guebert,  142  111. 
154,  31  N.  E.  Rep.  601  ;  Rindskoph  v. 
Kuder.  145  111.  607,  34  N.  E.  Rep.  484  ; 
Carnahan  v.  McCord.  116  Ind.  67.  18 
N.  E.  Rep.  177  ;  Sipley  v.  Wass,  49  N. 
J.  Eq.  463,  24  Atl.  Rep.  233. 

'  Where  a  resulting  trust  is  not 
evidenced  by  anything  of  record,  an 
innocent  bona  fide  purchaser  without 
notice  will  take  the  estate  divested  of 
the  trust.  De  Mares  v.  Gilpin,  15  Col. 
76,  24  Pac.  Rep.  568. 


§  369  BONA   FIDE   PURCHASERS.  667 

though  he  may  have  acted  in  good  faith.  The  two  must 
concur.1  If  no  consideration  has  been  given  then  there 
has  been  no  substitution  of  property.  The  amount  of  the 
consideration  is  not  necessarily  material  when  the  grantor 
is  solvent,^  but  when  he  is  insolvent  the  kind  and  amount 
of  consideration  become  material  and  important,  even  in 
the  absence  of  actual  intent  to  defraud.  Thus  an  agree- 
ment to  support  an  insolvent  grantor  may  be  a  valuable 
consideration,  but  it  is  not  sufficient  to  uphold  a  convey- 
ance as  against  prior  creditors,3  even  though  there  may 
have  been  no  actual  intent  to  defraud.4  Persons  receiving 
a  conveyance  from  a  grantor  for  such  a  consideration 
must  see  to  it  that  the  existing  debts  of  the  grantor  are 
paid,5  and  it  is  immaterial  that  the  consideration  com- 
prises a  present  sum  of  money  paid  in  addition  to  the 
agreement  for  support,  provided  the  money  alone  were 
palpably  inadequate.6 

Three  things  must  concur  to  protect  the  title  of  the 
purchaser.7  (1)  He  must  buy  without  notice  of  the  bad 
intent  on  the  part  of  the  vendor.  (2)  He  must  be  a  pur- 
chaser for  a  valuable  consideration  ;  and  (3)  He  must 
have   paid   the  purchase  money  before  he  had  notice  of 


1  Savage  v.   Hazard,    11  Neb.   327.  3  Rollins  v.  Mooers,  25 Me.  192-199. 

9  N.  W.  Rep.  83  ;  Danbury  v.   Robin-  4  Webster  v.  Withey,  25  Me.  326. 

son,    14  N.  J.  Eq.  213.     See  §§  15,  207.  5  Hapgood  v.  Fisher,  34  Me.  407. 

In  Keyser  v.    Angle,  40   N.    J.    Eq.  6  Sidensparker  v.  Sidensparker.  52 

481,  4  Atl.  Rep.  641,  it  appeared  that  a  Me.  481.     See  Egery  v.    Johnson,  70 

sister  purchased  land  of  a  brother  who  Me.  261. 

was  in  debt.  She  paid  $50  cash  and  '  Dougherty  v.  Cooper,  77  Mo.  532  ; 
gave  her  note  for  $650,  which  he  held  Herman  v.  McKinney,  47  Fed.  Rep. 
for  four  years  though  very  needy.  It  758.  The  purchaser  is  protected  only 
was  held  that  if  the  sister  had  notice  to  the  extent  of  actual  payments  made 
of  the  fraud  before  she  paid  the  note  before  he  had  notice  of  the  fraud,  tin- 
she  was  not  a  bona  fide  purchaser,  less  he  be  liable  on  his  contract  in 
even  though  she  had  no  notice  when  excess  of  that  amount.  Wetmore  v. 
she  took  the  deed.  Woods,  62  Mo.  App.  265  ;  Riddell  v. 

5  Usher  v.  Hazeltine,    5   Me.    471  ;  Munro,  49  Minn.  532,  52  N.  W.   Rep. 

Hapgood  v.  Fisher,  34  Me.  407.  141. 


668  BONA   FIDE   PURCHASERS.  §  369 

the  fraud.1  Chief-Justice  Marshall  observes  that  "the 
rights  of  third  persons,  who  are  purchasers  without  notice 
for  a  valuable  consideration,  cannot  be  disregarded. 
Titles,  which,  according  to  every  legal  test,  are  perfect, 
are  acquired  with  that  confidence  which  is  inspired  by 
the  opinion  that  the  purchaser  is  safe.  If  there  be  any 
concealed  defect,  arising  from  the  conduct  of  those  who 
had  held  the  property  long  before  he  acquired  it,  of 
which  he  had  no  notice,  that  concealed  defect  cannot  be 
set  up  against  him.  He  has  paid  his  money  for  a  title 
good  at  law  ;  he  is  innocent,  whatever  may  be  the  guilt 
of  others,  and  equity  will  not  subject  him  to  the  penalties 
attached  to  that  guilt.  All  titles  would  be  insecure,  and 
the  intercourse  between  man  and  man  would  be  very 
seriously  obstructed  if  this  principle  be  overturned."2  In 
a  recent  Minnesota  case  it  is  said  that  the  burden  of 
rebutting  the  presumption  of  a  fraudulent  intent  arising 
from  the  continued  possession  of  the  property  by  the 
vendor  rests  on  the  vendee  as  against  creditors.  The 
court  continued  :  "  But  there  is  no  such  burden  resting 
upon  the  vendee  to  show  that  the  vendor  was  not  impli- 
cated in  the  fraud,  because  the  fraudulent  intent  of  the 
vendor  cannot  legally  affect  the  rights  of  a  bona  fide 
purchaser  for  a  valuable  consideration  and  without  notice. 
It  is  sufficient  if  the  vendee  is  innocent  of  any  fraud,  and 
did  not  participate  therein,  and  had  no  notice  of  the 
fraudulent  intent  of  the  vendor."  3  Dillon,  J.,  in  Gardner 
v.  Cole,4  said  that  "  where  the  first  conveyance  originates 
in  a  fraudulent  purpose,  and  is  without  any  consideration 


'See  Arnholt   v.  Hartwig,  73  Mo.  pays  for  it  is  not  entitled  to  protection 

485  ;  Bishop  v.  Schneider,  46  Mo.  472  ;  as  a  bona  fide  purchaser.     Jetton  v. 

Dixon  v.  Bill,  5  Mich.  408:  Hedrick  Tobey,  62  Ark.  84,  34  S.  W.  Rep.  531. 

v.  Strauss,  42  Neb.  485,  60  N.  W.  Rep.  3  Leqre  v.  Smith,  63  Minn.  26,  65  N. 

9SJ8,  \V.  Rep.  121.    See  also  Leach  v.  Flack, 

«  Fletcher  v.    Peck,  6  Cranch  133.  31  Hun  (N.  Y.)  605;  Griffin  v.   Mar- 
Manifestly   one    who   purchases   per-  quardt,  21  N.  Y.  121. 
sonal  property  on   credit  and  never  4  21  Iowa  205,  214. 


§  37°  GENERALLY    OF   THE    RULE.  669 

of  value,  and  the  grantor  remains  in  possession,  and 
claiming  ownership,  sells  the  property  as  his  own  to  a 
party  who  buys  without  actual  notice  of  the  prior  deed 
and  pays  value,  the  latter  purchaser  may  avoid  the  prior 
voluntary  and  fraudulent  conveyance."  1  We  have  seen 
that  conveyances  are  void  which  are  made  to  defraud 
subsequent  purchasers  for  a  valuable  consideration2  Of 
course,  as  we  have  seen,  where  it  is  found  as  matter  of 
fact  that  the  purchase  of  the  property  was  made  by  col- 
lusion with  the  debtor,  with  the  intent  to  hinder  and 
delay  creditors,  the  purchaser  has  no  equities  against 
such  creditors  even  as  regards  the  amount  actually  paid.3 

§  370.  Generality  of  the  rule.  —  A  court  of  equity  acts 
only  on  the  conscience  of  the  party  ;  and  if  he  has  done 
nothing  that  taints  it,  no  demand  can  attach  so  as  to  give 
jurisdiction.4  The  rule  is  not  limited  to  cases  where 
conveyances  are  made  in  fraud  of  creditors,  but  applies 
to  cases  in  which  the  vendor  has  been  swindled  out  of 
his  property  by  a  vendee,  for  whenever  the  property 
reaches  the  hands  of  a  bona  fide  purchaser  for  value,  the 
rights  and  equities  of  the  defrauded  owner  are  cut  off.5 


1  8ee  Hurley  v.  Osier,  44  Iowa  (546.  little  means,  for  an  expressed  con- 
See  note  as  to  the  rights  of  trans-  sideration  of  $4,900,  $800  being  paid 
ferees  and  others  under  conveyances  in  cash,  $250  in  a  span  of  horses,  and 
in  fraud  of  creditors  and  of  trusts,  at  $450  for  labor  alleged  to  have  been 
end  of  Lore  v.  Dierkes,  16  Abb.  N.  previously  performed,  two  unsecured 
C.  (N.  Y.)  47,  59  notes,  one  for  the  sum  of  $1,000,  pay- 

2  Anderson  v.  Etter,  102  Ind.  121,  able  in  two  years,  and  one  for  $2,000, 
26  N.  E.  Rep.  218.     See  g  21.  payable  in  five  years,  and  $900  to  be 

3  Bank  of  Commerce  v.  Fowler,  paid  in  certain  mortgages.  It  was 
93  Wis.  245  ;  Ferguson  v.  Hillman.  55  held,  on  the  testimony,  that  the  son 
Wis.  190,  12  N.  W.  Rep.  389.  See  §  198.  was  not  a  bona  fide  purchaser  of  the 

4  Boone  v.  Chiles,  10  Pet.  177.  In  land,  and  that  it  was  liable  for  the 
Knowlton  v.    Hawes,  10  Neb.   534,   7  payment  of  the  judgment. 

N.  W.   Rep.  286,   it  appeared  that  a  6  Paddon   v.  Taylor,  44  N.  Y.   371  ; 

father,  after  an  obligation   had  been  Brower  v.    Peabody,   13   N.    Y.    121  ; 

incurred,   but  before  judgment,  con-  Load    v.    Green,    15   M.    &    W.    216 ; 

veyed    his    real   estate,    worth    more  Smart  v.   Betnent,  4  Abb.  App.  Dec. 

than  $5,000,  to  his  son,  who  had  but  (N.  Y.)  253  ;  Bruen  v.  Dunn,  87  Iowa 


6/0 


MORTGAGEE   AS   A   BONA   FIDE    PURCHASER. 


371 


"  A  purchaser  for  a  valuable  consideration,  without  notice 
of  a  prior  equitable  right,  obtaining  the  legal  estate  at 
the  time  of  his  purchase,  is  entitled  to  priority  in  equity 
as  well  as  at  law,  according  to  the  well-known  maxim 
that  when  the  equities  are  equal  the  law  shall  prevail."1 
If  creditors  condone  the  fraud  the  grantee's  title  is 
eood  against  all  comers.2 

§  371.  Mortgagee  as  bona  fide  purchaser.  —  A  mortgagee 
is  a  purchaser3  to  the  extent  of  his  interest.4  New  York 
has  taken  an  advanced  position  on  this  question.  It  is 
held  in  that  State  that  where  property  is  conveyed  to  a 
voluntary  grantee,  and  the  latter,  at  the  grantor's  request, 
executes  a  mortgage  upon  the  land  to  a  creditor  of  the 
grantor,  to  secure  a  debt  of  the  grantor's  which  existed  at 
the  time  of  the  conveyance,  the  mortgagee  is  a  bona  fide 
purchaser  for  a  valuable  consideration,  and  though  the 
conveyance  may  be  set  aside  by  other  creditors,  the 
mortgagee  will  not  be  affected.5     The  giving  of  the  mort- 


483,  54  N.  W.  Rep.  468.  Though  the 
Rhode  Island  statute  omits  the  pro- 
vision about  bona  fide  purchasers  for 
value  contained  in  the  English  stat- 
ute, it  is  considered  that  the  statute 
should  be  construed  the  same  as 
though  that  provision  had  not  been 
omitted.  Tiernay  v.  Claflin,  15  R.  I. 
220,  2  Atl.  Rep.  762. 

1  Townsend  v.  Little,  109  U.  S.  512, 
3  S.  C.  Rep.  357.  Citing  Williams 
v.  Jackson,  107  U.  S.  478,  2  S.  C.  Rep. 
814  ;  Willoughby  v.  Willoughby,  1  T. 
R.  763  ;  Charlton  v.  Low,  3  P.  Wms. 
328;  Ex  parte  Knott,  11  Ves,  609; 
Tildesley  v.  Lodge,  3  Sm.  &  Giff.  543  ; 
Shine  v.  Gough,  1  Ball  &  B.  436; 
Bowen  v.  Evans,  1  Jones  &  La  T.  264  : 
Vattier  v.  Hinde,  7  Pet.  252.  Ab- 
sence  <>i  good  faith  must  be  made  out 
bya  clear  preponderance  of  evidence. 
Bradford  v.  Bradford,  60  Iowa  20-2.  I  I 
N.  W.  Rep.  254. 


2  Millington  v.  Hill,  47  Ark.  309, 
1  S.  W.  Rep.  547. 

3  Boice  v.  Conover,  54  N.  J.  Eq. 
531,  35  Atl.  Rep.  402. 

4  Ledyard  v.  Butler,  9  Paige  (N.  Y.) 
132  ;  Murphy  v.  Briggs,  89  N.  Y.  451  ; 
Zoeller  v.  Riley,  100  N.  Y.  108,  2  N. 
E.  Rep.  388;  Holmes  v.  Gardner,  50 
Ohio  St.  167,  33  N.  E  Rep.  644  ;  Jones 
v.  Light,  86  Me.  443,  30  Atl.  Rep.  71  ; 
Chapman  v.  Emery,  I  Cowper  278  ; 
Hill  v.  Ahern,  135  Mass.  158  ;  Valen- 
tine v.  Lunt,  115  N.  Y.  496,  22  N.  E. 
Rep.  209. 

5  Murphy  'v.  Briggs,  89  N.  Y.  446. 
See  upon  this  confused  question  2 
Pomeroy's  Eq.  Jur.  ££  748,  749,  and 
cases  cited ;  Metropoliton  Bank  v. 
Godfrey,  23  111.  579  ;  Manhattan  Co. 
v.  Evertson,  6  Paige  (N.  Y.)  457  ;  Low- 
ry  v.  Smith,  9  Hun  (N.  Y.)  514; 
Smart  v.  Betnent,  4  Abb.  App.  Dec. 
(N.  Y.)  253;  Willoughby  v.Willoughby, 


§§  37  la»  37-     EXECUTION  PURCHASER  —  WITHOUT  NOTICE.      671 

gage  was  regarded  as  merely  applying  the  property  for 
the  benefit  of  creditors  by  rescinding  the  fraudulent 
transaction,  and  entering  into  a  new  valid  contract.  As 
we  have  seen,1  the  law  does  not  deprive  parties  of  the 
right  to  restore  to  its  legitimate  purposes  property  which 
has  been  fraudulently  appropriated.2 

§  371a.  Execution  purchaser.  —A  purchaser  at  an  execu- 
tion sale  may  bring  suit  to  set  aside  a  prior  deed  of  the 
land  made  in  fraud  of  the  judgment-creditor's  claim. :i 

§  372.  Without  notice.  —  Judge  Story  observes  that  :  "  It 
is  a  settled  rule  in  equity  that  a  purchaser  without  notice, 
to  be  entitled  to  protection,  must  not  only  be  so  at  the 
time  of  the  contract  or  conveyance,  but  at  the  time  of  the 
payment  of  the  purchase-money."  4  On  the  other  hand,  it 
was  said  in  a  case  which  arose  in  Georgia  that  the  pur- 
chaser at  a  sale  made  with  intent  to  defraud  creditors,  if 
himself  free  from  all  responsibility  for  the  fraud,  was  not 
affected  upon  afterward  discovering  the  seller's  fraud- 
ulent intent,  even  though  he  had  not  then  paid  the  pur- 
chase-money, and  the  notes  given  for  it  had  not  passed 
beyond  the  control  of  himself  and  the  seller,  it  not  appear- 
ing- that  he  alone  could  control  the  notes  without  the 
co-operation  of  the  seller,  or  that  the  latter  could  have 
been  induced  to  cancel  or  surrender  the  notes,  which  were 
negotiable.5  In  the  United  States,  even  in  States  where 
the  statutes  are  a  literal  rescript  of  the  English  statutes 
of  13  and  27  Elizabeth,  the  general  doctrine  is,  that  the 
right   of    the    subsequent    purchaser    to    avoid    the    first 


1  T.  R.  763  ;  Dickerson  v.  Tillinghast,  3  Fuller  v.  Pinson,  98  Ky.  441,  33  S. 

4  Paige   (N.  Y.)  215;  Boyd  v.  Beck,  W.  Rep.  399. 

29  Ala.  713;   Wells  v.  Morrow,  38  Ala.  4Wormley   v.  Wormley,   8  Wheat. 

125  ;  Porter  v.  Green,  4  Iowa  571.  449  ;  Hedrick  v.  Strauss,  42  Neb.  485, 

1  See  §  176.  60  N.   W.  Rep.  928.     See  Arnholt  v. 

2  Murphy  v.  Briggs,  89  N.   Y.   446.  Hartvvig,  73  Mo.  485. 

But  compare  Wood  v.   Robinson,   22  5  Nicol  v.  Crittenden,  55  Ga.  497. 

N.  Y.  564. 


672  KINDS   OF   NOTICE.  §  373 

conveyance  will  depend  on  whether  he  had  notice  of  its 
existence  at  the  date  of  his  purchase.1  This  leads  us  to 
the  consideration  of  one  of  the  most  important  branches 
of  our  subject,  the  doctrine  of  notice  as  applied  to  covin- 
ous alienations. 

§  373-  Kinds  of  notice.—  Notice  is  of  two  kinds,  actual 
and  constructive.'*  Actual  notice  may  be  shown  to  have 
been  received  or  given  by  all  degrees  and  grades  of  evi- 
dence, from  the  most  direct  and  positive  proof  to  the 
slightest  circumstance  from  which  a  jury  would  be  war- 
ranted in  inferring  notice.  It  is  a  mere  question  of  fact, 
and  is  open  to  every  species  of  legitimate  evidence  which 
may  tend  to  strengthen  or  impair  the  conclusion.  Con- 
structive notice,  on  the  other  hand,  is  a  legal  inference 
from  established  facts  ;  and,  like  other  legal  presumptions, 
does  not  admit  of  dispute.3  "  Constructive  notice,"  says 
Judge  Story,  "is  in  its  nature  no  more  than  evidence  of 
notice,  the  presumption  of  which  is  so  violent  that  the 
court  will  not  even  allow  of  its  being:  controverted."4 
Substantially  the  same  language  is  employed  by  Mr.  Jus- 
tice Woods  in  Townsend  v.  Little.5  Chancellor  Kent 
said :  "  I  hold  him  chargeable  with  constructive  notice,  or 
notice  in  law,  because  he  had  information  sufficient  to 
put  him  upon  inquiry."6  "Constructive  notice,"  says 
Wright,  J.,  ""  is  a  legal  inference  from  established  facts  ; 


'See  Prestidge   v.  Cooper,  51  Miss.  Griffith,   1  Hoffm.  Ch.    (N.    Y.)    155; 

77.    Wyman   v.   Brown,  50  Me.   148,  Hiern  v.  Mill,  13  Ves.   120  ;  Claflin  v. 

lays  down  the  rule,  however,  that  a  Lenheim,    66  N.   Y.  306  ;  Birdsall  v. 

fraudulent   voluntary  conveyance  is  Russell,  29  N.  Y.  220,  249. 

void   as  against    a    subsequent    pur-  4  Story's  Eq.  Jur.  §  399 ;    Rogers  v. 

chaser  even   with  notice.     See  Hud-  Jones,  8  N.  H.  270  ;  Cambridge  Val- 

nal  v.  Wilder,  4  McCord's  (S.  C.)  Law  ley  Bank  v.  Delano,  48  N.  Y.  339. 

295.  5109   U.  S.  511,  3  S.  C.  Rep.    357. 

2  Lord  Erskine  in  Hiern  v.  Mill,  13  Citing  Plumb  v.  Fluitt,  2  Anstr.  432; 

Ves.  120.  Kennedy  v.  Greene,  3  Mylne  &  K.  699. 

5Selden,    J.,      in     Williamson     v.  6  Sterry  v.  Arden,  1  Johns.  Ch.  (N. 

Brown,    15   N.    Y.    359;    Griffith   v.  Y.)  261, 267. 


§  374  NOTICE   OF   FRAUD.  673 

and  when  the  facts  are  not  controverted,  or  the  alleged 
defect  or  infirmity  appears  on  the  face  of  the  instrument, 
and  is  a  matter  of  ocular  inspection,  the  question  is  one 
for  the  court."  1  Constructive  notice  has  been  said  to  be 
of  two  kinds  ;  that  which  arises  upon  testimony  and  that 
which  results  from  a  record.2 

Actual  notice  is  usually  a  question  for  the  jury,  and  is 
to  be  established  by  implication  or  inference  from  other 
facts3  or  circumstances.4  There  is  no  particular  kind  of 
evidence  necessary  to  establish  it ;  anything-  that  proves 
it  or  constitutes  legal  evidence  of  knowledge  is  com- 
petent.5 It  is  otherwise  as  to  constructive  notice.  There 
the  law  imputes  notice  to  the  purchaser,  and  whether  or 
not  this  will  be  done  upon  a  conceded  state  of  facts  is 
not  a  question  for  the   jury.6 

§  374-  Constructive  notice  of  fraud.  —  The  principles 
which  govern  and  control  the  general  doctrine  of  con- 
structive notice  of  fraud  as  bearing  upon  our  subject  are 
not  always  entirely  clear.  Williamson  v.  Brown,7  already 
cited,  contains  an  important  review  of  the  authorities  by 
the  learned  Justice  Selden,  as  to  the  general  subject  of 


1  Birdsall  v.  Russell,  29  N.  Y.  249.  innocent  and  free  from  any  guilty 
See  Page  v.  Waring,  76  N.  Y.  471.  knowledge,    or    even     suspicion     of 

2  Griffith  v.  Griffith,  1  Hoffm.  Ch.  fraud  ;  but  if  they  find  that  facts 
(N.  Y. )  156.  were  known  to  him  which  were  cal- 

3  Bradbury  v.  Falmouth,  18  Me.  65;  dilated  to  put  him  on  inquiry,  his 
H.  T.  Simon-Gregory  Dry  Goods  Co.  want  of  diligence  in  making  such  in- 
v.  Schooley,  66  Mo.  App.  413.  quiry  is  equivalent  to  a  want  of  good 

4  McNally  v.  City  of  Cohoes,  127  N.  faith,  and  the  presumption  of  notice 
Y.  350,  27  N.  E.  Rep.  1043  :  Ross  v.  is  a  legal  presumption  which  is  un- 
Caywood,  16  App.  Div.  (N.  Y. )  592  ;  controvertible."  Rapallo,  J.,  in  Par- 
Anderson  v.  Blood,  152  N.  Y.  285,  46  ker  v.  Conner,  93  N.  Y.  124.  "The 
N.  E.  Rep.  493.  whole  basis  of  the  rule  is  negligence 

5  Trefts  v.  King,  18  Pa.  St.  160  in  the  purchaser.     It  is  a  question  of 

6  Birdsall  v.  Russell,  29  N.  Y.  249.  good  faith  in  him."  Peckham,  J., 
"  If  the  doctrine  of  constructive  notice  in  Acer  v.  Westcott.  46  N.  Y.  384,  389. 
is  applicable,  it  is  immaterial  how  the  '  15  N.  Y.  362;  H.  T.  Simon-Gregory 
fact  is.  The  jury  may  be  satisfied  that  Dry  Goods  Co.  v.  Schooley,  66  Mo. 
the  purchaser  was,   in   fact,  entirely  App.  413. 

43 


674  NOTICE   OF   FRAUD.  •  §  374 

notice.  Baker  v.  Bliss,1  where  the  question  was  as  to 
whether  or  not  a  purchaser  took  with  knowledge  of  the 
fraud  affecting  the  title  of  his  vendor,  seems  to  clearly 
establish  the  rule  that  to  charge  a  party  with  such  notice 
the  circumstances  known  to  him  must  be  of  such  charac- 
ter as  ought  reasonably  to  have  excited  his  suspicion, 
and  led  him  to  inquire.2  It  appeared  that  the  purchaser 
had  paid  a  valuable  consideration,  and  had  testified  and 
the  referee  had  found,  that  he  had  no  actual  notice  or 
knowledge  of  the  fraud  which  rendered  the  conveyance 
void  as  against  creditors,  ''  but  that  he  had  sufficient 
knowledge  to  put  him  upon  inquiry,  and  that  such  knowl- 
edge was  equivalent  to  notice,  and  in  law  amounted  to 
constructive  notice."  Cases  like  Williamson  v.  Brown  8 
are  cited  and  applied  in  the  opinion.  In  Ellis  v.  Horr- 
man,4  a  record  act  case,  Tracy,  J.,  said  :  "  Notice  suffi- 
cient to  make  it  the  duty  of  a  purchaser  to  inquire,  and 
failure  so  to  do  when  information  is  easily  accessible,  is 
equivalent  to  actual  notice  within  the  rule  of  the  author- 
ities." Paige,  J.,  observed  in  Williamson  v.  Brown  : 5 
"A  party  in  possession  of  certain  information  will  be 
chargeable  with  a  knowledge  of  all  facts  which  an  inquiry 
suggested  by  such  information,  prosecuted  with  due  dili- 
gence,   would    have    disclosed    to    him."6      In    Reed    v. 


1  39  N.  Y.  70.  Paige  (N.  Y.)  421  ;  Taylor  v.  Baker,  5 

-  See  Burnham    v.   Brennan,   10  J.  Price  306  ;  Jones  v.  Smith,  1  Hare  43- 

&  S.  (N.  Y.)  79;  reversed,  74  N.  Y.  55.     Compare  Pringle  v.    Phillips.   5 

597;  Blum  v.  Simpson,  71  Tex.  628,  Sandf.  (N.  Y.)  157;  Danforth  v.  Dart, 

9  S.  W.  Rep.  662 ;  Hadock  v.  Hill,  75  4  Duer  (N.  Y.)  101  ;  Roeber  v.  Bowe, 

Tex.  193,  12S.  W.  Rep.  971.  20     Hun    (N.     Y.)    556;     Pitney    v. 

15  N.  Y.  362.  Leonard,  1   Paige  (N.   Y.  461;  Peters 

4  90  N.  Y.   473.  v.  Goodrich,  3  Conn.  146  :   Booth   v. 

15  N.  Y.  364.  Barnum,    9    Conn.    286;    Whitbread 

■  See   Howard  Ins.  Co.  v.  Halsey,  4  v.   Jordan,     1  Y.  &  C.  328;  Shaw  v. 

Sandf.  (N.Y.)  578;  Kennedy  v.  Green,  Spencer,     100    Mass.    390;     Jenkins 

3  Mylne<&  K.  699;  Flagg  v.  Mann,  2  v.  Eldredge,   3  Story  lsi  ;  Heaton  v. 

Sumner  534;  Be stl    v.    Buchan,  76  Prather,  84   111.  330;  Garahy  v.  Bay- 

N.    Y.  386;  Grimstone  v.   Carter,   3  ley,  25  Tex.  Supp.  294;    Birdsall   v. 


§375  STEARNS   V.    GAGE.  675 

Gannon,1  it  appeared  that  the  parties  dealt  upon  the 
assumption  that  there  were  liens  or  incumbrances  upon  the 
property,  but  their  number,  extent  or  character  was  not 
stated.  Rapallo,  J.,  said  :  "The  insertion  of  these  clauses 
in  the  instrument  was  sufficient  to  put  the  plaintiffs  on 
inquiry  as  to  the  extent  and  description  of  the  existing 
incumbrances  referred  to."  It  was  such  notice  as  in  the 
language  of  the  authorities  "  would  lead  any  honest  man, 
using  ordinary  caution,  to  make  further  inquiries."2 
"  Constructive  notice,"  said  Haight,  J.,  in  Farley  v.  Car- 
penter,3 "  is  a  knowledge  of  circumstances  which  would  put 
a  careful  and  prudent  person  upon  inquiry,  or  such  acts  as 
the  law  will  presume  the  person  had  knowledge  of,  on  the 
grounds  of  public  policy  ;  as,  for  instance,  the  laws  and 
public  acts  of  the  government,  instruments  recorded  pur- 
suant to  law,  advertisements  in  a  newspaper  of  a  notice  or 
process  authorized  by  statute."4 

§  375-  Rule  in  Stearns  v.  Gage.  — The  question  of  what 
constitutes  "  notice  "  of  fraud,  or  of  a  fraudulent  intent,  is 
one  of  manifest  importance  to  creditors  and  purchasers. 


Russell,  29  N.Y.  220;  Moore  v.  William-  generally  applied  to  the  examination 

son,  44  N.  J.  Eq.  496,  15  Atl.  Rep.  587  ;  of  titles  to  real  estate.     It  is  the  duty 

Kellar  v.  Taylor,  90  Ala.  289,  7  So.  of  a  purchaser  of  real  estate  to  inves- 

Rep.  907 ;  Allen  v.  Stingel,   95  Mich,  tigate  the  title  of  Ids  vendor,  and  to 

195,   54   N.   W.   Rep.    880  ;  Weare  v.  take  notice  of  any  adverse  rights  or 

Williams,  85  Iowa  253,  52  N.  W.  Rep.  equities  of  third  persons  which  lie  has 

328  ;    Washburn  y.    Huntington,    78  the  means  of  discovering,  and  as  to 

Cal.  573,  21  Pac.  Rep.  305.  which   he  is  put  on  inquiry.     If  he 

1  50  N.  Y.  345.  See  Parker  v.  Con-  makes  all  the  inquiry  which  due  dili- 
ner,  93  N.  Y.  126.  gence  requires,  and  still  fails  to  dis- 

2  Whitbread  v.  Jordan.  I  Y.  &  C.  cover  the  outstanding  right,  he  is  ex- 
328.  See  Acer  v.  Westcott,  46  N.  Y.  cused  ;  but  if  he  fails  to  use  due  dili- 
384  ;  Cambridge  Valley  Bank  v.  De-  gence,  he  is  chargeable,  as  matter  of 
lano,  48  N.  Y.  340.  Compare,  how-  law,  with  notice  of  the  facts  which 
ever,  Battenhausen  v.  Bullock,  11  111.  the  inquiry  would  have  disclosed." 
App.  665.  Parker  v.  Conner,  93  N.  Y.  124.     See 

3  27  Hun  (N.  Y.)  362.  Acer  v.    Westcott,  46  N.  Y.  384,  and 

4  "The  doctrine  of  constructive  no-  cases  cited, 
tice,"  says  Rapallo,  J.  "  has  been  most 


6y6  stearns  v.  gage.  §  375 

Some  apparent  dissension  has  been  introduced  into  this 
branch  of  the  subject  by  a  dictum  of  Miller,  J.,  in  Stearns 
v.  Gage,1  followed  by  the  New  York  Supreme  Court  in 
Farley  v.  Carpenter,2  and  approved  in  Parker  v.  Con- 
ner,3 and  still  being  applied  in  the  Court  of  Appeals.1 
According  to  the  court's  own  statement  it  could  not  "be 
claimed  that  any  question  as  to  constructive  notice  was 
presented  upon  the  trial"  in  Stearns  v.  Gage,  and  it  seems 
unfortunate  that  the  debatable  sentences  should  have  been 
embodied  in  the  opinion.  The  court  observes  that  "  actual 
notice  is  required  where  a  valuable  consideration  has  been 
paid."  The  statute  relating  to  fraudulent  conveyances '' 
in  New  York  contains  a  provision  that  it  "  shall  not  be 
construed  in  any  manner,  to  affect  or  impair  the  title  of  a 
purchaser  for  a  valuable  consideration,  unless  it  shall 
appear  that  such  purchaser  had  previous  notice  of  the 
fraudulent  intent  of  his  immediate  grantor,  or  of  the 
fraud  rendering  void  the  title  of  such  grantor."  The  court 
says  that  "this  plainly  means  that  actual  notice  shall  be 
given  of  the  fraudulent  intent  or  knowledge  of  circum- 
stances which  are  equivalent  to  such  notice.  Circum- 
stances to  put  the  purchaser  on  inquiry  where  full  value 
has  been  paid  are  not  sufficient?  ....  No  authority  has 
been  cited  which  sustains  the  principle  that  a  purchaser 


1  79  N.  Y.  102.     See  Wilmerding  v.  Rep.  629;  Van  Raalte  v.  Harrington, 

Jarraulowsky,  85  Hun  (N.  Y.)  285,  32  101  Mo.  610   14  S.  W.  Rep.  710  ;  State 

X.  Y.  Supp.   983;  Wilson  v.   Marion.  v.    Merritt,   70   Mo.   275;  Knower    v. 

147  X.  Y.    596.  42  N.    E.    Rep.    190:  Cadden  Clothing  Co.,  57 Conn.  221,  17 

Jacobs  v.  Morrison,  136  N.  Y.  105,  32  Atl.  Rep.  580;  Seavy  v.  Dearborn,  19 

X.  E.   Rep.   552;  Anderson   v.   Blood,  N.  H.   3.r)l  ;  Summons  v.   O^Neill,    60 

152  X.  Y.  285,  46  N.  E.  Rep.  493  ;  King  Mo.  App.  536  ;  Wilson  v.  Marion,  147 

v.    Holland   Trust  Co.,    8  App.   Div.  N.  Y.  596  ;  42  N.  E.  Rep.  190. 

N.  Y.)  117,  40  N.  Y.  Supp.  480.  *Wilson   v.   Mario,..  117  N.  Y.  596, 

-'  27  Hun   (X.  Y.  i   359.     See  23   Alb.  42  X.  E.  Rep.  190  ;  Jacobs  v.  Morrison. 

I..    I.  126.  136  N.  Y.  10.-),  32  X.  Rep.  552. 

93    X.     Y.     118.       See    Lyons    v.  2  R.  S.  N.  Y.  137,  §  5. 

Leahy,  L50re.  8,  11.  13  Pac.  Rep.  643;  "Compare  Anderson  v.  Blood,  152 

State  v.  Mason,  112  Mo.  380,  20  S.  W.  X.  Y.  285,  46  X.  E.  Rep.  493. 


§  375  STEARNS   V.    GAGE.  677 

for  a  valuable  consideration,  without  previous  notice,  is 
chargeable  with  constructive  notice  of  the  fraudulent 
intent  of  his  grantor  ;  and  such  a  rule  would  carry  the 
doctrine  of  constructive  notice  to  an  extent  beyond  any 
principle  which  has  been  sanctioned  by  the  courts  and 
cannot  be  upheld." 

It  must  be  noted  that  the  word  "actual"  is  not  embod- 
ied in  the  statute,  but  has  been,  in  effect,  interpolated 
by  this  construction.  We  dissent  decidedly  from  the 
statement  that  the  statute  <k  plainly  means  that  actual 
notice  shall  be  given  of  the  fraudulent  intent."  Such  a 
construction  violates  the  settled  rule  that  statutes  of  this 
character  shall  be  liberally  construed  for  the  suppression 
of  fraud.1  It  is  to  be  regretted  that  the  utterances  quoted 
occur  in  a  case  in  which  no  facts  sufficient  to  put  a  pur- 
chaser on  inquiry,  or  to  constitute  what  is  often  called 
and  sometimes  miscalled,  constructive  notice  of  fraud, 
were  found  or  were  actually  present.  Had  the  court  been 
confronted  with  such  facts  and  compelled  to  squarely  state 
the  rule  in  the  presence  of  such  facts,  these  remarks, 
which  we  consider  unfortunate,  might  never  have  been 
made.  It  is  idle  to  assail  the  arguments  of  the  case  with 
violent  language,  as  has  more  than  once  been  done,  but 
we  should  rather  view  the  objectionable  sentences  as 
unguarded  utterances,  and  entertain  the  hope  that  the 
questionable  features  of  the  opinion  will  be  limited 
and  distinguished,  and  perhaps  ultimately  overturned. 
"  Knowledge  of  circumstances  which  are  equivalent  to" 
actual  notice  are  regarded  in  the  opinion  as  sufficient  evi- 
dence of  notice.  This  plainly  implies  that  the  court  does 
not  mean  to  require  proof  that,  as  a  matter  of  fact,  the 
purchaser  was  informed  personally  of  the  debtor's  or  ven- 
dor's fraudulent  intention,  but  leaves  open  the  wide  field 
of  circumstances  by  which  actual  notice  may  be  inferred, 

1  See  §  20. 


678  STEARNS   V.    GAGE.  §  376 

implied  and  fastened  upon  him.  In  other  words,  "  cir- 
cumstantial evidence"  will  suffice.1  In  Farley  v.  Carpen- 
ter,2 which  follows  and  adopts  Stearns  v.  Gage,3  the  court 
at  General  Term  says  :  "  A  person  may  be  chargeable  with 
constructive  notice  and  still  have  no  actual  notice.  Fraud 
implies  an  evil  or  illegal  intent.  Such  intent  can  only 
exist  in  case  of  knowledge.  Under  this  statute  fraud  is 
not  a  question  of  negligence,  it  is  a  question  of  knowl- 
edge and  intent  ;  a  party  may  be  negligent  in  not  exam- 
ining the  records  for  liens  and  incumbrances  on  real  estate 
before  effecting  a  purchase,  and  still  be  strictly  honest, 
and  innocent  of  fraud." 

We  deny  that  fraud  necessarily  "implies  an  evil  or 
illegal  intent."  The  transaction  may  be  pure  and  honest 
as  regards  the  debtor's  mental  emotions,  or  his  belief,  or 
when  measured  by  his  standard  of  morality,  and  yet  be 
pronounced  by  the  courts  fraudulent  and  void  in  law. 
Nor  is  fraud  always  "  a  question  of  knowledge  and  intent," 
because,  by  a  fiction  of  law,  knowledge  is  constantly  im- 
puted by  statutes,  and  by  the  courts,  in  cases  where  it 
did  not  in  fact  exist,  and  no  evil  intent  considered  as  a 
mental  emotion  was  present. 

§376.  —  It  seems  startling  if  not  preposterous  to  say 
that  circumstances  which  ought  to  "put  the  purchaser  on 
inquiry"  are  "not  sufficient"  to  taint  a  transaction  with 
fraud,  or  to  warrant  the  conclusion  that  a  vendee  is  not  a 
bona  fide  purchaser.  We  submit  that  this  statement  is 
inaccurate  and  misleading.  The  confusion  undoubtedly 
results  in  part  from  a  failure  to  distinguish  between  cir- 
cumstantial evidence  sufficient  to  establish  or  justify  a 
finding  of  actual  notice  of  fraud  and  facts  which  raise 
the  presumption  of  constructive  notice.4     The  facts   and 


1  Farley  v.  ( larpenter,   27  Hun  (N.  f79  N.  Y.  102 

?.)362.  4  In   Garesche    v.  MacDonald,    103 

»27  Hun  (N.  Y.)  862.  Mo.  10,  15  S.  W.  Rep.  379,  the  court 


§376  STEARNS   V.    GAGE.  679 

circumstances  sufficient  in  either  phase  of  the  question  to 
establish  notice  or  bad  faith  in  the  vendee  bear  a  close 
resemblance,  if  indeed  they  are  not  often  identical  ; 
hence  the  doctrine  of  Stearns  v.  Gage,  if  it  is  effectual  for 
any  purpose,  is  to  be  regarded  as  seriously  impeding,  if 
not  breaking  the  force  of  indicia  and  circumstances  as 
evidence  of  guilty  knowledge.  What  object  is  to  be  sub- 
served in  endeavoring  to  establish  knowledge  or  notice  of 
a  fraudulent  intent  by  proof  of  surrounding  circumstances, 
if  facts  sufficient  to  put  an  honest  man  "on  inquiry" 
count  for  nothing  ?  Are  not  facts  manifestly  sufficient 
to  excite  grave  suspicions  of  good  faith,  at  least  evidence 
tending  to  prove  actual  notice?1  Is  not  a  court  or  jury 
justified  in  finding  actual  notice  from  facts  which  should 
excite  inquiry  or  raise  a  presumption  of  constructive 
notice?  In  short,  is  a  court  or  jury  justified  in  finding, 
as  matter  of  fact,  absence  of  actual  notice  in  cases  where 
facts  sufficient  to  create  a  clear  presumption  of  construc- 
tive notice  are  in  evidence  ?  Can  such  a  verdict  or  finding 
be  said  to  honestly  reflect  the  evidence  ?  It  seems  incred- 
ible that  a  party  whose  suspicions  concerning  the  fairness 
and  good  faith  of  a  transaction  must  have  been  excited 
by  the  exceptional  and  peculiar  conduct  of  the  parties, 
can  preserve  the  character  of  a  bona  fide  purchaser,  either 
by  listless  inattention  and  indifference  concerning  the 
indicia  of  fraud,  or  by  active  and  positive  efforts  to  avoid 
all  knowledge  of  the  true  motive  or  design  of  the  debtor. 


says:  "  While  fraud  may  be  inferred  inquiry   would    have  discovered  the 

when  it  is  a  legitimite  deduction  from  fraud,  but  the  fact  that  he  had  such 

all  the  facts  and  circumstances  in  evi-  knowledge  may  be  given  in  v\  idence 

dence  in  a  given  case,  it  is  never  to  be  and  maybe  considered  by  the  jury, 

presumed. "  with  the  other  facts  and  circumstances 

1  In  Sammons   v.    O'Neill,   60   Mo.  in  the  case,  in  determining  the  ques- 

App.  586,  the  court  says:  "It  is  not  tion    whether   he   really   had   actual 

sufficient    that    he    may    have    had  knowledge  of  the  fraud."    See  H.  T. 

knowledge  of  such  facts  as  would  have  Simon-Gregory    Dry    Goods    Co.    v. 

put  a  prudent  man  on  inquiry,  which  Schooley,  66  Mo.  App.  413. 


68o  STEARNS   V.    GAGE.  §  376 

This  would  be  offering  a  premium  to  vendees  who  mas- 
queraded as  mutes,  or  who  declined  to  use  their  eyes  and 
ears  to  discover  the  fraud,  the  evidence  of  which  sur- 
rounded them  on  every  side.  Is  not  such  a  vendee  guilty 
of  a  "  fraudulent  turning  away  from  knowledge  ?"  Must 
not  a  person  who  willfully  closes  his  eyes  to  avoid  seeing 
what  he  believes  he  would  have  discovered  had  he  kept 
them  open,  be  considered  as  having  perceived  or  detected 
"  what  any  man  with  his  eyes  open  would  have  seen  ? "  1 
Is  a  party  who  has  eyes  to  be  permitted  to  say  that  he 
saw  not,  and  who  has  ears  to  be  permitted  to  say  that  he 
heard  not?  When  the  warning  signal  has  been  sounded, 
and  the  attention  of  a  party  has  been  aroused,  is  it  not 
incumbent  on  such  party  to  stay  his  hand,  until  he  shall 
ascertain  by  the  requisite  inquiries  the  facts  foreshadowed 
by  the  suspicious  circumstances?2  In  Farley  v.  Car- 
penter3 the  purchaser  testified  that  he  thought  some- 
thing was  up  from  the  way  the  debtor  talked  :  "  He  sent 
for  me  ;  he  wanted  to  sell  me  his  farm  ;  I  said,  '  What  is 
up  ? '  he  said,  '  You  need  not  ask  any  questions  nor  say 
anything  for  two  or  three  days.' '  The  court  said  it  did 
"not  necessarily  follow  that  he  should  infer"  that  the 
debtor  "was  designing  to  cheat  and  defraud  his  creditors 
and  flee  from  the  State."  This  case,  it  seems  to  us,  is 
squarely  opposed  to  Baker  v.  Bliss,4  and  can  scarcely  be 
reconciled  with  the  views  of  Rapallo,  J.,  in  a  case  to  be 
presently  noticed,  in  which  he  entertains  "no  doubt  that 
it  is  legitimate  for  the  jury  in  such  cases  to  consider 
whether  the  vendee  had  knowledge  of  facts  pointing  to  a 
fraudulent  intent  or  calculated  to  awaken  suspicion,  and 


1  De  Witt  v.  Van  Sickle,  29  N.  J.  2  Compare    Pinckard    v.    Woods,  8 

Eq.  214.     A  party   "has  no  right  to  Graft.  (Va.)  140. 

shut  his  eyes  or  his  ears  to  the  inlet  of  3  27  Hun  (N.  Y.)  361. 

information,    and   then  say  he  is  a  4  39  N.  Y.  70. 
bona  fide  purchaser  without  notice." 
Burwell  v.  Fauber,  21  Gratt.  (Va.)  463. 


§  376  STEARNS   V.    GAGE.  68 1 

that  actual  notice  of  a  fraudulent  intent  on  the  part  of  tin- 
vendor  need  not  be  established  by  direct  proof.  The  fact  of 
notice  or  knowledge  may  be  inferred  from  circumstances ."  ' 

Let  the  reader  briefly  consider  this  subject  in  its  prac- 
tical application  and  bearing.  A  debtor  contemplating 
flight,  suddenly  offers  to  sell  his  tangible  property  at  a 
sacrifice  for  cash  to  a  vendee  who  sees  in  the  transaction 
the  usual  indicia  surrounding  fraudulent  alienations,  suffi- 
cient to  put  a  purchaser  "on  inquiry."  No  inquiry  is 
made,  the  vendee  takes  title  to  the  debtor's  property,  or 
to  what  is  sometimes  called  the  creditors'  trust  fund,2  and 
provides  the  debtor  with  its  equivalent  in  money,  which 
has  no  earmarks  and  is  easily  secreted  or  dissipated,  and 
the  latter  absconds.  Here  the  vendee  has  actually  facili- 
tated the  consummation  of  the  fraud  by  furnishing  the 
debtor  with  a  portion  of  its  value  in  cash  in  consideration 
of  receiving  the  property  at  a  sacrifice.3  Is  not  the  pur- 
chaser at  least  a  quasi  conspirator  in  such  a  case,  even 
though  the  debtor  did  not  openly  avow  his  fraudulent 
purpose?  Imprudence  or  inattention  to  the  suspicious 
circumstances  may  possibly  be  overlooked,  but  can  will- 
ful blindness  be  pardoned?4 

Again,  suppose  a  deed  is  made  for  full  value  by  A.  to 
B.,  containing  recitals  or  provisions  which  render  it  void- 


1  Parker  v.  Conner,  93  N.  Y.  124  ;  picion  and  led  to  inquiry,  the  pur- 
s.  p.  Carroll  v.  Hayward.  124  Mass.  chaser  is  regarded  as  having  received 
122  ;  Moore  v.  Williamson,  44  N.  J.  Eq.  notice  of  a  fraudulent  intent  and  re- 
504, 15  Atl.  Rep.  587  ;  Bush  v.  Roberts,  quired  to  investigate,  and  on  the  trial 
111  N.  Y.  282,  18  N.  E.  Rep.  732;  to  explain  or  in  some  way  overcome 
Lyons  v.  Leahy,  15  Ore.  8.  13  Pac.  the  effect  of  the  notice  thus  given. 
Rep.  643  ;  Knower  v.  Cadden  Clothing  Purchasers,  under  the  circumstances 
Co.,  57  Conn.  202,  17  Atl.  Rep.  580.  suggested,  cannot  shut  their  eyes  and 

2  See  §  14;  Egery  v.  Johnson,  70  shield  themselves  by  proof  of  the  pay  - 
Me.  261.  ment  of  a  consideration.     They  fur- 

3  Compare  Singer  v.  Jacobs,  11  Fed.  ther  and  perfect  the  wrongful  intent 
Rep.  561  ;  Clements  v.  Moore,  6  Wall,  of  the  debtor  when  they  assist  him  to 
299.  dispose  of  his  property."     Herrlich  v. 

4  "If  the  facts  and  circumstances  Brennan,  11  Hun  (N.  Y.)  195. 
are  such  as  ought  to  have  excited  sus- 


682  ANDERSON   V.    BLOOD.  §  376a 

able  as  to  creditors  provided  A.  is  not  solvent.  In  other 
words,  its  provisions  stamp  it  as  fraudulent  in  law  or  void 
against  creditors  upon  its  face  if  A.  is  insolvent.1  The 
instrument  is  effectual  between  the  parties,2  and  is  good 
against  all  the  world  if  A.  was  solvent  ;  it  is  voidable  as 
matter  of  law  if  A.  was  insolvent.  Do  not  these  recitals 
cast  upon  B.  the  duty  of  investigating  and  inquiring  as 
to  the  solvency  of  A.  ?  If  no  inquiry  is  made,  and,  as 
matter  of  fact  A.  is  insolvent,  do  not  the  recitals  of  the 
instrument  then  constitute  constructive  ?iotice  to  B.  of 
the  fraud  intended  by  A.  ?  The  whole  supposition  of  the 
case  is  that  B.  had  no  actual  knowledge  or  notice  of 
the  intended  fraud. 

It  is  difficult  to  assign  any  reason  why  the  doctrine  of 
constructive  notice,  if  it  has  any  application  to  our  sub- 
ject at  all,  should  not  be  applied  in  a  case  in  which  ade- 
quate consideration  has  been  given.  Where  the  fraudu- 
lent intent  is  present,  proof  of  consideration  will  not 
save  the  transaction  ;  it  is  merely  a  fact,  a  piece  of  evi- 
dence, tending  among  other  things  to  establish  want  of 
notice  ;  but  it  clearly  has  no  such  controlling  or  over- 
shadowing effect,  and  bears  no  such  strong  relation  to 
the  transaction  as  to  justify  the  court  in  disregarding,  as 
the  basis  of  a  finding  of  notice,  proof  of  facts  sufficient 
to  excite  inquiry  or  suspicion,  or  to  constitute  construc- 
tive notice.  Indeed  actual  or  pretended  payment  of  con- 
sideration is  almost  a  necessary  incident  of  a  covinous 
transaction,  and  often  serves  as  a  convenient  cover  for 
fraud. 

§  376a.  Anderson  v.  Blood. —  The  proposition  as  to  what 
constitutes  sufficient  notice  to  a  party  to  deprive  him  of 
the  character  of  a  bona  fide  purchaser  was  re-discussed  by 
Gray,    J.,    in    the    recent    case    of    Anderson    v.    Blood.3 

1  See  ?£  9,  10,  322.  3 152  N.  Y.  285,  293,  4G  N.  E.  Rep. 

*  See  Chap.  XXVI.  493. 


§  376a  ANDERSON   V.    BLOOD.  683 

Evidently  conflicting  opinions  prevailed  in  the  deliber- 
ations of  the  court,  as  three  judges  dissent  from  the 
prevailing  conclusions.  In  the  course  of  the  opinion 
Gray,  J.,  says :  "  The  rule,  as  it  was  early  laid  down  in 
the  case  of  Williamson  v.  Brown,1  has  not  been  departed 
from  in  any  subsequent  case,  of  which  I  am  aware.  That 
was  that,  where  a  purchaser  of  land  has  knowledge  of 
any  facts  sufficient  to  put  him  upon  inquiry  as  to  the  exist- 
ence of  some  right,  or  some  title,  in  conflict  with  that  he 
is  about  to  acquire,  he  is  presumed  either  to  have  made 
the  inquiry  and  ascertained  the  extent  of  such  prior  right, 
or  to  have  been  guilty  of  a  degree  of  negligence  equally 
fatal  to  his  claim  to  be  considered  a  bona  fide  purchaser. 
Many  subsequent  cases  in  this  court  have  rested  upon  the 
rule  in  Williamson  v.  Brown.  But  all  are  to  the  point 
that  a  purchaser  for  a  valuable  consideration  is  entitled  to 
be  protected  in  his  title  and,  in  the  absence  of  actual 
notice  of  fraud,  it  is  necessary  that  the  facts  and  circum- 
stances, relied  upon  to  charge  him  with  knowledge  of  the 
fraud,  should  be  of  a  character  equivalent  to  notice.  If 
the  facts  within  the  knowledge  of  the  purchaser  are  of 
such  a  nature,  as,  in  reason,  to  put  him  upon  inquiry, 
and  to  excite  the  suspicion  of  an  ordinarily  prudent 
person  and  he' [fails  to  make  some  investigation,  he  will 
be  chargeable  with  that  knowledge  which  a  reasonable 
inquiry,  as  suggested  by  the  facts  would  have  revealed.2 
I  will  assume  in  the  present  case,  for  the  purpose  of 
the  discussion,  that  the  beneficiaries  of  this  estate  might 
be  regarded  as  having  such  equitable  interests  in  the 
property  as  to  impose  a  stricter  duty  of  vigilance  in  the 
case  of  an   intending  purchaser,  than  would  be  required 


1  15  N.  Y.  354.  v.   Conner,    93   N.  Y.    118  ;    Bush    v. 

2  See  Le  Neve  v.  Le  Neve.  Amb.  Roberts,  111  N.  Y.  278,  18  N  E.  Rep. 
436,  2  Lead.  Cas.  Eq.  (6th  ed.)  26;  732;  Jacobs  v.  Morrison,  136  N.  Y. 
Williamson  v.  Brown,  15  N.  Y.  354  ;  101,  32  N.  E.  Rep.  552. 

Stearns  v.  Gage,  79  N.  Y.  102  ;  Parker 


684  ANDERSON   V.    BLOOD.  §  376a 

where  the  parties  interested  were  the  general  creditors  of 
the  grantor,  and  with  that  assumption,  which  perhaps  is 
barely  justified  in  this  case,  I  still  am  unable  to  perceive  in 
what  way  Mrs.  Blood  was  chargeable  with  the  neglect 
of  any  duty  of  inquiry  resting  upon  her  by  reason  of  the 

circumstances The  question  is  not  whether  Mrs. 

Blood  could  have  discovered  the  existence  of  any  fraud  by 
an  inquiry;  but  it  is  whether,  acting  as  an  ordinarily  pru- 
dent person  would  have  done,  she  was  called  upon,  under 
the  circumstances,  to  make  inquiry.  Were  the  circum- 
stances such  as  to  necessitate  the  making  of  some  inquiry, 
at  the  peril  of  being  charged  with  the  knowledge  of  some 
then  unperceived  fact?  However  strong  the  circum- 
stances may  have  seemed  to  militate  against  the  good 
faith  of  Hernz  and  Melhado  in  the  transaction,  I  do  not 
think  they  would  have  warranted  Mrs.  Blood  in  then 
declaring  that  some  collusion  existed  to  defraud  the 
beneficiaries  of  the  trust  estate." 

It  will  be  noticed  that  in  this  case  the  court  intimate  a 
distinction  between  a  bona  fide  purchaser  claiming  against 
the  beneficiaries  of  a  trust  estate,  and  parties  who  are 
merely  the  general  creditors  of  the  grantor.  Certainly 
the  tendency  of  this  decision  is  to  establish,  at  least  as 
regards  the  argument  of  the  court  and  the  words 
employed  in  reaching  its  conclusion,  a  result  some- 
what more  favorable  to  creditors  than  the  expressions 
employed  in  Stearns  v.  Gage1  and  Parker  v.  Conner,2 
where  the  duty  of  the  purchaser  to  make  inquiry  in  the 
presence  of  suspicious  facts  and  circumstances  was  in 
effect  denied.3 


1  79  N.  Y.  102.  Statute  of  Limitations   to  bar  him, 

*  93  N.  Y.  118.  Finch,  J.,  said  :  '•  Let  us  suppose  that 

3  In   Higgins  v.  Crouse,  147  N.  Y.  the  injured  party  does  not  know  all  the 

415,  42  N.  E.  Rep.  6,  the  question  arose  facts,  is  not  aware  of  enough  of  them 

as  to  whether  a  party  had  such  knowl-  to   justify    a   decided    inference    of 

edge  of  a  fraud  as  would  cause  the  fraud,    but  does  know   sufficient  to 


377 


CARROLL   V.     IIAYWARD. 


685 


§377-  Carroll  v.  Hayward  —  Actual  belief. — This  question 
of  notice,  as  applied  to  our  subject,  has  frequently  been 
up  for  adjudication  in  Massachusetts.  "  Reasonable 
cause  to  know,"  said  Ames,  J.,  u  is  evidence  having  a  ten- 
dency, and  generally  a  strong  tendency,  to  prove  that  the 
party  in  question  did  know,  but  it  is  a  mistake  to  say 
that  it  is  the  same  thing  as  knowledge.  What  might  con- 
vince one  man  might  be  insufficient  to  satisfy  the  mind 
of  another."1  Thus  in  an  action  for  deceit  by  false  rep- 
resentations the  scienter  must  be  proved  and  found  as 
matter  of  fact,  and  it  is  not  enough  merely  to  prove  that 
the  party  had  reasonable  cause  to  believe  the  representa- 
tion untrue,  and  from  that  infer  scienter  as  a  question 
of  law.2  The  distinction  between  reasonable  cause  to 
believe  and  actual  belief  is  pointed  out  in  Coburn  v. 
Proctor.3 


fairly  arouse  suspicion,  to  create  a 
probability,  to  suggest  the  need  of  an 
inquiry.  Can  a  party  so  situated  omit 
all  investigation,  remain  purposely 
blind,  neglect  the  duty  of  inquiry, 
when  reasonable  and  natural  action 
would  reveal  the  truth  and  disclose 
the  fraud  ?  I  think  not.  In  such  a 
case,  it  seems  to  me,  that  we  are 
bound  to  impute  to  the  party  the 
knowledge  which  he  ought  to  have 
had  and  would  have  had  if  he  had 
done  his  duty,  and  say  for  the  pur- 
poses of  the  Statute  of  Limitations 
that  there  was  in  law  a  discovery  of 
the  facts  which  constitute  the  fraud. 
....  I  think  the  true  rule  is  that, 
where  the  circumstances  are  such  as 
to  suggest  to  a  person  of  ordinary  in- 
telligence the  probability  that  he  has 
been  defrauded,  a  duty  of  inquiry 
arises,  and  if  he  omits  that  inquiry 
when  it  would  have  developed  the 
truth,  and  shuts  his  eyes  to  the  facts 
which  call  for  investigation,  knowl- 


edge of  the  fraud  will  be  imputed  to 
him.*'  The  facts,  however,  in  this 
case  were  held  not  to  bring  it  within 
the  rule  as  stated . 

1  Carroll  v.  Hayward,  127  Mass. 
122  ;  State  v.  Mason,  112  Mo.  380,  20 
S.  W.  Rep.  629.  Compare  Bicknell  v. 
Mellett,  160  Mass.  328,  35  N.  E.  Rep. 
1130. 

2  Pearson  v.  Howe,  1  Allen  (Mass.) 
207;  Tryon  v.  Whitmarsh,  1  Met. 
(Mass.)  1. 

3  15  Gray  (Mass.)  38.  The  statute 
provided  (Laws  Mass.  1856,  chap.  284, 
§  27)  that  preferential  conveyances 
made  to  any  person  who  had  "reason- 
able cause  to  believe  such  debtor  in- 
solvent," might  be  avoided  by  (lie 
assignee.  In  a  suit  brought  to  avoid 
such  a  transfer,  testimony  that  the 
defendants  believed  the  debtor  per- 
fectly solvent  was  declared  incompe- 
tent. It  was  considered  that  the  only 
inquiry  which  under  the  statute  was 
relevant  to  the  issue  was  whether  the 


686 


PARKER   V.    CONNER. 


§378 


v*  378.  Parker  v.  Conner.  —  The  New  York  Court  of 
Appeals  again  reverted  to  this  general  subject  in  Parker  v. 
Conner.1  Baker  v.  Bliss,2  and  Reed  v.  Gannon,3  are  there 
emasculated  so  that  creditors  can  draw  little  aid  or  com- 
fort from  them,  and  Stearns  v.  Gacre4  is  considered  "suffi- 
cient  to  dispose  of  the  present  controversy."  Rapallo,  J., 
one  of  the  ablest  judges  and  clearest  writers  in  the  court, 
said  :  "We  think  that  in  cases  like  the  present,  where  an 
intent  to  defraud  creditors  is  alleged,  the  question  to  be 
submitted  to  the  jury  should  be  whether  the  vendee  did 
in  fact  know  or  believe  that  the  vendor  intended  to 
defraud  his  creditors,  not  whether  he  was  negligent  in 
failing  to  discover  the  fraudulent  intent The  ven- 
dor's title  and  legal  right  of  disposition  are  unquestioned, 
and  the  ground  upon  which  the  transfer  is  impeached  is 
not  any  defect  in  the  chain  of  title,  but  that  the  vendor's 
motive  in  selling  was  to  hinder,  delay  or  defraud  his  own 


defendants  had  reasonable  cause  to 
believe  the  debtor  insolvent  ;  that  is 
whether,  in  view  of  all  the  facts  and 
circumstances  which  were  known  to 
tin-  defendants  concerning  the  busi- 
ness and  pecuniary  condition  of  the 
debtor  in  connection  with  the  time 
and  mode  of  transfer  of  the  property 
taken,  they  as  reasonable  men,  acting 
with  ordinary  prudence,  sagacity  and 
discretion,  had  good  ground  to  believe 
that  the  debtor  was  insolvent.  "  It 
was  not  intended  by  the  statute,"  said 
Bigelovv,  J.,  "to  make  the  actual  be- 
lief of  the  party  concerning  the  sol- 
vi  iicy  of  the  debtor  one  of  the  stan- 
dards by  which  to  test  the  validity  of 
the  transfer  of  property  to  him. 
Such  belief  might  or  might  not  be 
well  founded.  It  would  be  an  uncer- 
tain and  fluctuating  standard.  That 
which  would  satisfy  the  mind  of  one 
mail  would  be  wholly  insufficient  to 
convince  another ;    and    those  facts 


which  would  fall  far  short  of  produc- 
ing a  belief  in  a  person  who  was  dis- 
interested and  impartial  might  have 
a  very  different  effect  upon  the  same 
person  when  acting  under  the  strong 
influence  of  self  interest."  Coburn  v. 
Proctor,  15  Gray  (Mass.)  38. 

1  9:j  N.  Y.  118,  45  Am.  Rep.  178. 
See  especially  the  learned  note  by 
Irving  Browne,  Esq.,  in  which  many 
of  the  cases  here  cited  are  discussed. 
See  29  Alb.  L.  J.  244  ;  Bush  v.  Rob- 
erts,  111  N.  Y.  282,  18  N.  E.  Rep.  732  ; 
Van  Raalte  v.  Harrington,  101  Mo. 
610,  14  S.  W.  Rep.  710  ;  Knower  v. 
Cadden  Clothing  Co.,  57  Conn.  202, 
221,  17  Atl.  Rep.  580 ;  Seavy  v.  Dear- 
born, 19  N.  H.  351  ;  Wilson  v.  Marion, 
147  N.  Y.  596,  42  N.  E.  Rep.  190  ; 
Jacobs  v.  Morrison,  136  N.  Y.  105,  32 
N.  E.  Rep.  552. 

-'  39  N.  Y.  70. 

;:.0  N.  Y.  345. 

479N.  Y.  102. 


§  37'S  PARKER   V.    CONNER.  687 

creditors.  In  such  a  case  there  is  no  duty  of  active 
vigilance  cast  upon  the  purchaser,  for  the  benefit  of 
creditors  of  the  vendor,  which  should  require  him  to  sus- 
pect and  investigate  the  motives  of  the  vendor.  If  he 
knows  or  believes  them  to  be  fraudulent,  he  has  no  right 
to  aid  the  vendor  in  his  fraudulent  scheme,  and  by  so 
doing  he  makes  himself  a  party  to  the  fraud.  But  fraud 
should  not  be  imputed  by  the  application  of  the  strict 
rules  of  constructive  notice  in  such  a  case,  and  actual 
good  faith  should  be  sufficient  to  protect  the  purchaser." 
It  will  thus  be  seen  that  the  dictum  of  Stearns  v.  Gage  is 
adopted  in  a  qualified  sense.  We  respectfully  urge  that 
the  proposed  test,  Did  the  vendee  "  in  fact  knozu  or  believe 
that  the  vendor  intended  to  defraud  his  creditors?"  is 
loose,  uncertain  and  unsatisfactory.  The  court  proceed 
to  state  that  on  general  principles,  independent  of  the 
statute,  the  same  rules  are  applicable  in  such  cases  as 
govern  in  determining  the  bona  fides  of  commercial  paper, 
viz.:  not  whether  the  holder  took  the  bill  or  note  without 
exercising  sufficient  prudence  and  care,  but  whether  it 
came  into  his  hands  under  such  circumstances  as  to  charge 
him  with  receiving  it  mala  fide,  and  that  unless  he  is 
fairly  chargeable  with  notice  of  the  fraud,  even  negligence 
will  not  defeat  his  title.1  There  certainly  is  novelty  in 
the  idea  of  invoking  the  rule  governing  commercial  paper 
for  the  protection  of  the  alienees  of  fraudulent  debtors. 

It  is  foreign  to  our  plan  to  further  trace  this  line  of 
cases.  While  conceding  that  there  is  plausibility  in  the 
reasons  assigned  for  the  non-application  of  the  doctrine 
pure  and  simple  of  constructive  notice  to  fraudulent  trans- 


1  See  this  rule  applied  to  cotnmer-  Branch  Bank  v.  Hoge,  35  N.  Y.  65, 

cial  paper.     Cook  v.  Jadis,  5  Barn.  &  overruling    Pringle    v.     Phillips,     5 

Adol.   909;  Blackhouse  v.   Harrison.  Sandf.  (N.  Y.)  157;  Danforth  v.  Dart, 

5  Barn.   &  Adol.   1098;  Goodman    v.  4  Duer  (N.    Y.)   101.     See  Parker   v. 

Harvey,  4  Adol.  &  El.  870  ;  Magee  v.  Conner,  93  N.  Y.  128. 
Badger,    34    N.     Y.     247;     Belmont 


688  FACTS   TO    EXCITE   INQUIRY.  §  379 

fers,  we  bow  to  some  of  these  decisions  of  the  highest  court 
of  a  great  State  with  hesitation  and  reluctance.  The  great 
embarrassments  under  which  creditors  labor  in  over- 
coming the  presumptions  of  legality  and  good  faith  which 
ordinarily  inhere  in  all  alienations  and  transactions  of 
the  debtor  have  already  been  considered.1  Proof  of 
fraud  is  usually  an  herculean  task,  and  creditors  should 
not  consent  without  a  struggle  to  be  divested  of  so 
important  and  useful  a  factor  in  their  litigations  as  the 
doctrine  of  constructive  notice  of  fraud,  at  least  con- 
sidered as  a  circumstance,  would  be  likely  to  prove. 
Before  further  discussing-  in  the  abstract  what  we  con- 
sider  the  objections  to  the  principles  embodied  in  some  of 
these  cases  we  will  glance  at  the  many  authorities  which 
tend  at  least  to  establish  a  more  favorable  rule  for  the 
creditor  class. 

§  379-  Facts  sufficient  to  excite  inquiry. —  Let  us  notice  the 
cases.  In  Bartles  v.  Gibson,2  Bunn,  J  ,  with  whom 
Harlan,  J.,  of  the  United  States  Supreme  Court  con- 
curred, said:  "  The  defendant  testified  that  he  knew  that 
his  brother  was  in  some  difficulty,  and  that  the  trouble 
was  of  a  financial  character.     Whether  he  knew  all  or  not, 

he   knew  enough   to  put   him   upon  inquiry If  he 

had  knowledge  of  facts  sufficient  to  excite  the  suspicions 
of  a  prudent  man  and  put  him  on  inquiry,  he  made  him- 
self a  party  to  the  fraud?  3     This  is  a  wholesome  and 


1  See§§  5,  6,  7,  8,  244,  271.  Singer  v.  Jacobs,  11   Fed.  Rep.  559  ; 

-'  17Fed.  Rep.  297;  Bedford  v.  Penny,  Hadock  v.  Hill,  75  Tex.  193,  12  S.  W. 

58  Mich.  424,  25  N.  W.  Rep.  381;  Brit-  Rep.   974  ;  Richolson   v.  Freeman,  56 

tain  v.  Crowther,  54  Fed.   Rep.  295  ;  Kan.  464,  43  Pac.  Rep.  772  ;  Jerome  v. 

Redhead  v.  Pratt,  72  Iowa  103,  33  N.W.  Carbonate  Nat.  Bank,  22  Col.  42,  47 

Rep.  382;  Hasie  v.  Connor,  53  Kan.  721,  Pac.  Rep.  215. 

37  Pac.  Rep.  128 ;  Dodd  v.  Gaines.  82  3  Citing  Atwood  v.  Impson,  20  N. 

Tex.    429,   18  S.  \V.  Rep.  618  ;  Martin  J.    Eq.    156  ;  Baker  v.  Bliss,  39  N.  Y. 

v.  Marshall,  54  Kan.  148,  37  Par.  Rep-  70;  Avery    v.    .Johanii,    27    Wis.  251  : 

977  ;  Walker  v.  Collins,  4  U.  S.  App.  Kerr    on    Fraud,      236;     David     v. 

415,  50  Fed.  Rep.  737,  1  C.  C.  A.  642  ;  Birchard,  53  Wis.  492,  10  N.  W.  Rep. 


§379 


FACTS   TO    EXCITE   TNOUIRV. 


689 


refreshing  statement.  Chancellor  Zabriskie,  after  ob- 
serving that  if  the  object  of  a  debtor  in  making  an 
alienation  is  to  hinder  and  delay  any  of  his  creditors,  the 
transaction  may  be  avoided,  if  made  to  any  one  having 
knowledge  of  the  intent,  continues  :  "  This  knowledge 
need  not  be  by  actual  positive  information  or  notice,  but 
will  be  inferred  from  the  knowledge  by  the  purchaser  of 
facts  and  circumstances  sufficient  to  raise  such  suspicions 
as  to  put  him  upon  inquiry."1  In  Singer  v.  Jacobs,2  the 
court  adopt  the  summary  of  Mr.  Bigelow,3  as  follows  :  ''  If 
facts  are  brought  to  the  knowledge  of  a  party  which 
would  put  him  as  a  man  of  common  sagacity  upon 
inquiry,  he  is  bound  to  inquire,4  and  if  he  neglects  to  do 
so,  he   will  be  chargeable  with  notice  of  what  he  might 


557.  See  Zimmerman  v.  Heinrichs, 
43  Iowa  260  ;  Coolidge  v.  Heneky,  11 
Ore.  327,  8  Pac.  Rep.  281.  In  William- 
son v.  Brown,  15  N.  Y.  362,  an  im- 
portant and  leading  case,  Selden,  J., 
lays  down  the  rule  that  "where  a 
purchaser  has  knowledge  of  any  fact 
sufficient  to  put  him  on  inquiry  as  to 
the  existence  of  some  right  or  title  in 
conflict  witli  that  he  is  about  to  pur- 
chase, he  is  presumed  either  to  have 
made  the  inquiry  and  ascertained  the 
extent  of  such  prior  right,  or  to  have 
been  guilty  of  a  degree  of  negligence 
equally  fatal  to  his  claim  to  be  con- 
sidered as  a  bona  fide  purchaser." 
See  Hinde  v.  Vattier,  1  McLean  110  ; 
Nantz  v.  McPherson,  7  Mon.  (Ky. ) 
599  ;  Cotton  v.  Hart,  1  A.  K.  Marsh. 
(Ky.)  56  ;  Hawley  v.  Cramer,  4  Cow. 
(N  .Y.)718  ;  Morrow  Shoe  Mfg.  Co.  v. 
New  England  Shoe  Co.,  6  C.  C.  A.  508, 
57  Fed.  Rep.  693  ;  Dyer  v.  Taylor,  50 
Ark.  320,  7  S.  W.  Rep.  258.  Knowl- 
edge that  the  debtor  is  selling  goods 
below  cost  is  not  notice  of  fraud  to  a 
vendee.  Hinds  v.  Keith,  57  Fed. 
Rep.  10.  But  guilty  knowledge  of  an 
agent  may  be  imputed  to  his  prin- 

44 


cipal.  Morris  v.  Lindauer,  54  Fed. 
Rep.  23. 

1  Atwood  v.  Impson,  20  N.  J.  Eq. 
156.  See  De  Witt  v.  Van  Sickle,  29 
N.  J.  Eq.  214;  Magniac  v.  Thompson. 
7  Pet.  393  :  Millholland  v.  Tiffany,  4 
East.  Rep.  214  ;  The  Holladay  Case, 
27  Fed.  Rep.  830  ;  Clements  v.  Moore, 
6  Wall.  312 ;  Kitch  v.  St.  Louis  K. 
C.  &  N.  Ry.  Co..  69  Mo.  224  :  Gollober 
v.  Martin,  33  Kan.  255,  6  Pac.  Rep. 
267  ;  Walker  v.  Collins,  1  C.  C.  A. 
642,  4  U.  S.  App.  415,  50  Fed.  Rep. 
737  ;  Haskett  v.  Auhl,  3  Kan.  App. 
744,  45  Pac.  Rep.  608  ;  Richolson  v. 
Freeman,  56  Kan.  463,  43  Pac.  Rep. 
772  ;  Hooser  v.  Hunt,  65  Wis.  71,  26 
N.  W.  Rep.  442.  Where  the  vendee 
stated  that  there  were  no  claims 
against  him,  the  mere  fact  that  the 
purchaser  knew  that  there  was  a  small 
claim  is  not  enough  to  put  such  pur- 
chaser on  inquiry.  B.  C.  Evans  Co. 
v.  Reeves,  6  Tex.  Civ.  App.  254,  26  S. 
W.  Rep.  219. 

*11  Fed.  Rep.  361. 

3  Bigelow  on  Frauds,  pp.  288-9. 

••Compare  Cowling  v.  Estes,  15, 
111.  App.  260. 


69O  FACTS   TO    EXCITE    INQUIRY.  §379 

have  learned  upon  examination.1  ....  If,  however,  there 
be  no  fraudulent  turning  away  from  knowledge  which  the 
res  gestce  would  suggest  to  a  prudent  mind  ;  if  mere  want 
of  caution,  as  distinguished  from  fraudulent  or  willful 
blindness,  is  all  that  can  be  imputed  to  a  purchaser  of 
property,  the  doctrine  of  constructive  notice  will  not  apply 
to  him."  In  Wilson  v.  Prewit,2  a  suit  brought  to  annul 
an  ante-nuptial  settlement,  Woods,  J.,  said :  "  Actual 
knowledge  of  the  fraudulent  intent  is  not  necessary.  A 
knowledge  of  facts  sufficient  to  excite  the  suspicions  of  a 
prudent  man  or  woman,  and  to  put  him  or  her  on  inquiry, 
amounts  to  notice,  and  is  equivalent  to  actual  knowledge 
in  contemplation  of  law.3  It  has  even  been  held  that  the 
means  of  knowledge,  by  the  use  of  ordinary  diligence, 
amounts  to  notice."4  The  judgment  in  this  case  was 
reversed,5  but  upon  the  very  excellent  ground  that  the 
knowledge  of  the  facts  which  the  wife  possessed  "  rather 
dispelled  than  created  any  suspicion  that  the  husband  had 
a  design  to  defraud  his  creditors."  In  Shauer  v.  Alter- 
ton,6  the  court  says  :  ''While  the  plaintiff  was  not  bound 
to  act  upon  mere  suspicion  as  to  the  intent  with  which 
his  brother  made  the  sale  in  question,  if  he  had  knowl- 
edge or  actual  notice  of  circumstances  sufficient  to  put 
him,  as  a   prudent   man,  upon   inquiry  as    to  whether  his 


1  See  Walker  v.  Collins,  4  U.S.  App.  80  Cal.  421,  22  Pac.  Rep.   290;  Dyer 

415,  50  Fed.  Rep.  737,  1  C.  C.  A.  642  ;  v.  Taylor.  50  Ark.  314,  7  S.   W.    Hep. 

Shauer  v.  Alterton,  151  U.  S.  607,  622,  258;    Rugan  v.  Sabin,  53  Bed.   Rep. 

14  S.  C.  Rep.  442.  415  :  Bland  v.   Fleeraan,  58  Ark.  84, 

*?,  Woods  641.  23  S.  W.  Rep.  4  :    Percy  v.  Cockrill, 

3  Citing  At  wood  v.  Impson,  20  N.  53  Fed.  Rep.  872  ;  De  Mares  v.  Gilpin, 

J.  Eq.  150;  Tantumv.  Green,  20  N.  J.  15  Col.  84,  24  Pac  Rep.  568;  Norria 

Eq.  364;  Jackson   v.  Mather,  7  Cow.  v.    Haggin,    13(5  U.   S.   380,  10  S.  C. 

(X.     V.,    301;    Smith    v.    Henry,    2  Rep.  942. 

Bailey's   (S.   C.)   Law   lis:    Mills  v.         4  Citing  Farmers'  Bank  v.  Douglass, 

Howeth,  l'.nVx.  257.      Sec  also   Blum  1!)  Miss.  469. 

v.  Simpson.  71  Tex.  628,  9  S.   \V.   Rep.  1'ivwit  v.   Wilson.  103  U.  S.  22. 

662;  Nicholson  v.  Condon,  71  Md.  621,         '  151  r.  s.  621,  14  S.  C.  Rep.  442. 
is  Atl.   Rep.  B12  :  Godfrey  v.  Miller, 


§  38°  FACTS   TO    EXCITE    ENQUIRY.  6<jl 

brother  intended  to  delay  or  defraud  his  creditors,  and  he 
omitted  to  make  such  inquiry  with  reasonable  diligence, 
he  should  have  been  deemed  to  have  notice  of  such  fact, 
and,  therefore,  such  notice  as  would  invalidate  the  sale  to 
him."  This  utterance  certainly  puts  the  Supreme  Court 
in  line  with  our  contention.  In  Kansas  the  court  says  : 
"  If  the  facts  brought  to  his  attention  are  such  as  to 
awaken  suspicion,  and  lead  a  man  of  ordinary  prudence 
to  make  inquiry,  he  is  chargeable  with  notice  of  the 
fraudulent  intent,  and  with  participation  in  the  fraud."1 
In  Bush  v.  Roberts,2  Gray,  J.,  observed:  "The  action 
could  only  prevail  by  proof"  that  the  purchaser  "had 
actual  notice  of  a  fraudulent  motive"  on  the  part  of  the 
seller  "  or  knowledge  of  circumstances  which  was  equiva- 
lent to  such  notice.  If  he  knew,  or  had  believed  the 
motives  of  his  vendor  to  be  fraudulent,  then,  by  aiding 
him  in  his  scheme,  he  made  himself  a  party  to  the  fraud.3 
But  no  evidence  is  competent  proof  to  affect  him,  or  his 
right  to  the  possession  of  his  property,  which  falls  short 
of  proving  the  nature  of  the  transaction,  and  of  illustra- 
ting the  guilty  participation  of  the  vendee." 

In  some  of  the  States  the  doctrine  of  the  cases  is  that 
knowledge  of  the  existence  of  suspicious  circumstances  is 
merely  evidence  from  which  actual  knowledge  of  fraudu- 
lent designs  may  be  inferred  by  the  jury.4 

§380. —  Swayne,  J.,  in  delivering  the  opinion  of  the 
United  States  Supreme  Court,  said  :  "  A  sale  may  be  void 
for  bad  faith,  though  the  buyer  pays  the  full  value  of  the 
property  bought.  This  is  the  consequence  where  his  pur- 
pose is  to  aid  the  seller  in  perpetrating  a  fraud  upon  his 


1  Gollober  v.  Martin,   33  Kan.  255.  W.  Rep.  629  ;  State  v.  Purcell.  131  Mo. 

1  111  N.  Y.  282,  18  N.  E.  Rep.  732.  312;  Van  Raalte  v.  Harrington,   101 

3  Citing  Parker  v.    Conner,    93  N.  Mo.  602,  14  S.  W.  Rep.  710.  See  also 
Y.  118.  Knower  v.  Cadden  Clothing  Co.,  57 

4  State  v.  Mason,  112  Mo.  374,  20  S.  Conn.  202,  17  Atl.  Rep.  580. 


692  FACTS    TO    EXCITE    INQUIRY.  §380 

creditors,  and  where  he  buys  recklessly  with  guilty  knowl- 
edge." ]  In  a  controversy  in  Alabama2  it  is  said  that 
"  participation  by  the  grantee  may  be  proved  by  any  cir- 
cumstances sufficient  to  charge  his  conscience  with  knowl- 
edee  or  notice  of  the  fraudulent  designs  of  the  orrantor.": 
In  a  Maryland  case  this  language  occurs  :  "  All  that  was 
necessary  to  make  him  take  subject  to  the  fraud  was  suffi- 
cient knowledge  of  the  suspicious  circumstances  to  put 
him  on  inquiry."  4  In  David  v.  Birchard,5  where  a  mort- 
gage was  attacked,  the  court  says  that  "  this  knowledge 
need  not  be  actual  positive  information  or  notice,  but  may 
be  inferred  from  the  knowledge  of  the  mortgagee  of  facts 
and  circumstances  sufficient  to  raise  such  suspicions  as 
should  put  him  on  inquiry."  In  De  Witt  v.  Van  Sickle6 
the  court  observed  :  "A  person  who  deals  in  the  avails  of 
a  scheme  to  defraud  creditors,  to  keep  what  he  gets,  must 
not  only  pay  for  it,  but  he  must  be  innocent  ot  any  pur- 
pose to  further  the  fraud,  even  to  protect  himself.  Actual 
notice  need  not  be  shown.  If  the  purchaser  has  before 
him,  at  the  time  of  his  purchase,  facts  and  circumstances 
from  which  a  fraudulent  intent,  either  past  or  present,  on 
the  part  of  the  vendor,  is  a  natural  and  legal  inference,  or 
such  facts  or  circumstances  of  suspicion  as  would  naturally 
prompt  a  prudent  mind  to  further  inquiry  and  examina- 


1  Clements  v.   Moore,    6  Wall.  312.  facts  and  surrounding  circumstances, 

Compare  Howe  Machine  Co.  v.  Clay-  pregnant  with  inference  and  provoca- 

bourn,  G  Fed.  Rep.  442.  tive  of  inquiry,  is  as  potent  to  impart 

-  Hoyt  &  Bros.  Manuf.  Co.  v.  Tur-  notice  as  a  public  proclamation  or  an 

ner,  84  Ala.  528,  4So.  Rep.  058.  army  with  banners.    Conn.  Mut.  Life, 

See   Hooser  v.  Hunt,  65  Wis.   71.  Ins.  Co.  v.  Smith,  117  Mo.  292,   22  S. 

79,   26  N.  W.    Rep.  442,  declining  to  W.  Rep.  623. 

follow  Steam  v.  Gage,  79  X.  V.  102,  *  Biddinger  v.  Wiland,  67  Md.  362, 

and  Parker   v.   Conner,  93  N.  Y.  118.  10  Atl.  Rep.  202. 

Ii  is  said  in  a  Missouri  case  that  courts  5  53  Wis.   495,  10  N.  W.  Rep.   557. 

of  equity,  since  their  earliest  founda-  See   Millholand    v.    Tiffany,   4    Hast. 

tion,  bave  always  recognized  the  fact  Rep.  214  ;  Green  v.  Early,  39  Md.  225  ; 

that- the  still  small  voice  of  suggestion,  Thompson  v.  Duff,  19  III.  A.pp.  78. 

emanating  as  ii  will  from  contiguous  '  29  N..I.  Eq.  215. 


§  380  FACTS   TO    EXCITE   INQUIRY.  693 

tion,  which,  if  pursued,  would  lead  necessarily  to  a  dis- 
covery of  the  corrupting  facts,  he  is  chargeable  with 
notice."  !  In  Prewit  v.  Wilson  2  the  court  observed  that  the 
grantee  to  lose  the  benefit  of  the  transfer  "  must  be  charge- 
able with  knowledge  of  the  intention  of  the  grantor,"  not 
that  explicit  and  direct  proof  of  actual  knowledge  must 
be  adduced.  In  Hopkins  v.  Langton,3  Chief-Justice 
Dixon  said  :  "  Knowledge  by  the  vendee  of  the  fraudu- 
lent intent,  or  the  existence  within  his  knowledge  of 
other  facts  and  circumstances  naturally  and  justly  calcu- 
lated to  awaken  suspicion  of  it  in  the  mind  of  a  man  of 
ordinary  care  and  prudence,  thus  making  it  his  duty  to 
pause  and  inquire,  and  a  wrong  on  his  part  not  to  do  so, 
before  consummating  the  purchase,  is  essential  in  order 

to  charge  the  vendee The  vendee  cannot  shut  his 

eyes,  but  must  look  about  him  and  inquire."4  "What- 
ever is  notice  enough  to  excite  attention  and  put  the 
party  on  his  guard,  and  call  for  inquiry,  is  also  notice  of 
everything  to  which  it  is  afterwards  found  that  such 
inquiry  might  have  led.5  When  a  person  has  sufficient 
information  to  lead  him  to  a  fact,  he  shall  be  deemed 
conversant  with  it."  G  There  must  be  some  reason  to 
awaken  inquiry  and  direct  diligence  in  the  channel  in 
which  it  would  be  successful.      That  is  what  is  meant  by 


1  Citing  Tantum  v.  Green,  21  N.J.  short  of  this   would   be  sufficient  to 
Eq.  364.  charge  them  ivith  knoxvledge."     The 

2  103  U.  S.  24.  court  above  said  :  "  A  proposition  so 

3  30  Wis.  381 .  wide  from  the  true  rule  of  law  gov- 
.  4  In  this  same  case  the  court  had  erning  in  such  case  requires  no  argu- 
instructed  the  jury  that  in  order  to  ment  to  elucidate  its  error."  Hopkins 
affect  the  parties  with  notice  of  a  v.  Langton,  30  Wis.  382,  383. 
fraudulent  intent,  so  as  to  avoid  8  See  Staauer  v.  Alterton,  151  U.  S. 
the  sale,   they  must  have  "had  be-  607,  622,  14  S.  C.  Rep.  442. 

fore    them,'"   at  the   time   the   goods  6  Kennedy  v.   Green,  3  Myl.  &  K. 

were  purchased,  "  good  and  substan-  719;  adopted  in  Wood  v.  Carpenter, 

tial  evidence  of  it,  such  as  sends  con-  101  U.  S.  141  ;  Shauer  v.  Alterton,  151 

viction  home  to  the  mind  and'  estab-  U.  S.  607,  622,  14  S.  C.  Rep.  442. 
lishes  a  well-founded  belief ;  nothing 


694  FACTS    TO    EXCITE    INQUIRY.  §  38 1 

reasonable  diligence.1  "  The  presumption  is  that  if  the 
party  affected  by  any  fraudulent  transaction  or  manage- 
ment might,  with  ordinary  care  and  attention,  have  sea- 
sonably detected   it,  he  seasonably  had  actual  knowledge 

OI    It.      " 

^381. —  "Means  of  knowledge  are  the  same  thing  in 
effect  as  knowledge  itself," 3  and  "  are  equivalent  to 
actual  knowledge,"  4  is  the  language  employed  in  some 
of  the  cases.  As  applied  to  our  subject  at  least,  it  is 
conceded  that  these  statements  are  inaccurate,  for  guilty 
knowledge  would  of  course  defeat  the  purchaser's  title, 
while  the  means  of  knowledge  would  not  have  that  effect 
unless  the  duty  to  inquire  was  cast  upon  him.  Again, 
while  a  preference  would  not  be  avoided  under  the  late 
bankrupt  act,  by  reason  of  a  mere  suspicion  of  the  debtor's 
insolvency  in  the  mind  of  the  creditor,  yet  knowledge  of 
facts  calculated  to  produce  such  a  belief  in  the  mind  of 
an  ordinarily  intelligent  man  would   avoid  the  security.5 

It  may  be  urged  that  some  of  the  citations  given  are 
from  cases  in  other  branches  of  the  law  than  that  govern- 
ing fraudulent  transfers.  This  may  be  true  as  to  a  few 
of  the  citations,  but  the  mass  of  the  authorities  collated 
directly  involved  the  question  of  notice  of  a  fraud  in  an 
alienation  made  to  defeat  creditors.  It  is  submitted  that 
in    no   department   of  the  law  is  there  greater  need  for 


1  Maule  v.  Rider,  59  Pa.  St.  171.  Tin  Co.,  7  Sawyer  418;  New  Albany 
See  Wilson  v.  Hunter,  30  Ind.  472  ;  v.  Burke,  11  Wall.  107;  Broderick's 
Cambridge  Valley  Bank  v.  Delano,  48  Will,  21  Wall.  518,  519;  Ashhursfa 
N.  Y.  336,  339,  340.  Appeal,  00  Pa.  St.  290  ;  Wood  v.  Car- 

2  Angell  on  Limitations,  §  187,  and  penter,  101  U.  S.  141. 

note.  5  Grant  v.  National  Bank,  97  U.  S. 

Wood    v.    Carpenter,    101     U.    S.  82 ;  Barbour  v.  Priest,  103  U.  S.  297. 

L35,    143.     See    Kurtz    v.    Miller,   26  See  Stucky  v.  Masonic  Sav.  Bank,  108 

Kan.  319  ;  Lady  Washington  Consol.  U.  S.  75  ;  Swan  v.   Robinson,  5  Fed. 

Co.    v.   Wood,   113  Cal.  487,  45  Pac.  Rep.  294;   Reber  v.  Gundy,  13  Fed. 

Rep.  809.  Rep.  56;  May  v.  Le  Claire,  18  Fed.  Rep. 

4  Dannmeyer  v.  Coleman,  8  Sawyer  164. 
51 ,  58.     Citing  Mannng  v.  San  Jacinto 


§  3§2  ACTUAL    BELIEF.  695 

increased  facilities  to  detect  and  unearth  fraud  than  in 
that  regulating  covinous  alienations,  and  therefore  the 
cases  illustrating  other  branches  of  the  law  are  not  irrele- 
vant. Clearly  the  dictum  of  Miller,  J.,  already  quoted, 
that  "circumstances  to  put  the  purchaser  on  inquiry 
where  full  value  has  been  paid  are  not  sufficient"  notice 
of  fraud,  cannot  be  supported  or  recognized  as  against 
this  multitude  of  authorities. 

If  the  creditor  is  to  be  divested  of  the  benefits  of  the 
doctrine  of  constructive  notice  in  and  by  itself,  or  as  a 
circumstance,  as  some  of  the  cases  cited  seem  to  indi- 
cate, then  we  contend  that  facts  sufficient  to  excite 
inquiry  or  to  put  a  prudent  man  upon  his  guard  should 
raise  a  presumption  of  guilty  knowledge  or  constitute 
prima  facie  proof  of  actual  notice  of  the  fraudulent 
design  or  of  participation  therein,  which,  in  the  absence 
of  satisfactory  explanation,  should  be  conclusive.  Con- 
structive notice  in  this  connection  may  be  likened  to  the 
rule  still  prevailing  in  some  States  to  the  effect  that  a 
failure  to  effect  a  change  of  possession  on  a  sale  of  per- 
sonalty is  conclusively  presumed  to  be  fraudulent  as  to 
creditors.  The  doctrine  which  we  advance  is  akin  to  the 
common  and  generally  prevalent  doctrine  that  continued 
possession  on  the  part  of  the  vendor  is  prima  facie 
fraudulent,  that  is,  it  raises  a  presumption  which  may  be 
explained  or  rebutted.1 

§382.  Actual  belief.  —  There  is  another  view  already  out- 
lined in  part  to  be  taken  of  this  question.  In  New  York 
fraud,  in  cases  of  alienations  to  defeat  creditors,  is 
"  deemed  a  question  of  fact  and  not  of  law."  2  In  Coleman 
v.  Burr,3  the  claim  was  made  that  there  was  no  finding 
by  the  referee  of  a  fraudulent  intent  ;  but  that,  on  the 
contrary,   he  had  found  the  whole  transaction   to  be  fair 


1  See  Chap.  XVII.  3  93  N.  Y.  31. 

*  2  N.  Y.  R.  S.  137,  §  4. 


696  ACTUAL   BELIEF.  §  382 

and  honest.  The  court,  however,  observed  that  as  the 
referee  has  "found  facts  from  which  the  inference  of 
fraud  is  inevitable,  and  although  he  has  characterized  the 
transactions  as  honest  and  fair,  that  does  not  make  them 
innocent  nor  change  their  essential  character  in  the  eye 
of  the  law."  The  assignor  "  must  be  deemed  to  have 
intended  the  natural  and  inevitable  consequences  of  his 
acts,  and  that  was  to  hinder,  delay,  and  defraud  his  cred- 
itors." There  is  nothing  novel  or  unusual  in  this  case. 
The  principle  it  enforces  is  founded  in  public  policy,  and 
is  very  frequently  applied.1  It  will  be  seen  at  a  glance 
that  under  this  rule  a  fraudulent  intention  can  be  conclu- 
sively fastened  upon  the  debtor  when  no  such  wrongful 
motive  was  present  in  his  mind,  and  he  was  as  free  from 
the  design  to  defraud  as  our  first  parents  were  of  knowl- 
edge of  sin  before  tasting  the  forbidden  fruit.  From  the 
necessity  of  the  case  the  substituted  fraudulent  intent 
prevails,  because  experience,  from  which  the  rule  springs, 
has  shown  that  transactions,  where  this  presumption 
obtains,  hinder  and  defraud  creditors  in  enforcing  pay- 
ment of  their  claims.  The  difficulty  of  proving,  other 
than  by  circumstantial  evidence,  that  a  vendee  had  actual 
knowledge  of  the  vendor's  fraud,  or  participated  therein, 
is  manifest.'2  The  law  labels  certain  facts  and  combina- 
tions of  circumstances  as  being  sufficient  to  excite  inquiry 
and  suspicion  on  the  part  of  a  purchaser,  and  supplements 
this  by  asserting  that  in  certain  cases,  means  of  knowl- 
edge are  the  same  thing  as  knowledge  itself.3  The  prin- 
ciple of  imputing  a  fraudulent  intent  to  an  innocent 
debtor  is  frequently  invoked.  Is  there  any  legal  absurd- 
ity or  moral  wrong  in  imputing  it  to  a  vendee  ?  Do  not 
the    necessities   of    the    case    often    demand    it?4     It    is 


1  See  §§  8,  9.  Wood  v.  Carpenter,  101  U.  S.  135, 

:,,c,  143. 

*  See  g§9,  10. 


§§  383>  384  PURCHASER    WITH    NOTICE.  697 

respectfully  contended  that  the  test,  "  whether  the  ven- 
dee did  in  fact  know  or  believe  that  the  vendor  intended 
to  defraud  his  creditors,"  !  would  furnish  a  very  uncertain 
and  fluctuating-  standard,  and  would  not  in  fact  constitute 
a  general  rule  of  any  utility.  The  intellectual  and  moral 
perceptions  are  stronger  or  weaker  in  different  men, 
according  to  their  natures  and  education,  and  a  man  mor- 
ally obtuse  might  look  upon  a  transaction  as  honest  which 
to  the  average  person  would  appear  to  be  manifestly 
unfair  or  fraudulent.  We  have  seen  that  a  man  may 
commit  a  fraud  without  believing  it  to  be  a  fraud.2 

§383.  Purchaser  with  notice.  —  It  is  manifest  that  one 
purchasing  of  the  fraudulent  grantee,  with  notice  of  the 
prior  fraud,  takes  the  title  subject  to  all  the  infirmities 
with  which  it  was  affected  in  the  hands  of  his  grantor. 
To  hold  otherwise  would  be  equivalent  to  saying  that 
three  conspiring  together  might  accomplish  a  fraud  which 
would  be  impossible  to  two.3  Purchasers  pendente  lite 
are  bound  by  the  result  of  the  litigation.4 

§  384.  Purchaser  with  notice  from  bona  fide  purchaser.  — 
It  is  a  well-settled  rule  in  equity  that  a  purchaser  with 
notice  himself  from  a  bona  fide  purchaser  for  a  valuable 
consideration,  who  bought  without  notice,  may  protect 
himself  under  the  first  purchaser.5  The  only  exception 
to  this  rule  is  where  the  estate  becomes  revested  in  the 
original  party  to  the  fraud,  in  which  case  the  original 
equity  will  re-attach  to  it   in    his    hands/'     A  volunteer 


1  Parker   v.  Conner,  93  N.  Y.   118,  v.  Church,  25  Pa.  St.  278.     See  Oliver 
126.  v.    Piatt,    3    How.    401  ;  Johnson   v. 

2  See  g  8.  Gibson.  116  111.  294,  6  N.  E.  Rep.  205. 

3  Wilcoxen  v.  Morgan,  2  Col.  478.  In  Ryan  v.  Staples,  40  U.  S.  App.  749, 

4  Tilton   v.   Cofield,    9?>   U.    S.    108;  the    court    says:     "One    who     buys 
Allen  v.  Halliday,  28  Fed.  Hep.  263.  property  from  an  innocent  bona  Jide 

3  Allison  v.   Hagan,    12   New  55,   2  purchaser   is   protected  by  the  good 

Fonb.  Eq.  149,  1  Story's  Eq.  Jur.  409.  faith  and  innocence  of  his  grantor, 

6  1   Story's  Eq.  Jur.  §  410  ;  Church  although  he  may  himself  have  notice 


698  FRAUDULENT  GRANTEE  AS  TRUSTEE.     §§  384a,  385 

with  notice,  who  derives  his  title  from  a  bona  fide  pur- 
chaser for  value  without  notice,  is  unaffected  by  the  fraud- 
ulent character  of  the  original  transaction.  This  is  neces- 
sarily the  case ;  otherwise  the  party  holding  the  perfect 
title  might  be  unable  to  dispose  of  it,  and  its  value  would 
be  greatly  impaired.  The  party  purchasing  with  notice 
recovers  in  the  riorht  of  his  vendor.1 

£  384a.  Possession  as  notice.  —  Naturally  where  persons 
are  in  actual  occupation  of  real  estate  as  a  home  a  person 
proposing  to  purchase  is  bound  to  make  inquiry  as  to  the 
title  of  the  possessors. a 

S  385.  Fraudulent  grantee  as  trustee. —  Elliott,  J.,  observed 
in  a  recent  case  in  the  Supreme  Court  of  Indiana,  that 
"where  property  is  fraudulently  conveyed,  the  grantee 
holds  it  as  trustee  for  the  creditors  of  the  grantor."3  In 
Blair  v.  Smith  4  the  court  said  :  "  Mrs.  Smith  received  the 
money  as  trustee,  and  as  such  must  account  for  it.  If  she 
had  received  a  stock  of  goods  from  her  husband  pursuant 
to  a  corrupt  scheme  to  defraud  his  creditors,  she  certainly 
could  have  been  charged  as  trustee.  The  fact  that  she 
received  one  species  of  property  rather  than  another  can 
make  no  difference.  The  governing  principle  is  the  same, 
no  matter  what  kind  of  property  the  fraudulent  participant 
in  the  positive  wrong  receives.  Mr.  Pomeroy  asserts, 
what  is  well-known  to  be  the  law,  that  a  fraudulent  grantee 


of  antecedent  defects  or  equities  that  -  Kirby  v.  Talhnadge,  160  U.  S.  879, 

would    have  defeated  his  title   if   he  16  S.  C.  Rep.  349;  Landes  v.   Brant, 

bad   been   the  first  purchaser.     Trull  10  How  348,  375;  McLean  v.  Clapp, 

v.  Bigelow,  16  Mass.  406:  Glidden  v.  141  U.  S.  429,  436,  12  S.  ('.  Rep.  39; 

Hunt,     24    Pick.    (Mass.)    221,     225;  Noyes  v.  Hall,  97  U.  S.  34 

Boynton  v.  Rees,  8  Pick.  (Mass.)  329  ;  •  Buck    v.    Voreis,     89    Ind.    117, 

Funkhouser    v.     Lay,     78    Mo.    465;  Blair  v.  Smith.  1 14   Ind.  125,  15  N.  E. 

\V I  v.  Cbapin,  13  N.  Y.  509."  Rep.  817:  Chamberlain  v.  O'Brien,  46 

See  Pulton  v.  Woodman,  54  Miss.  .Minn,  so,  is  N.  W.  Rep.  447. 

L58;  Goshorn  v.  Snodgraes,  17  W.  Va.  'ill   Ind.    114,  125,  15  N.  E.  Rep. 

717.  817. 


§  386  TITLE    FROM    FRAUDULENT    VENDEE. 

takes  as  trustee,  and  says:  'The  lien  upon  the  original 
articles  will  extend  to  the  resulting  fund  or  the  substituted 
goods.'"  ! 

§386.  Title  from  fraudulent  vendee.—  It  was  at  one  time 
sought  to  establish  the  rule,  at  least  in  some  of  the  author- 
ities, that  a  bona  fide  purchaser  from  a  fraudulent  grantee 
was  not  entitled  to  protection  against  the  claims  of  the 
creditors  of  the  fraudulent  grantor.2  The  argument  in  sup- 
port of  this  docrine  was  to  the  effect  that  by  the  very  terms 
of  the  statute  against  fraudulent  transfers,  the  conveyance 
was  pronounced  utterly  void,  frustrate  and  of  no  effect, 
and  consequently  a  subsequent  conveyance  from  the  fraud- 
ulent grantee  could  have  no  foundation  on  which  to  rest. 
So  also  it  was  contended  that  it  was  against  the  policy  of 
the  statute  to  afford  protection  to  a  subsequent  purchaser 
from  the  fraudulent  grantee,  though  he  parted  with  value, 
in  ignorance  of  any  infirmity  in  the  title  he  wasacquiring. 
Quoting  the  words  of  Chancellor  Kent :  "  Though  the 
debtor  himself  may  fraudulently,  on  his  own  part,  convey 
to  a  bona  fide  purchaser,  for  a  valuable  consideration,  yet 
his  fraudulent  grantee  cannot ;  for  it  is  understood  that  the 
proviso  in  the  13  Eliz.  does  not  extend  to  such  subsequent 
conveyance.  The  policy  of  that  act  would  be  defeated  by 
such  extension.  Its  object  was  to  secure  creditors  from 
being  defrauded  by  the  debtor  ;  and  the  danger  was,  not 
that  he  would  honestly  sell  for  a  fair  price,  but  that  he 
would  fraudulently  convey,  upon  a  secret  trust  between 
him  and  the  grantee,  at  the  expense  of  the  creditors.  If 
the  debtor  sells,  himself,  in  a  case  where  the  creditor  has 
no  lien,  and  sells  for  a  valuable  consideration,  he  acquires 


1  Citing  Pomeroy's  Eq.  Jur.,  vol.  3,  Rembert,  63  Ala.  570.  A  judgment- 
§1291.  creditor  of  a  fraudulent  grantee  is  not 

2  Roberts  v.  Anderson,  3  Johns.  Cb.  a  purchaser  within  the  meaning  of 
(N.  Y. )  371  ;  Preston  v.  Crofut,  1  the  statute.  Couse  v.  Columbia  Pow- 
Conn.  527,  note  ;  Hoke  v.  Henderson,  der  Mfg.  Co.  (N.  J.  Ch.),  33  Atl.  Rep. 
3  Dev.  (N.    C.)   Law   12  ;  Thames  v.  299 ;  Devoe  v.  Brandt,  53  N.  Y.  463. 


700  FRAUDULENT   GRANTEE.  §  387 

means  to  discharge  his  debts  ;  and  it  may  be  presumed  he 
will  so  apply  them.  If  his  fraudulent  grantee  be  enabled 
to  sell,  the  grantor  cannot  call  those  proceeds  out  of  his 
hands,  and  the  grantee  can  either  appropriate  them  to  his 
own  use,  or  to  the  secret  trusts  upon  which  the  frandulent 
conveyance  was  made.  There  is  more  danger  of  abuse, 
and  that  the  object  of  the  statute  would  be  defeated,  in 
the  one  case  than  in  the  other."  1  The  decree  of  Chan- 
cellor Kent  was  reversed  on  error; 2  and  it  was  dissented 
from  and  the  contrary  doctrine  held  by  Judge  Story,  in 
Bean  v.  Smith,3  and  now  in  nearly  if  not  all  the  States, 
the  doctrine  is  settled,  that  a  fraudulent  conveyance  will 
not,  at  the  instance  of  the  creditors,  be  vacated  to  the 
prejudice  of  an  innocent  purchaser  from  the  fraudulent 
grantee.4  Of  course  one  who  purchases  from  a  fraud- 
ulent a-rantee,  with  notice  of  the  fraud  and  of  the  inval- 
idity  of  his  title,  can  acquire  no  better  right  than  the 
fraudulent  grantee  has.5 

§  387.  Creditors  of  fraudulent  grantee. —  In  Susong  v.  Wil- 
liams °  the  court  held  that  where  a  conveyance  was  made 
by  a  mother  to  her  son  upon  a  secret  trust,  to  reconvey 
to  the  grantor  when  peace  should  be  re-established,  the 
motive  of  the  grantor  in  making  the  conveyance  being 
fear  of  confiscation,  the  convevance  was  valid  between  the 
parties,  and  the  reconveyance,  being  without  considera- 
tion, was   void  as  to  the   creditors  of  the  son.      This  is 


1  Roberts  v.  Anderson,  3  Johns.  Ch.  12     Am.     Rep.     603 ;     Gordon       v. 

(N.  Y.)  371,  378.  Ritenour,    87   Mo.    61.     It  is  held  in 

*  Anderson    v.    Roberts,    18  Johns.  Michigan   that   the   burden  to  prove 

(N.  Y.)  515.  good  faith  and  payment  of  consider- 

3  2  Mason  252  ;  Sawyer  v.  Almand,  ation   rests   on    the    purchaser    from 
89  Ga.  314,  15  S  E.  Rep.  315.  the  fraudulent  grantee.     Schaible  v. 

4  Sec  note  to  Basset  v.  Nosworthy,  Ardner,  98  Mich.  TO,  ."iO  N.  W.  Rep. 
2  Lea.  Cas.  in  Eq.   (4th  Am.  Ed.)  42;  1105. 

Schaible  v.  Ardner,  98  Mich.  73.56N.  5 Spence  v.  Smith,  34  W.  Va.  706, 

W.  Rep.  L105;  Sawyer  \.  Almand,  89  12  S.  E.  Rep.   828;  Goshorn's  Ex'r  v. 

Ga.   314,   1".  S.   E.     Rep.  315;  4  Kent  Snodgrass,  17  W.  Va.  717. 

I'M  :   Young    v.  Lathrop,  07  N.  C.  63,  cl  Heisk.  (Tenn.)  625. 


§  388  FRAUDULENT  GRANTEE.  ;<>[ 

based  upon  the  principle  that  the  grantor,  by  making  this 
conveyance  to  her  son,  valid  and  effectual  on  its  face,  and 
permitting  it  to  be  recorded,  thereby  held  her  son  out  to 
the  world  as  the  owner  of  the  property  whereby  he  was 
enabled  to  obtain  credit.  The  principles  of  this  case 
would  seem  to  render  it  unsafe  for  any  owner  of  property 
to  allow  the  title  of  it  for  any  cause  to  rest  in  another 
person.  Certainly  it  behooves  the  fraudulent  debtor  to 
exercise  care  and  good  judgment  in  selecting  a  vendee 
who  not  only  will  consummate  the  secret  trust,  but  who 
will  not  be  frustrated  in  so  doing  by  his  own  creditors. 
This  doctrine  of  apparent  ownership  may  be  variously 
illustrated.  In  Budd  v.  Atkinson  J  it  appeared  that  a 
father  bought  a  farm  and  caused  it  to  be  conveyed  to  his 
son  by  a  deed  which  was  recorded.  The  son  entered  into 
possession  of  the  property  and  lived  upon  it.  Subse- 
quently he  contracted  debts  on  the  credit  of  his  ownership 
of  the  farm.  Then  at  his  father's  request  he  conveyed 
the  property  to  the  father,  without  consideration,  and 
upon  the  ground  that  the  latter  had  never  intended  to 
give  the  farm  to  him,  and  that  the  son  was  not  aware  that 
the  conveyance  had  been  made  to  him.  The  court  held 
that  the  deed  to  the  father  was  fraudulent  as  against  the 
son's  creditors.2  Where,  however,  a  fraudulent  mort- 
gagee reconveys  the  land  to  the  fraudulent  mortgagor, 
before  any  lien  attaches  in  favor  of  the  creditors  of  the 
former,  they  cannot  subject  the  land  to  the  payment  of 
their  debts.3  In  Springfield  Homestead  Association  v. 
Roll 4  it  was   held   that  where  a  erantor  jn   a  fraudulent 


1  30  N.  J.  Eq.  530  of    the    vendor    who    have  come  in 

2  Where  a  fund  arising  from  prop-  (although  after  the  creditors  of  the 
erty  fraudulently  assigned  has  been  fraudulent  vendee)  are  fully  paid, 
brought  into  court  at  the  instance  of  Mullanphy  Sav.  Bank  v.  Lyle,  T  Lea 
creditors   of  the   vendor,  creditors  of  (Tenn.)  431. 

the  fraudulent  vendee    will    not   be  3  Powell    v.  I  vey,  88  N.  C.  256.    See 

permitted  to  have  satisfaction  of  their  §  398. 

-laims  out  of  it  until  all  the  creditors  4  137  111.  205,  27  N.  E.  Rep.  184. 


7<D2  FRAUDULENT   GRANTEES.  §§  388-3893 

conveyance,  which  was  duly  recorded  remained  in  open 
possession  and  received  a  reconveyance  from  the  fraudu- 
lent grantee,  which  was  not  recorded,  a  subsequent  mort- 
gagee of  the  fraudulent  grantee  will  be  deemed  to  have  had 
notice  of  the  title  of  the  original  grantor,  arising  out 
of  his  possession,  and  the  mortgage  will  be  declared  void 
at  the  instance  of  such  grantor. 

^  388.  Liability  between  fraudulent  grantees.— I  n  Riddle  v. 
Lewis 1  the  court  decided  that  fraudulent  grantees,  as 
between  themselves,  incur  no  responsibility  to  one  another 
by  permitting  the  grantor  to  have  or  dispose  of  any  part 
of  the  property  conveyed. 

vj  389.  Fraudulent  grantee  sharing  in  recovery. —  Where  a 
fraudulent  scheme  or  purchase,  under  which  a  creditor 
obtained  property  of  an  insolvent  debtor,  is  set  aside  in 
a  suit  brought  by  another  creditor  against  the  fraudulent 
vendee,  the  latter  will  not  be  allowed  to  share  with  the 
complainant  in  the  proceeds  of  the  property.2  But,  as 
we  have  shown,  where  an  illegal  preference  is  set  aside, 
the  creditor  who  attempted  to  secure  such  preference  is 
not  necessarily  thereby  debarred  from  participating  in  a 
distribution  of  the  debtor's  property  under  a  voluntary 
assignment  act,  including  the  property  thus  illegally  con- 
veyed to  him.3 

§  389a.  Purchaser  pendente  lite. —  Purchasers  pendente 
lite  are  chargeable  with  notice  4  of  all  the  facts  of  which 
the  record  of  the  suit  would  inform  them.  This  rule 
relates  only  to  parties  to  the  suit,  and  does  not  apply  to 
other  separate  suits  or  parties.5 

1  7  Bush  (Ky.)  193.  3  White  v.    Cotzhausen,    129  U.  S. 

•  Smith  v.  Craft,  11  Biss.  351  :    Wil-  329.  9  S.  C.  Rep.  309. 

son  v.  Horr,  15  Iowa  493.     See  Riggs  4See  Tilton    v.  Cofield.    93   U.    S. 

v.  Murray,  2  Johns.  Ch.  (N.  Y.)  582;  168;  Allen  v.    Halliday,  28  Fed.  Rep. 

Murray  v.  Riggs,   r>  Johns.   (N.  Y.)  263. 

5T1;     Harris    v.     Summer,    2    Pick.  h  Stout  v.  Phillippi   Mfg.  &  M.  Co.. 

(Mass.)  129.  41  W.  Va.  339,  26  S.  E.  Rep.  571. 


CHAPTER    XXV. 


PREFERENCES. 


^  390.     Preferences  legal. 

391.  Must  represent  actual  debt. 
391a.  Preference  on  the  eve  of  a  gen- 
eral assignment. 

392.  Vigilant  creditors. 

392a.  Preferences    in  New  York  for 
wages. 


§  393.  Compromises — Secret  preferen- 
tial agreements. 

393a.  Illegal  composition  preference. 

394.  Secret  antecedent  agreement  to 
prefer. 

394a.  Rights  of  attaching  creditor. 


,"  Equity  delights  in  equality." 

§  390.  Preferences  legal.  —  In  the  absence  of  a  bankrupt 
act,  the  principle  prevails  in  most  of  the  States  that  an 
insolvent  debtor  may  make  preferences1  among  his 
creditors,"    even*  to    the    extent    of    transferrino-    all    his 


1  The  debtor  cannot  delegate  the 
power  to  make  preferences.  Seger's 
Sons  v.  Thomas  Bros.,  107  Mo.  643, 
18  S.  W .  Rep.  33  ;  Barnum  v.  Hemp- 
stead, 7  Paige  (N.  Y.)  568. 

2  Smith  v.  Craft,  11  Biss.  347  :  Swift 
v.  Hart,  35  Hun  (N.  Y. )  130,  citing  this 
section;  Sweetser  v.  Smith,  22  Abb.  N. 
C.  (N.  Y.)  320  and  note,  5  N.  Y.  Supp. 
378;  Leavittv.  Blatchford,  17N.Y.537; 
Wan-en  v.  Jones,  68  Ala.  449  ;  Craw- 
ford v.  Kirksey,  55  Ala.  282  Shealy 
v.  Edwards,  75  Ala.  418  ;  Bishop  v. 
Stebbins,  41  Hun  (N.  Y)  246  ;  Osgood 
v.  Thome,  63  N.  H.  375  ;  Low  v. 
Wortman,  44  N.  J.  Eq.  202,  7  Atl. 
Rep.  654,  14  Id.  586;  Walden  v. 
Murdock,  23  Cal.  550;  Giddings 
v.  Sears,  115  Mass.  505  ;  Ferguson  v. 
Spear,  65  Me.  279  ;  French  v.  Motley, 
63  Me.  328  ;  Forrester  v.  Moore,  77 
Mo.  651  ;  Gomez  v.  Hagaman,  84 Hun 
(N.  Y.)  148,  32  N.  Y.  Supp.  453  :  Cut- 


ter v.  Pollock,  4  N.  Dak.  205,  59  N. 
W.  Rep.  1062  ;  Drury  v.  Wilson,  4 
App.  Div.  (N.  Y.)  232,  38  N.  Y.  Supp. 
538  ;  Sweet  v.  Scherber,  42  111.  App. 
237  ;  Jewell  v.  Knight,  123  U.  S.  426, 
434,  8  S.  C.  Rep.  193  ;  People's  Sav- 
ings Bank  v.  Bates,  120  U.  S.  556,  7S. 
C.  Rep.  679;  Huntley  v.  Kingman, 
152  U.  S.  532,  14  S.  C.  Rep.  688  ;  Saw- 
yer v.  Levy,  162  Mass.  190,  38  N.  E. 
Rep.  365  ;  Warner  Glove  Co.  v.  Jen- 
nings, 58  Conn.  74,  19  Atl.  Rep.  239  ; 
Hasie  v.  Connor,  53  Kans.  713,  37  Pac. 
Rep.  128  ;  Vietor  v.  Levy,  72  Hun  (N. 
Y.)  263.  25  N.  Y.  Supp.  644,  aff'd  148 
N.  Y.  739,  42  N.  E.  Rep.  726  ; 
Schroeder  v.  Bobbitt,  108  Mo.  289,  18 
S.  W.  Rep.  1093  :  Alberger  v.  Na- 
tional Bank  of  Commerce,  123  Mo. 
313,  27  S.  W.  Rep.  657  :  Hoffman  v. 
Susemibl,  15  App.  Div.  (N.  Y.)  405  ; 
Warner  v.  Littleheld,  89  Mich.  329,  50 
N.  W.  Rep.   721 ;  Talcott  v.  Harder, 


704 


PREFERENCES    J.ECAE 


§390 


property  to  one  creditor  to  the  exclusion  of  the  others  1 
The  common  law  favors  and  rewards  the  vigilant  and 
active  creditor.  The  right  of  a  debtor  under  the  rules  of  the 
common  law  to  devote  his  whole  estate  to  the  satisfaction 
of  the  claims  of  particular  creditors,  by  confession  of 
judgment  or  otherwise,3  results  as  Chief-Justice  Marshall 
declares,  "from  that  absolute  ownership  which  every  man 
claims    over  that  which  is  his   own."3     If,  while   a  man 


11!)  N.  Y.  536,  23  N.  E.  Rep.  1056: 
Glover  v.  Lee,  140  111  102,  29  N.  E. 
Rep.  680  ;  Clark  v.  Krause,  2  Mackey 
(D.  C.)567;  Richardson  v.  Marqueze, 
59  Miss.  80  ;  Eldridge  v.  Phillipson,  58 
Miss.  270  ;  Jewett  v.  Note  ware,  30 
Hun  (N.  Y.)  194  ;  Totten  v.  Brady.  54 
Md.  170;  Preusser  v.  Henshaw.  49 
Iowa  41  ;  Atlantic  Nat.  Bank  v.  Tav- 
ener,  130  Mass.  407  ;  Savage  v.  Dowd, 
54  Miss.  728:  Shelley  v.  Boothe,  73 
Mo.  74  ;  Spaulding  v.  Strang,  37  N.  Y. 
135  ;  Auburn  Exchange  Bank  v.  Fitch, 
48  Barb.  (N.  Y.)  344;  Allen  v.  Ken- 
nedy, 49  Wis.  549,  5  N.  W.  Rep.  906  ; 
Keen  v.  Kleckner,  42  Pa.  St.  529  ; 
Jordan  v.  White,  38  Mich.  253  ;  Mur- 
phy v.  Briggs,  89  N.  Y.  451  ;  Hill 
v.  Bowman,  35  Mich.  191;  Smith  v. 
Skeary,  17  Conn.  47;  Frazer  v. 
Thatcher,  49  Tex.  26;  Holbird  v.  An- 
derson, 5  T.  R.  235  ;  Estwick  v.  Cail- 
laud,  5  T.  R  420  ;  Goss  v.  Neale,  5 
Moore  19.  By  statute  in  New  York  a 
preference  is  prohibited  except  as  re- 
gards wages  and  salaries  of  em- 
ployees, beyond  one-third  of  the  as- 
signed estate,  and  if  that  amount  is 
exceeded,  the  penalty  is  not  the  anni- 
hilation of  the  assignment,  but  the  re- 
duction of  the  preference  to  the  pre- 
scribed limit;  Maass  v.  Falk,  14<i  N. 
Y.  40,  40  N.  E.  Rep.  504;  Central 
Nat.  Bk.  v.  Seligman,  138  N.  V.  485, 
::i  N.  E.  Rep.  196,  or  as  to  the  excess, 
Cutter  v.  Hume,  62  Hun  (N.  Y.)  622, 
17  X.    Y.   Supp.   255.     The    law  toler- 


ates preferences.  Burr  v.  Clement,  9 
Col.  1,  9  Pac.  Rep.  633.  A  copartner- 
ship may  create  preferences.  Rich- 
ards v.  Leveille.  44  Neb.  38,  62  N.  W. 
Rep.  304  :  Deitrich  v.  Hutchinson,  20 
Neb.  52,  29.  N.  W.  Rep.  247. 

1  Richardson  v.  Marqueze,  59  Miss. 
80;  Drake  v.  Paulhamus,  29  U.  S. 
App.  522. 

Purpose  of  bankrupt  act. — The  great 
object  of  the  late  Bankrupt  Act,  so 
far  as  creditors'  were  concerned,  was 
to  secure  equality  of  distribution  of 
the  bankrupt's  property  among  them. 
It  set  aside  transactions  had  within 
four  or  six  months  prior  to  the  bank- 
ruptcy, depending  upon  their  char- 
acter, defeating  or  tending  to  defeat 
such  distribution.  See  Mayer  v. 
Hellman,  91  U.  S.  .101.  The  fact  that 
an  insolvent  debtor  after  the  com- 
mencement of  bankruptcy  proceed- 
ings against  him,  conveyed  property 
by  way  of  preference  in  violation  of 
the  bankrupt  act,  is  not  under  the 
state  law  evidence  of  fraud.  Talcott 
v.  Harder,  119  N.  Y.  536,  23  N.  E. 
Rep.  1056. 

-  Victor  v.  Levy,  72  Hun  (N.  Y.)  263, 
25  N.  Y.  Supp  644;  afiTd  148  N.  Y. 
738,  42  N.  E.  Rep.  726. 

:i  Brashear  v.  West,  7  Pet.  608.  614  ; 
Reed  v.  Mclntyre,  98  U.  S.  510; 
Mayer  \ .  Hellman,  91  IT.  S.  500  ;  Camp- 
bell v.  Colorado  Coal  &  Iron  Co.,  9 
Col.  65,  10  Pac.  Rep.  248;  Citizens' 
Bank   v.    Williams,   128  N.  Y.  77,  28 


§39°  PREFERENCES    LEGAL.  yo$ 

retains  his  property  in  his  own  hands,  the  right  of  giving 
preferences  should  be  denied,  he  would  so  far  lose  the 
dominion  over  his  own  that  he  could  not  pay  anybody, 
because  whoever  he  paid  would  receive  a  preference.1  It 
makes  no  difference  that  the  creditor  and  debtor  both 
knew  that  the  effect  of  the  application  of  the  insolvent's 
estate  to  the  satisfaction  of  the  particular  claim  would  be 
to  deprive  other  creditors  of  the  power  to  reach  the 
debtor's  property  by  legal  process  or  enforce  satisfaction 
of  their  claims.2  If  there  is  no  secret  trust  agreed  upon  or 
understood  between  the  debtor  and  creditor  in  favor  of 
the  former,  but  the  sole  object  of  a  transfer  of  property  is 
to  pay  or  secure  the  payment  of  a  debt,  the  transaction  is 
a  valid  one  at  common  law.3  It  is  no  evidence  of  fraud 
that  a  debtor  against  whom  bankruptcy  proceedings  were 
pending  made  a  preferential  transfer  of  property.4  The 
distinction  is  between  a  transfer  of  property  made  solely 
by  way  of  preference  of  one  creditor  over  others,  which  is 
legal,  and  a  similar  transfer  made  with  a  design  to  secure 
some  benefit  or  advantage  from  it  to  the  debtor.5  It  is 
an  absurdity  to  say  that  a  conveyance  of  property  which 


N.  E.  Rep.  33;  Tompkins  v.   Hunter,  of  fraud?"     Cited   in  Bamberger  v. 

149   N.  Y.    117,    43  N.    E    Rep.    532;  Schoolfield,    160   U.  S.    160,   16  S.  C. 

Robinson  Notion  Co.  v.  Foot,  42  Neb.  Rep.  225. 

156,  60  N.  W.  Rep.  316.  3  In  Smith  v.  Craft.  123  U.  S.  436,  8 

1  Tillou  v.  Britton,  9  N.  J.  Law  120,  S.  C.  Rep.  196,  it  was  held  that  a  bill 
cited  in  Campbell  v.  Colorado  Coal  &  of  sale  of  a  stock  of  goods  in  a  shop, 
Iron  Co..  9  Col.  65,  10  Pac.  Rep.  248.  by  way  of  preference  of  a  bona  fide 

2  Wood  v.  Dixie,  7  Q.  B.  892.  In  creditor,  was  not  rendered  fraudulent 
Hodges  v.  Coleman,  76  Ala.  103,  119,  against  other  creditors  as  matter  of 
the  court  says  :  "  What  injury  can  law  by  containing  a  stipulation  that 
such  secret  motive  do  to  a  non-pre-  the  purchaser  should  employ  the 
ferred  creditor?  The  act,  as  we  have  debtor  at  a  reasonable  salary  to  wind 
seen,  is  lawful.     Can  human  tribunals  up  the  business. 

set  aside  a  transaction,  lawful  in  itself,  4  Talcott  v.  Harder.  119  N.  Y.  536, 

because  the  actors  had  an  evil  mind  23  N.  E.  Rep.  1056. 

in  doing  it  ?     Can  there  be   fraud  in  5  Banfield    v.    Whipple.     14     Allen 

doing  a  lawful  act,  even  though  it  be  (Mass.)    13;    Giddings   v.    Sears,    115 

prompted  by  an  evil  motive  or  badges  Mass.  507. 

45 


706  PREFERENCES   LEGAL.  §  39O 

pays  one  creditor  a  just  debt  and  nothing  more,  is  fraudu- 
lent as  against  other  creditors  of  the  common  debtor.1 
"  The  mere  preference  in  payment  of  one  honest  cred- 
itor over  another  was  never  at  common  law  evidence  of 
a  fraudulent  intent."2  In  a  fair  race  for  preference  if  a 
creditor  by  diligence  secures  an  advantage,  it  may  be 
maintained  ;  but  if  his  purpose  is  not  to  collect  the  claim, 
but  to  help  the  debtor  cover  up  his  property,  he  cannot  shield 
himself  by  showing  that  his  debt  was  bona  fide?  Rela- 
tionship will  not  take  away  the  right  to  make  a  preference. 
We  may  here  observe  that  an  insolvent  debtor  may  prefer 
his  daughters  to  the  extent  that  they  are  his  creditors  as 
his  wards,  although  such  preference  may  leave  the  debtor 
without  the  means  of  paying  his  other  debts.4  The  same 
rule  applies  to  a  wife,5  and  between  father  and  son,6  and 
daughter.7  In  a  controversy  recently  before  the  Supreme 
Court  of  the  United  States,8  construing  the  statute  of 
Illinois,  it  was  decided  that  a  preferential  disposition  of 
all  the  assets  of  an  insolvent  debtor  operated  as  a  general 
assignment.  The  decree  appealed  from  entirely  excluded 
the  preferred  creditors  from  participating  in  the  fund. 
In  modifying  this  decree  Mr.  Justice  Harlan  said  :  "The 
mother,  sisters,  and  brother  of  Alexander  White,  Jr.,  were 
his  creditors,  and,  so  far  as  the  record  discloses,  they  only 
sought  to  obtain  a  preference  over  other  creditors.  But 
their  attempt  to  obtain  such  illegal  preference  ought   not 


1  Auburn  Exchange  Bank  v.  Fitch,  v.  Croco,  46  Kan.    629,   26  Pac.  Rep. 

48  Bail)    (  X.  Y  )  354.  942  ;  Rockford  Boot  &  Shoe  Mfg.  Co. 

!  Abegg  v.   Bishop,  142  N.  Y.  289,  v.  Mastin,  75  Iowa  112,  39  N.  W.  Rep. 

36  N.  E.  Rep.  1058.  21!). 

Smith  v.  Schwed,  9  Fed.  Rep.  483.  '  Rockland  Co.  v.  Summerville,  139 

See  David   v.   Birchard,  53   Wis.  494,  Ind.  09.,  39  N.   E.  Rep.  307:  Ban- v. 

1<»  N.  W.  Rep.  557  :  Menton  v.  Adams,  Church,  82  Wis.  382,  52  N.  W.  Rep. 

49Cal.  620.  591. 

1  Mirun   v.  National  Bank,  104  U.  S.  :  Nelson    v.    Kinney,    93  Trim.   428, 

543.  25  S.  W.  Rep.  100. 

Laird    v.    Davidson,    124   Ind.   412.  8  White    v.   Cotzhausen,    129  U.   S. 

25  N.  E.  Rep.  7  .  Winfield  Nat.  Bank  345,  9  S.  C.  Rep.  309. 


§§39I»39Ia  ACTUAL  DEBT.  JOJ 

to  have  the  effect  of  depriving  them  of  their  interest 
under  the  statute,  in  the  proceeds  of  the  property  in 
question,  or  justify  a  decree  giving  a  prior  right  to  the 
appellee.  It  was  not  intended,  by  the  statute,  to  give 
priority  of  right  to  the  creditors  who  are  not  preferred. 
All  that  the  appellee  can  claim  is  to  participate  in  such 
proceeds  upon  terms  of  equality  with  other  creditors."  A 
preference  will  not  be  overturned  because  the  creditor  on 
receiving  payment  illegally  promises  as  a  part  of  the 
transaction  to  compound  a  felony  of  which  the  debtor  is 
guilty.1 

sj  391.  Must  represent  actual  debt.  —  The  preferred  cred- 
itor must  have  a  valid  subsisting-  claim  against  the  debtor 
which  the  transfer  was  given  to  satisfy  or  secure.  In 
Union  National  Bank  v.  Warner2  the  conveyance  was 
made  by  a  father  to  his  sons,  who  were,  however,  not 
creditors.  The  mutual  fraudulent  intent  being  shown,  the 
conveyance  was  annulled,  their  agreement  to  pay  some  of 
his  debts  being  deemed  a  part  of  the  fraudulent  scheme 
which  fell  with  it.  So  in  Davis  v.  Leopold,3  the  con- 
veyance by  a  husband  through  a  third  person  to  his  wife 
was  set  aside,  the  wife  not  being  a  creditor;4  while  in 
Crowninshield  v.  Kittridge 5  a  mortgage  was  annulled 
because  it  was  given  for  a  fictitious  or  excessive  amount, 
and  executed  for  the  double  purpose  of  securing  a  bona 
fide  debt  and  preventing  creditors  from  attaching  the 
property.  This  does  not  contradict  the  general  rule  that 
debtors  may  prefer  the  genuine  claims  of  relatives.6 

§  391a.  Preferences  on  the  eve  of  a  general  assignment. — 
The  fact  that  a  preference  is  given  on  the  eve  of  making 


1  Traders'  Nat.  Bank  v.  Steere,  165         4  Compare  Jewett  v.  Noteware,  30 
Mass.  393,  43  N.  E.  Rep.  187.  Hun  (N.  Y.)  194. 

3  12  Hun  (N.  Y.)  306.  6  7  Met.  (Mass.)  522. 

B  87  N.  Y.  620.  6  Rockland  Co.  v.  Summerville,  139 

Ind.  700,  39  N.  E.  Rep.  307. 


708  VIGILANT   CREDITORS.  §  392 

a  general  assignment,  as  already  shown,  does  not  render  it 
fraudulent.1  In  New  York,  where  preferences  in  excess 
of  a  certain  proportion  of  the  assets  are  prohibited  in 
general  assignments, ~  it  has  been  held  that  where,  shortly 
before  the  assignment  was  executed,  assets  in  excess  of 
such  proportions  have  been  transferred  to  a  bona  fide 
creditor,  who  was  ignorant  of  the  intention  to  make  an 
assignment,  the  transfer  would  be  upheld.3  It  would  be 
different  if  the  assignee  knew  of  such  intention.4 

§392.  Vigilant  creditors- — The  general  rule  in  equity 
only  requires  that  the  fund  acquired  by  a  creditor's  pro- 
ceeding should  be  distributed  among  the  creditors  pro 
rata?  And  where  a  creditor  has  not  obtained  any  lien 
at  law,  not  having  obtained  any  judgment,  he  is  not  enti- 
tled to  a  priority  over  the  other  creditors.6  The  com- 
mencement of  a  creditor's  suit  in  chancery  by  a  judgment- 
creditor,  with  execution  returned  unsatisfied,  gives  him  a 
lien  upon  all  the  equitable  assets  of  the  debtor,7  and  the 
same  general  rule  is  applied  to  supplementary  proceed- 
ings.8 An  equitable  lis  pendens  is  acquired  by  filing  the 
bill.9  The  first  party  to  move  is  rewarded  as  a  vigilant 
creditor,  the  commencement  of  his  suit  being  regarded  as 
an   actual   levy  upon   the  equitable  assets  of   his  debtor,10 


1  Dalton  v.  Stiles,   74  Mich.  726,  42  89  Va.   755.  17  S.   E.   Rep.  229.     Ex- 

N.  W.  Rep.  169.  amine  Freedman's  Savings  &   Trust 

*Ch.  503,  Laws  of  1887.  Co.   v.  Earle,   110  U.  S.  710,4  S.   C. 

3  Manning  v.  Beck.  129  N.  Y.  1,  29  Rep.  226  ;  Safford  v.  Douglass,  4  Edw. 

N.  E.  Rep.  90  ;  Maass  v.  Falk.  146  N.  Ch.  (N.  Y.)  538;  Boynton  v.  Rawson, 

Y.  34,  in  X.  E.  Rep.  504.  1  Clarke  Ch.    (N.   Y.)  592;  Hone  v. 

*  Berger   v.  Varrelmann,   127  N.  Y.  Henriquez,    13    Wend.    (N.    Y.)  244: 

286,  27  N.  E.  Hep.  1065.  Voorhees  v.    Seymour.  26   Barb.   (N. 

'■>  Robinson  v.  Stewart,  10  X.  Y.  196.  Y.)  580. 

6  Ibid.  8  Edmondston  v.  McLoud,  16  N.  Y. 

■storm   v.   Waddell,  2  Sandf.   Ch.  544.     See  §  61. 

(N.  Y.)  494  ;  Brown  v.  Nichols.  42  N.  9  Rothschild  v.  Kohn,93  Ky.  107.  19 

Y.  26  ;  Werborn  v.  Kahn.  93  Ala.  201,  S.  W.  Rep  180. 

9  So.  Rep.  729:  Wallace  v.  Treakle,  "  Lynch  v.  Johnson,   48  N.   Y.  33; 

27Gratt.  (Va.)  479  ;  Davis  v.  Bonney,  The  Deposit  Nat.  Bank  v.  Wickham, 


§  392  VIGILANT   CREDITORS.  709 

and  entitles  him  to  a  priority,1  unless  he  elects  to  bring 
the  action  for  the  benefit  of  himself  and  others  similarly 
situated.2  A  purchaser  pendente  lite  with  notice,  will 
take  subject  to  the  rights  of  the  complainant.3  "  The 
vigilant  creditor,  pursuing  his  claim,  acquires  a  preferable 
equity,  which  attaches  and  becomes  a  specific  lien  by  the 
filing  of  his  bill."4  But  it  has  been  held  in  other  cases 
that  all  creditors  who  make  reasonable  and  appropriate 
application  will  be  let  in,5  and  that  all  creditors  should 
be  permitted  to  participate  upon  due  application  in  the 
proceeds  of  property  fraudulently  conveyed.0  This  pref- 
erential right  is  said  in  some  cases  to  be  as  well  defined 
and  as  exclusive  of  the  claims  of  other  creditors  as  is  the 
right  secured  by  a  judgment  lien  upon  the  debtor's  prop- 
erty,7 but  the  cases  are  not  uniform.  Where  a  party 
purchased  lands  pending  a  suit  to  reach  the  judgment- 
debtor's  interest  therein,  and  entered  into  possession  and 
made  improvements,  such  a  grantee  is  not  entitled  to 
have  his  improvements  discharged  from  the  lien  of  the 
decree  rendered  against  the  lands.8  Equity  will  not 
relieve  a  party  from  a  risk  which  he  voluntarily  assumes. 


44  How.  Pr.   (N.  Y.)  422  ;  Roberts  v.  4  Burt  v.   Keyes,  1  Flippin  72.     See 

Albauy  &  W.  S.  R.  R.   Co.,  25  Barb.  Douglass  v.  Huston,  6  Ohio  156  ;  Miers 

(N.  Y.)  662  ;  Field  v.   Sands,  8  Bosw.  v.  Zanesville  &  M.  Turnpike  Co.,  13 

(N.  Y.)  685.  Ohio  197  ;  Corning  v.  White,  2  Paige 

•George  v.  Williamson,  26  Mo.  (N.  Y.)  567  ;  George  v.  Williamson,  26 
190  ;  2  Hoffman's  Ch.  Pr.  114  ;  Corn-  Mo.  190  ;  Albany  City  Bank  v.  Sober- 
ing v.  White,  2  Paige  (N.  Y.)  567;  merhorn,  1  Clarke's  Ch.  (N.  Y.)  297; 
Neal  v.  Foster,  13  Sawyer  237.  As  Storm  v.  Waddell,  2  Sandf.  Ch.  (N. 
between  various  creditors  who  bring  Y.)  494. 

suit,   their  priority  is  determined  by  5  Pendleton  v.  Perkins,  49  Mo.  565  ; 

the     date    of     their     suit.      Baer   v.  Doherty  v.  Holliday,  137  Ind.  282,  32 

Wilkinson,   35  W.  Va.   422,  14  S.    E.  N.  E.  Rep.  315,  36  Id.  907. 

Rep.  1;  Stamper  v.  Hibbs,  94  Ky.  358,  6  Voorhees  v.  Carpenter,    127  Ind. 

22  S.  W.  Rep.  607  ;  Fordyce  v.  Hicks.  300,  26  N.   E.   Rep.   838  ;  Doherty  v. 

76  Iowa  41,  40  N.  W.  Rep.  79.  Holliday,  137  Ind.  282,  32  N.  E.  Rep. 

8  Claflin  v.  Gordon,  39  Hun  (N.  Y)  315,  36  Id.  907. 

56.  1  Burt  v.  Keyes,  1  Flippin  72. 

3  Jeffres  v.  Cochrane,  47  Barb.  (N.  8  Patterson  v.  Brown,  32  N.  Y.  81. 
Y.)  557. 


/IO  PREFERENCES   IN   NEW   YORK.  §  392a,  393 

This  is  a  phase  of  the  general  rule  that  no  allowance  will 
be  made  for  improvements  placed  upon  land  after  suit 
brought.1  The  Court  of  Chancery  does  not,  however, 
give  any  specific  lien  to  a  creditor  at  large  against  his 
debtor,  further  than  he  has  acquired  at  law.  It  is  only 
when  he  has  obtained  a  judgment  and  execution  in  seek- 
ing to  subject  the  property  of  his  debtor  in  the  hands  of 
third  persons,  or  to  reach  property  not  accessible  to  an 
execution,  that  a  legal  preference  is  acquired  which  a 
Court  of  Chancery  will  enforce2  In  New  York  "the 
law  gives  no  preference  to  a  vigilant  creditor  in  the  estate 
of  a  decedent."  3 

§  392a.  Preferences  in  New  York  for  wages.  — By  statute 
in  New  York4  it  is  provided  that,  in  all  assignments 
made  pursuant  to  the  act,  the  wages  or  salaries  of 
employes  shall  be  preferred  before  any  other  debt.  The 
money  must  be  actually  due  for  wages  and  not  for  money 
loaned.5  The  Court  of  Appeals  held  that  an  assign- 
ment was  not  rendered  void  by  reason  of  the  omission  to 
insert  therein  a  clause  giving  such  preference,  as  the 
instrument  would  be  read  in  connection  with  the  statute 
with  the  same  effect  as  though  the  provisions  formed  a 
part  of  it.0 

§  393-  Compromises — Secret  preferential  agreements. — The 
law  has  ever  scrupulously  guarded  the  integrity  and  good 
faith  required  in  the  general  compromises  of  creditors 
with  their  debtors.  From  considerations  of  public  policy 
and  sound  morals,  transactions  of  this  character  should  be 
conducted  with  truth  and  fairness,  lest  any  undue  secret 
advantage  be  secured  to  one  creditor  at  the  expense  of 

1  Sedgwick  &  Wait  on  Trial  of  Title  amended  by  Laws  of  1884,  Ch. 
to  Land,  2.1  <•<!.,  g  705.  328. 

2  Day  v.  Washburn.  24  How.  355.  5   Clark   v.     Andrews,    19     N.    Y. 

3  Lichtenberg  v.  Herdtfelder.    103  Supp.  211. 

X.  Y.  306,  8  N.  E.  Rep.  526.  •  Richardson  v.  Thurber,  104  N.  Y. 

4  Laws  of  1877.  Ch.  466,  §  29,  as     606,  UN.  E.  Rep.  133. 


§393  compromises.  711 

another.1  Attempts  to  thwart  the  application  of  these 
salutary  principles  are  common  and  when  detected  will 
be  overthrown.2  In  Cockshot  v.  Bennet,3  the  defendants 
being  indebted  to  plaintiffs  and  other  creditors,  a  com- 
promise was  effected  at  11^.  in  the  pound  as  to  all  cred- 
itors except  plaintiffs,  who  refused  to  sign  the  deed  unless 
the  defendants  gave  them  a  note  for  the  remaining  9^.  in 
the  pound.  The  note  was  accordingly  given,  and  defend- 
ants made  a  subsequent  promise  to  pay  it.  Lord  Kenyon, 
in  defeating  a  recovery,  placed  his  opinion  upon  the 
foundation  that  the  note  was  a  fraud  upon  the  creditors 
who  were  parties  to  the  deed  by  which  their  debts  were 
to  be  cancelled  in  consideration  of  receiving  iu.  in  the 
pound,  and  observed  that  "  all  the  creditors  being 
assembled  for  the  purpose  of  arranging  the  defendants' 
affairs,  they  all  undertook  and  mutually  contracted  with 
each  other  that  the  defendants  should  be  discharged  from 
their  debts  after  the  execution  of  the  deed."  Upon  the 
point,  as  to  the  revival  of  the  debt  by  a  subsequent 
promise,  the  learned  Chief-Justice  said  •  "Contracts  not 

founded  on  immoral  considerations  may  be  revived 

But  this  transaction  is  bottomed  in  fraud,  which  is  a 
species  of  immorality,  and  not  being  available  as  such, 
cannot  be  revived  by  a  subsequent  promise."  Mr.  Justice 
Ashurst  remarked  in  the  same  case  that  the  creditors 
"were  induced  to  enter  into  the  agreement  on  principles 
of  humanity  in  order  to  discharge  the  defendants  from 
their  incumbrances;  and  if  they  had  not  thought  that 
such  would  have  been  the  effect,  they  would  not  probably 
have    agreed    to    sign    the    deed,  but  each  would    have 


1  Fenner  v.    Dickey,    1  Flippin    30.  to   make   disclosures   concerning  his 

See  White  v.    Kuntz,  107  N.  Y.  518,  property.     Graham  v.  Meyer,  99    N. 

14  N.  E.  Rep.  423  ;  Hanover  Nat.  Bank  Y.  611,  1  N.  E.  Rep.  143. 

v.  Blake,  142  N.  Y.  404,  37  N.  E.  Rep.  s  Bliss  v.  Matteson,  45  N.  Y.  22. 

519.       The    debtor    seeking   a    com-  3  2  T.  R.  763. 
position  is  not  bound  unless  requested 


7i2  compromises.  §  393 

endeavored  to  obtain  payment  of  his  whole  debt.     There- 
fore  I  think  that  this  security  is  not  merely  voidable,  but 

absolutely  void The  note  was  void  on  the  ground 

of  fraud,  and  any  subsequent  promise  must  be  nudum 
pactum"  So  in  Jackson  v.  Lomas,1  a  secret  agreement 
was  made  by  a  debtor  with  a  creditor  to  pay  an  additional 
sum,  the  consideration  of  which  agreement  was  that  the 
creditor  should  sign  a  composition  deed  with  the  other 
creditors.  Mr.  Justice  Buller  declared  the  secret  agree- 
ment absolutely  void,  and  refused  to  enforce  it.2  The 
principle  of  these  English  cases  is  upheld  in  the  early  case 
of  Payne  v.  Eden,3  in  New  York,  where  a  note  given  in 
consideration  of  the  creditors  signing  the  insolvent's  peti- 
tion to  make,  up  the  statutory  proportion  was  adjudged 
void.  And  in  Wiggin  v.  Bush,4  a  note  executed  by  a 
debtor  to  his  creditor,  to  induce  him  to  withdraw  his 
opposition  to  the  debtor's  discharge  under  an  insolvent 
law  was  adjudged  void.  So  a  note  given  by  a  third  per- 
son to  a  creditor  in  consideration  of  his  withdrawing  all 
opposition  to  the  discharge  of  his  debtor  as  a  bankrupt, 
even  though  without  the  knowledge  of  the  debtor,  is 
void.5  In  Case  v.  Gerrish,6  Chief-Justice  Shaw,  in 
deciding  upon  an  agreement  of  this  character  where  a 
note  had  been  ^iven,  said  :  "  This  was  an  unwarrantable 
coercion  upon  the  debtor,  and  a  fraud  upon  the  other 
creditors,  which  renders  the  note  void." 


1  4  T.  R.  166.  33  Caines  (N.  Y.)  213. 

*  See  Jones    v.    Barkley,    2    Doug.  4 12  Johns.  (N.  Y.)  306. 

696;   Sumner  v.    Brady,   1    H.    Bla.  ''Bell  v.  Leggett,  7  N.  Y.  176.      See 

647;  Jackson  v.    Duchaire,    3  T.    R.  Waite   v.   Harper,   2  Johns.    (N.  Y.) 

551  ,  Feise    v.   Randall,  6  T.   R.  146;  386;    Tuxbury   v.   Miller,   19    Johns. 

Leicester  v.  Rose,  4  East  372  ;  Hoi mer  (N.  Y.)  311  ;    Drexler  v.    Tyrrell,    15 

v.  Yiner,  1  Esp.  131  ;  Knight  v.  Hunt,  Nev.  132  ;    York  v.  Merritt,    77  N.  C. 

5  Bing.  4:i2  ;  Howson  v.  Hancock,  8  214  ;   Sharp    v.   Teese,  9    N.  J.  Law 

T.  R.  575  ;  Solinger  v.  Earle,  82  N.  Y.  352. 

393.  6 15  Pick.  (Mass.)  49. 


§§  393a>  394      ILLEGAL   COMPOSITION    PREFERENCE.  713 

§  393a.  Illegal  composition  preference.  —  When  a  creditor 
signs  a  composition  agreement  under  a  secret  agreement 
with  the  debtor,  giving  him  a  preference  or  some  undue 
advantage  over  other  creditors,  this  does  not  as  to  such 
creditor  nullify  the  composition  agreement.  The  secret 
agreement  to  prefer  is  fraudulent  and  void  and  the  com- 
position agreement  stands.1 

Gray,  J.,  said  :  "  It  seems  wiser  simply  to  regard  the 
secret  agreement  as  one  which  the  law  avoids  for  its 
fraud.  The  creditor  makes  it  with  the  risk  of  its  worth- 
lessness,  if  repudiated,  and  the  debtor  makes  it  with  the 
peril  that  its  discovery  will  furnish  cause  for  his  other 
creditors  to  avoid  the  composition  agreement."3 

§  394.  Secret  antecedent  agreement  to  prefer.  —  An  agree- 
ment between  a  debtor  and  creditor  that,  in  consideration 
of  receiving  a  loan,  the  debtor  will  prefer  such  creditor  in 
the  event  of  insolvency,  has  been  considered  to  be  in  the 
nature  of  a  secret  lien,  which  is  a  fraud  upon  subsequent 
creditors  of  the  debtor  who  are  ignorant  of  the  arrange- 
ment, and  a  subsequent  disposition  of  the  property  in 
accordance  with  such  an  arrangement  can  be  avoided  by 
such  subsequent  creditors.3  We  doubted  the  soundness  of 
this  conclusion  in  our  first  edition,  and  the  case  cited  has 
since  been  overturned4  and  its  conclusions  departed  from.5 
In  National  Park  Bank  v.  Whitmore,6  Earl,  }.,  said:  "A 
debtor  may  obtain  credit  by  a  promise  to  pay  in  the  future, 
either  in  cash  or  in  property,  or  by  promising  to  give  his 
check  or  an  indorsed  note,  or  a  confession  of  judgment. 


■Hanover  Nat.  Bank  v.  Blake,  142         4  17  Fed.  Rep.  705. 
N.  Y.  404.  37  N.  E.  Rep.  519.  5See  National  Park  Bank  v.  Whit- 

*  Hanover   Nat.  Bank  v.   Blake,  142  more,  104  N.   Y.  304,  10  N.   E.    Rep. 

N.  Y.    404,   415.    37   N.   E.  Rep.    519.  524,  and  cases  cited.     Compare  (lark 

See  White  v    Kuntz,   107  N.  Y.  518,  v.   Andrews,    19   N.    Y.    Snpp.    211: 

14  N.  E.  Rep.  423.  Pierce  Steam  Heating  Co.  v.  Ransom, 

3  See  Smith  v.  Craft,   11  Biss.  340,  16  App.  Div.  (N.  Y.)  200. 
123  U.  S.  441,  8  S.  C.  Rep.  196.  c104  N.  Y.  303,  10  N.  E.  Rep.  524. 


714  SECRET   ANTECEDENT   AGREEMENT.  §  394 

Neither  such  a  promise,  nor  its  performance,  is  a  legal  fraud 
upon  any  one  ;  and  why  may  he  not  promise  to  give 
security  upon  the  property  purchased,  or  other  property  ? 
Such  a  promise,  honest  in  fact,  has  never  been  held  to  be 
a  fraud  or  to  work  a  fraud  upon  creditors.  Security  hon- 
estly given  in  pursuance  of  such  a  promise  relates  back  to 
the  date  of  the  promise,  and,  except  as  to  intervening  rights, 
is  just  as  good  and  effectual  as  if  given  at  the  date  of  the 
promise  ;  and  it  has  generally  been  so  held,  even  in  bank- 
ruptcy proceedings.1  But  here  the  agreement  was  to  make 
the  preferential  assignment  in  case  it  became  necessary 
to  protect  the  creditor  ;  and  it  is  further  claimed  that 
such  a  conditional  agreement  is  a  fraud  upon  other  cred- 
itors. A  failing  debtor  may  make  an  assignment  prefer- 
ring one  or  more  creditors  because  he  is  under  a  legal, 
equitable,  or  moral  obligation  to  do  so,  or  he  may  do  it 
from  mere  caprice  or  fancy,  and  the  law  will  uphold  such 
an  assignment  honestly  made.  If  he  may  make  such  an 
assignment  without  any  antecedent  promise,  why  may  he 
not  make  it  after  and  in  pursuance  of  such  a  promise  ? 
How  can  an  act  otherwise  legal  be  invalidated  because 
made  in  pursuance  of  a  valid  or  invalid  agreement  hon- 
estly made  ?  In  Smith  v.  Craft,2  Judge  Gresham  held 
that  such  a  conditional  agreement  for  a  future  preference 
was  a  fraud  upon  creditors.  But  in  the  same  case,3  upon 
a  rehearing,  Judge  Woods  held  that  the  same  agreement 
was  not  fraudulent,  and  in  a  very  satisfactory  opinion 
showed  that  such  an  agreement  as  we  have  here,  for  a 
future  preference  in  case  of  insolvency,  is  not  a  legal 
fraud  upon  creditors.4      This  agreement   did   not  create 

1  Citing  Bump's  Bankruptcy  [10th  ner,  L.  R.  13  Ch.  Div.  245  ;  Mercer  v. 

ed.]    821  ;  Forbes  v.  Howe,    102  Mass.  Peterson,  L.  R.  2  Ex.  304,  L.  R.  3  Ex. 

127  :  Bank  of  Leavenworth  v.  Hunt,  104. 

11   Wall.  391;  Burdick  v.   Jackson,  7  *  11  Biss.  340. 

Hun  (N.   Y.)  488;  Ex  parte  Ames,  1  3  17  Fed.  Rep.  705. 

Lowell's   Dec.   561;  Ex  parte  Fisher,  *  Citing  Walker  v.   Adair,  1  Bond 

L.  R.  7  Ch.   App.  636  ;  Ex  parte  Kil-  158  ;  Anderson  v.  Lachs,  59  Miss.  Ill  ; 


§  394a  RIGHTS   OF   ATTACHING    CREDITOR.  715 

any  lien,  legal  or  equitable,  upon  the  property  of  the 
defendants.  It  was  not  an  agreement  for  a  future  lien 
upon  the  specific  property,  which  is  sometimes  held  to 
create  an  equitable  lien  which  may  be  enforced  in  equity. 
It  was  not  an  agreement  for  any  lien  at  all.  It  was  sim- 
ply an  agreement,  in  case  of  an  assignment  by  the 
defendants,  to  prefer  Whiting.  The  agreement  did  not 
bind  defendants'  property,  nor  encumber  it,  but  left  it 
subject  to  all  the  remedies  of  their  creditors,  and  it 
neither  hindered  nor  delayed  those  creditors.  They 
could  have  made  the  same  assignment  without  a  previous 
agreement,  and  it  is  impossible  to  perceive  how  the  agree- 
ment worked  any  legal  harm  to  any  one.  It  is  not 
important  to  determine  whether  this  was  an  agreement 
of  which  a  court  of  equity  would  enforce  specific  per- 
formance, but  we  do  not  believe  it  was,  and  think  it  must 
stand  both  in  law  and  equity  like  an  agreement  to  pay  at 
a  future  day." 

§  394a.  Rights  of  attaching  creditor.  —  A  preference  given 
by  an  insolvent  debtor  to  a  bona  fide  creditor  cannot  be 
avoided  by  an  attaching  creditor  in  Massachusetts, 
whether  the  form  of  preference  which  is  adopted  is  a 
general  assignment  for  the  benefit  of  such  creditors  as 
should  assent  thereto,  or  an  assignment  for  the  benefit 
of  certain  specified  creditors,  or  an  assignment  directly 
to  a  single  creditor.  Otherwise  it  would  simply  amount 
to  giving  a  preference  to  an  attaching  creditor,  instead 
of  to  the  creditor  or  creditors  selected  by  the  debtor.1 


Spaulding  v.  Strang,  37  N.  Y.  135,  3S  '  Sawyer  v.  Levy,    162   Mass.    190, 

N.  Y.  9 ;  Haydock  v.  Coope,  53  N.  Y.      38  N   E.  Rep.  365,  and  cases  cit<><l. 
68. 


CHAPTER  XXVI. 


CONVEYANCES   VALID   BETWEEN  THE    PARTIES 
RELIEF  TO  DEFRAUDED  GRANTORS. 


£  395.  Conveyances  binding  between 
the  parties. 

396.  The  theory  —  No  reconveyance. 

397.  Massachusetts  cases. 

398.  General  rule  and  policy. 

399.  When  aid  will  be  extended  to 

grantors. 

400.  Cases  and  illustrations. 

401.  The  cases  just  considered  ex- 

ceptional. 


£  402.  Grantee  enforcing    fraudulent 
deed . 

403.  Fraud    upon  debtor  as  distin- 

guished    from     fraud     upon 
creditors. 

404.  Declaring  deed  a  mortgage. 
404o.  Redeeming    mortgaged   prop- 
erty. 


"  That  court  is  not  a  divider  of  the  inheritance  of  iniquity  between    ....    two  confederates 
in  fraud."     Mr.  Justice  Lamar  in  Dent  v.  Ferguson,  132  U.  S.  50,  66,  10  S.  C.  Rep.  13. 

§395-  Conveyances  binding  between  the  parties.  —  The 
statute  under  which  fraudulent  and  voluntary  convey- 
ances may  be  set  aside,  13  Eliz.  c.  5,  ordinarily  has  no 
application  to  the  parties  to  such  instruments  or  their 
representatives.  In  Jackson  v.  Garnsey,1  Spencer,  C.  J., 
in  referring  to  this  subject,  used  these  words :  "  As 
between  the  parties  they  are  expressly  excluded  from  its 
operation,  and  are  left  as  they  stood  at  the  common  law  ; 
and  before  the  statute  the  heir  could  never  set  up  his 
title  against  the  voluntary  alienee  of  his  ancestor,  nor 
call  upon  him  for  contribution,  where  both  were  amenable 
to  the  creditors  of  the  ancestor  as  ter-tenants  ;  nor  will 
courts  of  equity  assist  the  party  making  a  voluntary 
conveyance    or    his   representative   claiming  as  such   by 


1  16  Johns.  (N.  Y.)  189.    See  Harvey  Y.  552,  27  N.  E.  Rep.  247  ;  Farrar  v. 

v.    Varney,  9ft  Mass.  118  ;  Hudson   v.  Bernheim,  41  U.  S.  App.  172,  21  ( '.  ( '. 

White,   17  R.  I.  528,  23  Atl.  Rep.  57  ;  A.  264.     See  £§  112,  113,  121. 
Knower  v.  Central  Nat.   Bk.,  124  N. 


8  395 


CONVEYANCES    HIND  INC. 


717 


setting  them  aside."  The  cases  holding  such  convey- 
ances binding  between  the  parties  are  numerous.1  The 
same  rule  appertains  to  general  assignments  which, 
though  voidable  by  creditors,  are  always  valid  between  the 
immediate  parties.-  The  conveyance  as  between  the  par- 
ties stands  upon  the  same  ground  as  if  a  full  and  adequate 
consideration  had  been  paid.3     In  conformity  with  this  rule 


1  See  Mercer  v.  Mercer,  29  Iowa  557  ; 
Tan  turn  v.  Miller,  11  N.  J.  Eq.  551  : 
Bonesteel  v.  Sullivan,  104  Pa.  St.  9  ; 
Lerow  v.  Wilmarth,  9  Allen  (Mass.) 
386;  Bullitt  v.  Taylor  34  Miss.  708, 
737  ;  Armington  v.  Rau,  100  Pa.  St. 
168  ;  Haak's  Appeal,  100  Pa.  St.  62  ; 
Doe  d.  Abbott  v.  Hurd,  7  Blackf. 
(Ind.)  510  ;  McGuire  v.  Miller,  15  Ala. 
394,  397;  Williams  v.  Higgins,  69 
Ala^  523  ;  Dyer  v.  Homer,  22  Pick. 
(Mass.)  253  ;  Keel  v.  Larkin,83  Ala,  142, 
3  So.  Rep.  296  ;  Songer  v.  Partridge, 
107  111.  529  ;  Barrow  v.  Barrow,  108 
Ind.  345,  9  N.  E.  Rep.  371  ;  Reichart 
v.  Castator,  5  Binn.  (Pa.)  109,  6  Am. 
Dec.  402,  and  note  ;  Newell  v.  Newell, 
34  Miss.  385  ;  Shaw  v.  Millsaps,  50 
Miss.  380  ;  Davis  v.  Swanson,  54  Ala. 
277;  Noble  v.  Noble,  26  Ark.  317: 
Lloyd  v.  Foley,  6  Sawyer  426  ;  Van 
Wy  v.  Clark,  50  Ind.  259  ;  Crawford 
v.  Lehr,  20  Kans.  509 ;  Peterson  v. 
Brown,  17  Nev.  173,  30  Pac.  Rep.  697 ; 
Allison  v.  Hagan,  12  Nev.  38  ;  Stewart 
v.  Piatt,  101  .U.  S.  738;  Harmon  v. 
Harmon,  63  111.  512;  Graham  v.  Rail- 
road Co.,  192  U.  S.  148;  George  v. 
Williamson,  26  Mo.  190  ;  Sharpe  v. 
Davis,  76  Ind.  17  ;  Nichols  v.  Patten, 
18  Me.  231  ;  Ellis  v.  Higgins,  32  Me. 
34 ;  Bush  v.  Rogan,  65  Ga.  321  ; 
Goodwyn  v.  Goodwyn,  20  Ga.  600  ; 
McCleskey  v.  Leadbetter,  1  Ga.  551  ; 
Muller  v.  Balke,  154111.  110,  39  N.  E. 
Rep.  658;  Francisco  v.  Aguirre,  94 
Cal.  181,  29  Pac.  Rep.  495  :  Springfield 
Homestead    Assoc,    v.   Roll,    137    111. 


205,  27  N.  E.  Rep.  184 ;  Dent  v.  Fer- 
guson, 132  U.  S.  50,  10  S.  C,  Rep.  13  ; 
Kirkpatrick  v.  Clark,  132  111.  342,  24 
N.  E.  Rep.  71;  Hudson  v.  While.  17  R. 
I.  519,  23  Atl.  Rep.  57  ;  Kitts  v.  Will- 
son,  130  Ind.  492,  29  N.  E.  Rep.  401  ; 
Phenix  Ins.  Co.  v.  Fielder,  133  Ind. 
557,  33  N.  E.  Rep.  270  :  Weatherbee  v. 
Cockrell,  44  Kan.  380,  24  Pac.  Rep. 
417  ;  Doughty  v.  Miller,  50  N.  J. 
Eq.  529,  25  Atl.  Rep.  153  ;  Stephens 
v.  Adair,  82  Tex.  214,  18  S.  W. 
Rep.  102.  In  Barrow  v.  Barrow.  108 
Ind  345,  9  N.  E.  Rep.  371,  it  was 
held  that  where  a  wife  joined  her 
husband  in  conveying  his  land  in 
fraud  of  creditors,  she  could  not, 
after  obtaining  a  divorce,  have  the 
conveyance  set  aside,  and  the  land 
subjected  to  the  payment  of  her  judg- 
ment for  alimony. 

5  Ames  v.  Blunt,  5  Paige  (N.  Y.)  13  ; 
Mills  v.  Argall,  6  Paige  (N.  Y.)  577  ; 
Smith  v.  Howard,  20  How.  Pr.  (N.  Y.) 
121.  126;  Bradford  v.  Tappan,  11 
Pick.  (Mass.)  76  ;  Van  Winkle  v.  Mc- 
Kee,  7  Mo.  435  ;  Bellamy  v.  Bellamy, 
6  Fla.  62  ;  Rumery  v.  McCulloch,  54 
Wis.  565,  12  N.  W.  Rep.  65.  Sec 
Chap.  XXI. 

3Chapin  v.  Pease,  10  Conn.  73. 

Relaxation  of  the  rule.  —  Bowes  v. 
Foster,  2  H.  &  N.  779.  seems  to  evi- 
dence an  intention  to  relax  this  salu- 
tary rule.  Plaintiff  being  in  financial 
difficulties,  and  fearing  proceedings 
on  the  part  of  his  creditors,  made  an 
agreement  with  defendant,   who  was 


7i8 


CONVEYANCES    BINDING. 


395 


it  is  held  that  a  debtor  who  has  conveyed  his  property  in 
order  to  defraud  his  creditors  has  no  standing  in  a  court 
of  equity  to  question  the  fairness  or  adequacy  of  price 
obtained  at  the  public  sale  of  the  premises  under  a  cred- 
itor's bill  to  reach  such  property.1  It  is  not  material 
whether  the  party  is  alleging  the  fraud  as  matter  of 
defense,  or  as  a  ground  of  action,2  for,  as  was  said  by 
Lord  Mansfield,3  "  no  man  shall  set  up  his  own  iniquity 
as  a  defense,  any  more  than  a  cause  of  action."  4  The 
same  rule  applies  between  the  heirs  of  the  original 
parties.5  The  grantor  cannot  avoid  the  application  of  this 
rule  by  purchasing  through  another,  under  a  subsequent 


also  a  creditor,  that  a  pretended  sale 
of  a  stock  of  goods  should  be  made  to 
defendant.  An  invoice  was  prepared, 
a  receipt  given  for  the  purchase- 
money,  and  possession  delivered  to  the 
defendant.  The  latter  sold  the  goods 
as  his  own.  Plaintiff  brought  trover 
and  was  permitted  to  recover  upon 
the  theory  that  the  transaction  never 
was  in  reality  a  sale.  Pollock,  C.  B., 
said  :  "  I  am  by  no  means  sure  that  a 
man  who,  under  the  pressure  of  dis- 
tress and  misfortune,  lends  himself  to 
such  a  transaction,  is  in  the  same 
delictum  as  a  man  who  does  so  with- 
out such  motive."  Still  more  re- 
markable is  the  statement  of  Martin, 
B.,  who  observed  :  "It  is  said  that  a 
person  ought  not  to  be  allowed  to  set 
up  his  own  fraud.  But  here  there 
was  no  fraud  :  it  was  only  in- 
tended to  give  the  defendant  the 
I  lower  to  pretend  that  he  was  the 
owner  of  the  goods."  If  observations 
such  as  these  are  to  pass  unchallenged 
the  principle  of  law  for  which  we 
are  contending  would  be  practically 
nullified. 

1  Guest  v.  Barton,  32  N.  J.  Eq.  120. 

•  Williams  v.    Higgins,  09  Ala.  523. 


3Montefiori  v.  Montefiori,  1  W.  Bla. 
364. 

4  "As  between  the  grantor  and 
grantees  the  conveyances  made  were 
good  and  passed  title  to  the  property. 
And  as  to  the  creditors  of  the  grantor 
they  were  not  void,  but  merely  voida- 
ble at  their  option  ;  they,  by  proper 
proceedings,  could  have  them  set 
aside,  but  if  no  steps  were  taken  by 
them  for  such  purpose,  then  undoubt- 
edly the  title  of  the  grantees  would 
be  and  remain  indisputable."  Mc- 
Master  v.  Campbell,  41  Mich.  516,  2 
N.  W.  Rep.  836.  Whenever  it  ap- 
pears that  the  object  of  a  suitor  in 
filing  a  creditor's  bill  is  to  aid  a  person 
who  has  placed  his  property  in  the 
name  of  another  to  hinder  creditors 
to  regain  control  of  it,  equity  will 
refuse  assistance.  Ruckman  v.  Con- 
over,  37  N.  J.  Eq.  583  ;  Hamilton  Nat. 
Bank  v.  Halsted,  56  Hun  (N.  Y.)  533, 
9  N.  Y.  Supp.  852  ;  affi'd  134  N.  Y. 
520,  31  N.  E.  Rep.  900  :  Winans  v. 
Graves,  43  N.  J.  Eq.  263,  275,  11  Atl. 
Rep.  25. 

5  McClintock  v.  Loisseau,  31  W.  Va. 
865,  8  S.  E.  Rep.  612. 


§  396  THE   THEORY.  719 

judgment  against  him.1  As  to  every  one  but  creditors  the 
deed  fraudulently  made  is  good,2  and  it  will  be  set  aside 
only  in  so  far  as  is  necessary  to  satisfy  the  claim  of  the 
attacking  creditor  ;  any  surplus  remaining  will  be  returned 
to  the  grantee.3  In  some  States,  however,  the  deed  if 
made  for  an  inadequate  consideration,  the  grantee 
remaining  in  possession,  is  void  not  only  as  to  creditors, 
but  also  as  to  subsequent  purchasers  for  value,  whether 
they  had  notice  of  the  deed  or  not.4 

§  396.  The  theory  —  No  reconveyance. —  Lord  Chancellor 
Thurlow  5  declared  his  opinion  to  be  that  in  all  cases 
where  money  was  paid  for  an  unlawful  purpose  the  party, 
though  particeps  criminis,  might  recover  at  law  ;  and  the 
reason  was  that  if  courts  of  justice  meant  to  prevent  the 
perpetration  of  crimes  it  must  be,  not  by  allowing  a  man 
who  has  possession  to  hold  it,  but  by  putting  the  parties 
back  in  the  condition  in  which  they  were  before  entering 
into  the  transaction.  The  doctrine  of  the  learned  Lord 
Chancellor  would  seem  to  be  sufficiently  broad  to  cover 
the  cases  of  conveyances  made  in  fraud  of  creditors.  Yet 
the  authorities,  as  a  general  rule,  reveal  a  singular 
absence  of  any  disposition  on  the  part  of  the  courts  to 
extend  relief  to  fraudulent  grantors.6  A  fraudulent 
vendee  is  under  no  legal  obligation  to  reconvey,  though 
morally  bound  to  do  so  ;  and  a  court  of  equity  will  give 
no  aid  where  both  the  vendor  and  vendee  participate  in 
the   illegal    transaction.7       It    is     familiar    learning     that 


1  Eisner  v.  Heileman,  52  N.  J.  Law  6Farrar    v.    Bernheim,    41    U.    S. 

378.  20  Atl.  Rep.  46.  App.  172,  21  C.  C.  A.  264. 

2Kitts  v.    Wilson,    140  Ind.  604,  ,39  'Powell  v.    Ivey,    88  N.  C.  256,  28 

N.  E.  Rep.  813.  Alb.  L.  J.    254  ;  Farrar  v.  Bernheim, 

•Comyns  v.   Riker,  83  Hun  471,  31  41   U.  S.  App.  172,   21  C.   C.   A.   264. 

N.  Y.  Supp.  1042.  In    Carll    v.    Emery,    148    Mass.     32, 

4  Jones  v.  Light,  86  Me.  437, 30  Atl.  34,    18    N.    E.    Rep.    574,    the   court 

Rep.  71.  says  :    "  It  would  seem  equally  clear, 

6  See  Neville  v.   Wilkinson,  1    Bio.  that,   when   a  party  who  has  trans- 

C.  C.  547.  ferred  property  to  delay  or  defraud 


720 


THE   THEORY. 


§396 


equity  will  not  decree  a  specific  performance  of  an  agree- 
ment by  the  fraudulent  grantee  to  reconvey  the  property 
to  the  debtor,1  and  will  not  interfere  to  correct  a  mis- 
take in  a  deed  that  was  executed  for  a  fraudulent  pur- 
posed "  This  rule  is  a  penalty  imposed  by  the  law  for 
the  prevention  of  frauds.'13  And  if  a  party  obtains  a 
deed  without  consideration  upon  a  parol  agreement  that 
he  will  hold  the  land  in  trust  for  the  grantor,  there  is 
authority  to  the  effect  that  such  trust  will  not  be  enforced, 
as  it  would  violate  the  statute  of  frauds,  and  also  the 
general  rule  that  parol  evidence  cannot  be  admitted  to 
vary,  add  to,  or  contradict  a  written  instrument.4  In  a 
New  Jersey  case5  it  was  decided  that  a  note  which  was 
given  for  property  transferred  to  the  maker  for  the  pur- 
pose of   defrauding   the   creditors  of  the  payee  could  not 


creditors  abandons  his  fraudulent 
purpose,  apprising  the  other  party 
thereof,  and  seeks  to  reinstate  him- 
self in  the  possession  of  his  prop- 
erty in  order  to  pay  his  creditors,  lie 
may  do  so.  It  cannot  be  that  the 
other  party,  who  has  been  a  par- 
ticipant in  the  fraudulent  transaction, 
by  reason  of  such  participation  should 
be  able  to  hold  the  property  the 
possession  of  which  he  had  so 
acquired,  and  thus  prevent  it  from 
being  devoted  to  its  legitimate  uses." 
'Walton  v.  Tusten,  49  Miss.  577; 
Sw.-et  v.  Tinslar,  52  Barb.  (N.  Y.)  271  ; 
Canton  v.  Dorchester,  8  Cush.  (Mass.) 
525  ;  Grider  v.  Graham,  4  Bibb  (Ky.) 
70;  Baldwin  v.  Cawthorne,  19  Ves. 
L66;  Ellington  v.  Currie,  5  Ired.  (N. 
C.)  E.|.  21  ;  St.  John  v.  Benedict,  (i 
Johns.  Ch.  (N.  Y.)  111;  Waterman 
on  Specific  Performance  (ed.  1881), 
§340;  Chapin  v.  Pease,  10  Conn  72; 
Tyler  v.  Tyler.  85  III.  App.  343.  Even 
if  the  conveyance  contained  an  ex- 
press agreement  to  reconvey  on 
demand,  it  is  competent  for  the  pails 


especially  bound  by  the  contract  to 
go  behind  the  language  of  the  writing 
and  show  that  its  real  purpose  was  to 
defraud  creditors.  Tyler  v.  Tyler, 
126  111.  525,  21  N.  E.  Rep.  616.  If, 
however,  a  distinct  and  independent 
contract  is  entered  into,  subsequent 
to  the  conveyance,  for  a  fair  and 
valuable  consideration,  it  will  not  be 
tainted  by  the  fraud  of  the  main 
transaction.  Dent  v.  Ferguson,  132 
U.  S.  50,  10  S.  C.  Rep.  13.  So  an 
agreement  to  account  for  the  profits 
made  while  the  property  was  in  the 
grantee's  hands,  was  enforced  in 
Stillings  v.  Turner,  153  Mass.  534,  27 
N.  E.  Rep.  671.     See  §  429. 

-'Gebhard  v.  Battler,  40  Iowa  152. 
Robertson  v.  Sayre,  134  N.  Y.  99. 

1  Pusey  v.  Gardner,  21  W.  Va.  474, 
31  N.  E.  Rep.  250  ;  Troll  v.  Carter,  15 
W.  Va.  567 ;  Zane  v.  Fink,  18  W. 
Va.  755.  See  Cutler  v.  Turtle,  19  N. 
J.  Eq.  549. 

Church    v.    Muir,   33   N.    J.    Law 
319. 


§  396  THE   THEORY.  721 

be  enforced  in  the  hands  of  the  payee  against  the  maker. 
In  the  course  of  the  opinion  Chief-Justice  Beasley 
indulged  in  the  following  refreshing  observations:  "It 
was  urged  that  the  statute  for  the  prevention  of  frauds 
and  perjuries  does  not  invalidate  transactions  the  end  of 
which  is  to  prevent  or  make  difficult  the  collection  of  just 
claims,  except  so  far  as  concerns  creditors,  and  that, 
inter  partes,  such  transactions,  if  containing  no  other 
infirmity,  will  be  effectuated  at  law.  It  is  certainly  true, 
the  statute  referred  to  does  not,  propria  vigore,  annul 
beyond  the  extent  thus  defined,  the  conveyances  and 
contracts  at  which  it  is  levelled.  Nothing-  more  than 
this  was  necessary  to  effect  its  purpose,  which  was  the 
relief  and  protection  of  creditors  against  this  class  of 
frauds.  But  it  is  also  clear,  that  it  has  no  tendency  to 
legalize  any  act  which  was  not  legal  at  the  time  of  its 

enactment A  contract,  the  purpose  of  which  is  to 

protect  a  debtor  against  the  just  claims  of  creditors,  is  an 
immoral  act.  Such  an  affair  is  inimical  to  social  policy. 
It  is  in  direct  opposition  both  to  the  letter  and  spirit  of 

the  statute  for  the  prevention  of  frauds In  their 

essence  and  in  their  effects  such  contracts  are  as  immoral 
and  pernicious  as  many  of  those  which  the  law  has 
declared  to  be  utterly  void.  In  these  respects  how  are 
they  to  be  distinguished  from  contracts  to  indemnify 
persons  against  the  consequences  of  their  illegal  acts  ; 
against  liability  for  the  publication  of  a  libel ;  from 
promises  by  uninterested  parties  to  furnish  money  for 
the  prosecution  of  law-suits  ;  from  agreements  in  contra- 
vention of  the  bankrupt  or  insolvent  acts,  or  in  general 
restraint  of  trade  ;  or  from  that  host  of  other  conventions, 
which  have  been  so  often  judicially  condemned,  not  on 
account  of  any  enormous  immorality,  but  on  the  score  of 
their  inconsistency  with  public  interest  and  good  govern- 
ment ?  I  can  see  no  reason  why  contracts  to  defraud 
46 


722  MASSACHUSETTS   CASES.  §  397 

creditors  should  stand  on  a  different  footing  from  the 
rest  of  those  embraced  in  the  class  to  which  they  evi- 
dently belong.  They  are  hostile  to  fair  dealing  and 
commercial  honesty,  and,  on  this  account,  should  be  sub- 
jected to  the  ban  of  outlawry."  1  As  long  as  an  agree- 
ment of  this  kind  remains  executory  the  court  will  allow 
a  party  to  it  to  set  up  his  own  fraud,  in  an  action  brought 
to  enforce  it.2  It  has  been  held  that  in  an  action  to 
foreclose  a  mortgage  the  fact  that  it  was  given  in  fraud 
of  creditors  may  be  interposed  as  a  defense.3 

§  397.  Massachusetts  cases.  —  In  Massachusetts  a  long 
series  of  cases  has  established  the  rule  that  a  transfer 
either  of  real  or  personal  property,  made  with  a  view  to 
defraud  the  creditors  of  the  grantor,  although  the  grantee 
has  participated  in  this  intention,  is  good  between  the 
parties,  and  void  only  in  favor  of  creditors  ;  or  to  speak 
accurately,  is  voidable  by  creditors  at  their  election.  If 
no  creditors  intervene,  the  conveyance  stands  ;  if  creditors 
elect  to  affirm  the  transfer  and  receive  the  consideration, 
it  is  thereby  ratified  and  confirmed.  Payment  of  the 
grantor's  debts  to  the  full  value  of  the  property  purges 
the  fraud.*  This  doctrine  extends  to  executory  con- 
tracts.5 In  Freeland  v.  Freelaod,6  the  court  says : 
"  A  conveyance  made  in  fraud  of  creditors  is  valid  as 
between  the  parties,  and  can  be  avoided  only  by  cred- 
itors, or  by  the  assignee  in  insolvency,  representing  them  ; 

1  Compare  Nellis  v.  Clark,  20  Wend.  3  Williams  v.  Clink,  90  Mich.    297, 

(N.  Y.)  37,  and  dissenting  opinion  of  51  N.  W.  Rep.  453. 

Chief -Justice  Nelson  ;  Briggs  v.  Mer-  4  Drinkwater     v.     Drink  water,      4 

rill,  58   Barb.    (N.   Y.)  389  ;   Ager  v.  Mass.  354 ;  Oriental  Bank  v.  Raskins, 

Duncan,  50  Cal.  325  ;  Goudy  v.  Geb-  3  Met.  (Mass.)  332  ;  Crowninshield  v. 

hart,    1   Ohio  St.    262  ;    Hamilton   v.  Kitridge,  7  Met.  (Mass.)  520. 

Scull,  25  Mo.    165;  Andruss  v.  Doo-  5  Knapp   v.    Lee,    3    Pick.    (Mass.) 

little,  11  Conn.  283  ;  Merrick  v.  But-  452  ;  Dyer  v.  Homer,  22  Pick.  (Mass.) 

ler,  2  Lans.  (N.  Y.)  103;  Dent  v.  Fer-  253.      See  The   Lion,  1    Sprague  40; 

guson,  132  U.  S.  64,  10  S.  C.  Rep.  13.  Harvey  v.  Varney,  98  Mass.  120. 

5  Galpin  v.  Galpin,  74    Iowa  454,  38  6  102  Mass.  477. 
N.  W.  Rep.  156. 


§  39^  GENERAL   RULE   AND    POLICY.  723 

and,  if  he  affirms  it,  it  stands  good."  !  But  where  the 
action  is  brought  by  the  grantor,  not  in  his  own  behalf, 
but  for  the  purpose  of  having  the  grantee  account  for  the 
proceeds  of  the  property  conveyed  for  the  benefit  of  the 
grantee's  creditors,  the  action  can  be  maintained."  In 
Traders'  National  Bank  v.  Steere,3  the  court  says  :  "The 
conveyance  of  property  by  a  contract  which  is  void  as 
being  against  public  policy  in  a  particular  which  has  no 
reference  to  creditors  does  not  necessarily  give  creditors 
a  right  to  pursue  the  property  after  the  contract  has  been 
fully  executed.  Such  a  contract  may  or  may  not  be 
fraudulent  as  against  creditors.  If  it  is,  they  may  set  it 
aside ;  if  it  is  not,  they  cannot."  In  hi  re  Mapleback,4  cited 
in  the  last  case,  it  appeared  that  the  debtor  owed  one  of 
his  creditors  one  hundred  pounds,  and  forged  his  name 
upon  a  bill  of  exchange  for  one  hundred  pounds  more, 
which  was  discounted  at  a  bank.  Just  before  the  bill  of 
exchange  became  due,  the  debtor  wrote  to  the  creditor 
confessing  his  crime,  and  entreating  him  to  furnish  the 
money  to  enable  the  debtor  to  take  up  the  bill  and  con- 
ceal the  crime,  and  offering  security.  The  creditor  fur- 
nished the  money  and  took  the  conveyance  as  security 
for  the  amount  and  also  for  his  former  debt.  The  Lord 
Justices,  without  expressly  deciding  that  the  transaction 
was  illegal,  held,  that,  if  it  was,  the  assignee  could  not 
take  advantage  of  it,  because  it  was  not  a  fraud  upon 
creditors  nor  a  fraud  against  the  bankrupt  act. 

§398.  General   rule   and   policy.  —  These   covinous   con- 
veyances   are    binding    upon  heirs,5  legatees,6  and,  as  is 

1  Citing  Butler  v.  Hildreth,  5  Met.  4  4  Ch.  D.  150. 

(Mass.)  49  ;  Snow   v.   Lang,  2  Allen  B  Moseley  v.  Moseley,  15  N.  Y.  334  ; 

(Mass.)    18;    Harvey   v.    Varney,    98  Dent  v.  Ferguson,  132  U.  S.  50,  10  S. 

Mass.    118;    Morgan    v.    Abbott,    148  C.  Rep.   13;  Robertson  v.  Sayre,  134 

Mass.  507,  20  N.  E.  Rep.  165.  See  g  107.  N.  Y.  99,  31  N.  E.  Rep.  250.     See  g  121. 

2  Carll  v.  Emery,  148  Mass.   32.   18  6  Guidry  v.  Grivot,  2  Martin,  N.  S. 
N.  E.  Rep.  574.  (La.)    13.    14  Am.   Dec.   193.     See  § 

3  165  Mass.  393,  43  N.  E.  Rep.  187.  121,  n. 


724  GENERAL    RULE    AND    POLICY.  §  398 

elsewhere  shown,1  in  certain  cases  upon  personal  repre- 
sentatives 8  and  assignees.3  The  fraudulent  conveyance 
is  treated  as  so  far  valid  that  creditors  of  the  vendee  may 
seize  upon  the  property  and  may  even  cancel  a  recon- 
veyance of  it  to  the  grantor.4  A  court  of  equity  will 
not  intervene  to  give  relief  to  either  party  from  the 
consequences  of  a  fraudulent  conveyance.  The  maxim 
"in  pari  delicto  potior  est  conditio  defendentis"  must 
prevail.5 

Though  a  reconveyance  cannot  be  enforced,6  the 
fraudulent  vendee  is  said,  in  some  of  the  cases,  to  be 
under  a  high  moral  and  equitable  obligation  to  restore 
the  property.7  The  law  is  not  so  unjust  as  to  deny  to 
men  the  right,  while  it  is  in  their  power  to  do  so,  to 
recognize  and  fulfill  their  obligations  of  honor  and  good 
faith.  And  until  the  creditors  of  the  vendee  acquire 
actual  liens  upon  the  property,  they  have  no  legal  or 
equitable  claims  in  respect  to  it,  higher  than  or  superior 


1  See  §§  112,  113.  v.  American  Preservers'  Co.,  157  111. 

2  Blake    v.    Blake,    53    Miss.    193  :  316,  41  N.  E.  Rep.  765. 

Merry  v.  Fremon,  44  Mo.  522  ;   Davis  6  Where  a  person  fraudulently  and 

v.  Swanson,  54  Ala.   277  :  Loomis  v.  collusively  accepts  a  conveyance  of 

Tifft,  16  Barb.  (N.  Y.)  545.  land  from  another,  to  aid  the  grantor 

3  See  §  115  ;  also  Chap.  XXI.  in  defrauding  creditors,  the  wife  and 

4  Chapin  v.  Pease.  10  Conn.  69.  children  of  the  grantee  after  his  death 
See  £  387.  In  Allison  v.  Hagan,  12  are  mere  volunteers,  and  take  no 
Nev.  46,  the  court  said:  "Nor  will  greater  rights  than  the  grantee  had 
the  courts,  as  between  the  parties  to  in  his  lifetime.  Farrar  v.  Bernheim, 
a  fraudulent  conveyance,  or  between  41  U.  S.  App.  172,  21  C.  C.  A.  264. 

a  fraudulent  grantee   and    his   cred-  "  In    Fargo  v.   Ladd,   6    Wis.   106,  it 

itors,    permit  either    the   fraudulent  was  held  that  where  the  grantee  of 

grantor  or  grantee  to   be   heard    in  property  fraudulently  conveyed  had 

avoidance  of  the  fraudulent  act."  voluntarily  reconveyed  to  the  grantor, 

5  Randall  v.  Howard.  2  Black,  588  ;  in  apparent  execution  of  his  trust,  he 
Dent  v.  Ferguson,  132  U.  S.  64,  10  S.  could  not  thereafter  make  a  valid 
C.  Rep.  13  ;  Wheeler  v.  Sage,  1  Wall.  claim  to  the  property,  or  its  proceeds, 
518;  Bartle  v.  Nutt,  4  Pet.  184,  on  the  ground  of  the  original  fraudu- 
189  ;  Schermerhorn  v.  De  Chambrun,  lent  conveyance.  See  Second  Na- 
64  Fed.  Rep.  206;  Kirkpatrich  v.  Clark,  tional  Bank  v.  Brady,  96  Ind.  505. 
132  111.  342,  24  N.   E.  Rep.  71  ;  Bishop 


§  399  WHEN    AID    WILL    BE    EXTENDED.  725 

to,  those  of  the  grantor.1  It  has  been  contended  that 
the  transfer  only  made  visible  an  ownership  which  already 
existed,  though  secretly.2  While  the  fact  that  title  to 
real  estate  was  put  in  one  to  hold  for  another  with  intent 
to  defraud  creditors,  might  be  a  defense  by  the  trustee  in 
an  action  to  establish  the  trust,  yet  where  the  trust  has 
been  completed  by  a  conveyance  to  the  equitable  owner 
the  principle  has  no  application.3 

The  boundaries  of  these  rules  as  to  the  conclusiveness 
of  voluntary  or  covinous  conveyances  between  the  parties 
have,  however,  been  broken  over  in  some  instances.  And 
the  rule  itself  has  been  questioned  upon  the  theory  that 
both  parties  are  seldom  equally  to  blame  in  a  transaction 
tinctured  with  fraud  in  each,  and  if  they  are,  the  doctrine 
seems  to  encourage  a  double  fraud  on  the  one  side  to  pun- 
ish the  single  fraud  on  the  other.4 

§  399.  When  aid  will  be  extended  to  grantors.  —  This  rule, 
it  has  been  said,  did  not  in  the  nature  of  things  apply 
where  the  grantor  was  not  in  pari  delicto*  with  the 
grantee,  as  where  a  creditor  availed  himself  of  his  power 
over  a  debtor  and  induced  him  by  misrepresentation  to 


1  Davis  v.  Graves,  29  Barh.  (N.  Y.)  was    with  similar    caution  provided 

485  ;  Stanton  v.  Shaw,  3  Baxt.  (Term.)  that    the   voluntary    conveyances   in 

12 ;  Dunn  v.  Whalen,  21   N.  Y.  Supp.  the  contemplation  of  that  act  should 

869.  Mr.  Roberts  says  (Roberts' Fraud-  be  void    only  as  against  those   who 

ulent    Conveyances,     p.     641),     that  should  thereafter  purchase  upon  yail, 

"  voluntary  conveyances  were  always  i.  e.  valuable,  consideration, 

binding  upon  the  party,  and  all  claim-  2  See  Keel  v.  Larkin,  83  Ala.  146,  3 

ing  voluntarily  under  him  ;    and  the'  So.  Rep.  296,  and  cases  cited  ;  Lillis  v. 

statutes   of   Elizabeth  against  fraud-  Gallagher,  39  N.  J.  Eq.  94. 

ulent     conveyances    have     expressly  3  Campbell  v.  First  Nat.  Bk.  22  Col. 

guarded    against   a    construction    in  177,    43   Pac.    Rep.    1007  ;    Ownes    v. 

derogation  of  this  rule."     Thus  in  the  Ownes,  23  N.  J.  Eq.  60. 

statute  13  Elizabeth,  c.  5,  it  was  pro-  4  Gowan    v.    Gowan,     30  Mo.    476. 

vided   that  the   fraudulent   gifts   and  Compare    Nichols     v.     McCarthy.    5:! 

grants  therein  denounced   should  be  Conn.  299. 

void  only  against  those  persons  whose  B  Melbye  v.  Melbye,  15   Wash.  650, 

actions,  debts,  and  accounts  are  hin-  47  Pac.   Rep.   16;  Place  v.   Hay  ward, 

dered  and  delayed  ;  and  in  27  Eliz.  it  117  N.  Y.  487,  23  N.  E.  Rep.  25. 


726  WHEN   AID    WILL   BE    EXTENDED.  §  399 

make  a  fraudulent  conveyance  to  him.1  Thus  in  Roman  v. 
Mali.2  the  doctrine  is  asserted  that  there  may  be  differ- 
ent degrees  of  guilt  as  between  the  parties  to  a  fraudu- 
lent or  illegal  transaction,  and  if  one  party  act  under 
circumstances  of  oppression,  imposition,  undue  influence, 
or  at  a  great  disadvantage,  with  the  other  party  con- 
cerned, so  that  it  appears  his  guilt  is  subordinate  to  that 
of  the  defendant,  the  court  in  such  case  will  extend  relief. 
Parker,  J.,  said  in  James  v.  Bird  : a  "  There  is  no  case  in 
equity  where  any  relief  has  been  given  to  a  fraudulent 
grantor  of  property,  the  conveyance  being  made  to  pro- 
tect it  against  his  creditors,  except  that  of  Austin  v. 
Winston,4  decided  by  a  divided  court,  and  perhaps,  under 
the  circumstances,  properly  decided."  The  authority  of 
the  case,  however,  has  been  in  some  measure  acknowl- 
edged in  several  States.5  The  court  in  Fletcher  v. 
Fletcher,6  concedes  that  it  would  assist  the  grantor  in 
cases  where  circumstances  were  shown  which  warranted 
its  interposition  on  recognized  and  settled  grounds  of 
equity  jurisprudence,  "  such  as  fraud  in  procuring  the 
deed,  imposition  by  the  grantee  in  violation  of  some  fidu- 
ciary relation,  delusion,  or  the  like,  on  the  part  of  the 
grantor,  at  the  time  of  executing  the  deed."  In  Pinck- 
ston  v.  Brown,7  it  appeared  that  at  the  time  the  deed  was 


1  Austin  v.  Winston,   1   Hen.  &  M.  4  1  Hen.  &  M.  (Va.)  33. 

(Va.)  33 ;  Holliway   v.    Holliway,   77  6  See   Bellamy   v.  Bellamy,  6  Fla. 

Mo.  396.     In  Mississippi  it  is  held  that  104;    Freeman    v.    Sedwick,    6   Gill 

a  defendant  cannot  resist  payment  of  (Md.)  41  ;  Cushwa  v.  Cushwa,  5  Md. 

the   purchase-price  of  goods  sold  and  53;    Quirk  v.  Thomas,   6   Mich.    111. 

delivered  to  him,  on  the  ground  that  But  compare    Clay    v.    Williams,   2 

the  sale  was  in  fraud  of  the  creditors  Munf.  (Va.)  121  ;  Starke  v.  Littlepage, 

of   the  seller.     Gary    v.   Jacobson,  55  4  Rand.  (Va.)371:  Jones  v.  Comer,  5 

Miss.  'Juj.     gut  see,  contra,  Church  v.  Leigh  (Va.)  357;  Griffin  v.  Macaulay, 

Muir,    :;:;    N.     J.     Law    318:    Nellie  7  Gratt.  (Va.)  564. 

v.  (  lark,  4  Hill  (N.  Y. )  424  :  Walton  v.  6  2  MacAr.  (D.  C.)  39,  40. 

Bonham,  24  Ala.  513.     SeeMoseleyv.  '  3  Jours'    Eq.   (N.   C.)   490.     See 

Mosely,  15  N.  Y.334  Nichols  v.  McCarthy,  53  Conn.   299, 

U  Md.  513.  23  Atl.  Rep.  93. 

z  8  Leigh  (Va.)  510. 


§  399  WHEN   AIL)    WILL   BE    EXTENDED.  ;_V 

executed  the  plaintiff  was  old,  infirm,  weak  of  mind,  and 
much  diseased  and  distressed  in  body.  The  deed  was 
made  with  a  view  to  hinder  and  delay  the  collection  of  a 
debt.  The  party  benefited  was  the  plaintiff's  oldest  son, 
in  whose  ability  and  integrity  she  had  the  greatest  confi- 
dence. The  transfer  had  undoubtedly  been  consummated 
by  means  of  the  undue  influence  and  deceit  practiced 
upon  and  exercised  over  the  aged  and  confiding  mother 
by  the  son.  The  court  held  that  the  mother  and  son 
were  in  delicto,  but  not  in  pari  delicto,  and  at  the  suit  of 
the  mother  set  the  transaction  aside.1  In  a  case  which 
came  before  the  Supreme  Court  of  New  York,2  A.  sued 
B.  for  slander.  B.,  to  protect  himself,  conveyed  property 
to  C,  who  agreed  to  reconvey.  B.  defeated  the  slander 
suit.  It  was  held  that  C.  must  reconvey.  Johnson,  J., 
said  :  "  Gilman  had  at  the  time  no  other  creditors,  and 
his  sole  design  was  to  get  his  property  out  of  the  way  of 
any  judgments  which  might  possibly  be  recovered  in 
those  actions,  and  not  to  hinder,  delay,  or  defraud  any 
other  person  whatever.  It  turned  out  that  the  several 
plaintiffs  in  those  actions  had  no  'lawful'  claim  against 
Gilman.  They  were  not  creditors,  and,  as  to  them,  the 
conveyance  was  valid,  as  it  was,  also,  between  the  grantor 
and  grantee.  It  was  not  designed  to  defraud  the  plaintiff 
of  his  claim,  as  the  referee  expressly  finds.  As  this  con- 
veyance was  not  made  with  intent  to  hinder,  delay,  or 
defraud  any  existing  creditor,  or  any  person  having  a  law- 
ful claim,  but  only  a  person  making  an  unlawful  and 
unfounded  claim,  which  the  defendant  Gilman  disputed 
and  denied,  and  ultimately  defeated,  it  may  present  a 
grave  question,  whether  it  falls  at  all  within  the  condem- 


1  See  Osborne  v.  Williams,  18  Ves.  209,  38  N.    Y.    Supp.   546  ;  Block    v. 

382  ,  Story's  Equity  Jur.  §  300.  Darling,  140  U.  S.  239,  11  S.  C.  Rep. 

s  Baker  v.  Gilman,  52  Barb.  (N.  Y.)  832. 
36.     See  Kain  v.  Larkin,  4  App.  Div. 


728  CASES   AND   ILLUSTRATIONS.  §  4OO 

nation  of  the  statute The  sole  object  of  the  statute 

here,  in  declaring  conveyances  void,  is  to  protect,  and 
prevent  the  defeat  of  law  fid  debts,  claims,  or  demands, 
and  not  those  which  are  unlawful,  or  trumped  up,  and 
which  have  no  foundation  in  law  or  justice,  and  the  verity 
of  which  is  never  established  by  any  judgment,  or  by  the 
assent  of  the  person  against  whom  they  are  made.  As 
against  claims  and  demands  of  the  latter  class,  the  statute 
does  not  forbid  conveyances  or  assignments,  nor  declare 
them  void."  It  may  well  be  seriously  questioned,  how- 
ever, whether  this  contention  can  be  uniformly  upheld. 
The  courts  would  be  justified  in  refusing  to  inquire 
whether  the  grantor's  apprehensions  as  to  the  recovery 
of  a  judgment  against  him  were  well  or  ill  founded,  and 
might  well  incline  to  leave  the  parties  in  the  position  in 
which  it  found  them.1  In  a  Massachusetts  case  property 
fraudulently  conveyed  had  been  retransferred  to  the 
grantor  the  grantee  agreeing  to  account  for  the  profits. 
It  was  decided  that  this  agreement  was  valid  and  binding 
upon  him.2 

§  400.  Cases  and  illustrations. —  In  Boyd  v.  De  La  Mon- 
tagnie  3  it  appeared  that  a  husband  had  secured  a  gratu- 
itous transfer  of  property  from  his  wife  by  means  of  false 
representations  on  his  part,  that  she  was  liable  for  a  debt, 
when  in  fact  no  such  liability  existed.  Though  the  trans- 
action was  consummated  in  the  belief  that  the  effect  of  the 
transfer  would  be  to  hinder  and  delay  the  creditors,  or  in 
some  way  to  save  the  property,  it  was  held  to  be  no 
answer  that  the  wife  consented  to  the  act  with  a  view  to 
defraud  creditors.  Chief-Justice  Church  said:  "The 
parties  do  not  stand  on  equal   terms,  and   the   husband 


1  Compare  Tan  turn  v.  Miller,  UN.  2  Stillings  v.  Turner,  153  Mass.  534, 

J.  Eq.  551  ;  Harris  v.  Harris,  23  Gratt.  27  N.  E.  Rep.  671. 

(Va.)  7:57,  764.  and  see  contra,    Flet-  :;  7^  N.  Y.  498;  Haack  v.  Weicken, 

cher  v.  Fletcher,  2  MacAr.  (D.  C.)  38.  118  N.  Y.  74,  23  N.  E.  Rep.  133. 


§  400  CASES  AND  ILLUSTRATIONS.  729 

cannot  avail  himself  of  the  plea  of  particeps  en' minis  on 
the  part  of  the  wife."  A  court  of  equity  will  interpose  its 
jurisdiction  to  set  aside  instruments  between  persons 
occupying  relations  in  which  one  party  may  naturally 
exercise  an  influence  over  the  conduct  of  another.  A 
husband  is  held  to  occupy  such  a  relation  to  his  wife,  and 
those  equitable  principles  apply  to  them  in  respect  to 
gratuitious  transfers  by  the  wife  to  the  husband.1  So  in 
Freelove  v.  Cole  2  it  was  decided  that  as  there  are  degrees 
of  crime  and  of  wrong,  the  courts  can  and  will  give  relief 
in  many  cases  as  against  the  more  guilty.  "  To  exclude 
relief  in  such  cases,"  said  Smith,  J.,  "  the  parties  must  not 
only  be  in  delicto  but  in  pari  delicto!'  Applying  this  doc- 
trine it  was  held  that  where  the  plaintiff  was  infirm  of 
mind  and  incompetent  to  manage  and  conduct  his  busi- 
ness affairs  with  ordinary  prudence  and  discretion,  and  the 
defendant  was  his  son-in-law,  confidential  friend,  and  legal 
adviser,  and  had  procured  a  conveyance  to  himself  of 
the  property  in  order  to  place  it  beyond  the  reach  of  the 
plaintiff's  creditors,  relief  might  still  be  accorded  the 
plaintiff.3  Ford  v.  Harrington,4  an  important  and  lead- 
ing case  in  the  New  York  Court  of  Appeals,  in  which 
judges  of    the  eminence  of    Denio,  Johnson,   Comstock, 


'See  Barnes   v.    Brown,  32   Mich,  and  the  grantee.     The  rule  is  not  uni- 

146.  versal,  and,  as  stated,  is  not  supported 

2  41  Bart).  (N.  Y.)  326;  affirmed,  41  by  the  authorities.''  Cited  and  quoted 
N.  Y.  619,  without  an  opinion.  are  Osborne  v.  Williams,  18  Ves.  382  ; 

3  In  O'Conner  v.  Ward,  60  Miss.  Pinckston  v.  Brown,  3  Jones'  Eq.  (N. 
1025-1035  (decided  in  April,  1883),  the  C.)  494  ;  Smith  v.  Bromley,  2  Don.-. 
Supreme  Court  of  Mississippi  said:  696;  Browning  v.  Morris,  Cowp.  790  ; 
"We  do  not  agree  with  the  proposi-  Boyd  v.  De  La  Montagnie,  73  N.  Y. 
tion  announced  by  Mr.  Bump  in  his  498  ;  W.  v.  B.  32  Beav.  574  ;  Ford  v. 
work    on    Fraudulent    Conveyances,  Harrington,  16  N.  Y.  285. 

that    where  a  person   has  sufficient  4  16  N.    Y.   285.      See  Freelove  v. 

capacity  to  contract,  and  makes  a  con-  Cole,  41  Barb.  (N.  Y.)  318  ;  Gibson  v. 

veyance  with  intent  to  hinder,  delay,  Jeyes,  6  Ves.  266  ;  Smith  v.  Kay.  7  II. 

or  defraud   his  creditors,  a  court  of  L.  Cas.  771;  Place  v.   Hayward,  117 

equity     will     not    inquire     into    the  N.  Y.  496,  23  N.  E.  Rep.  25. 
degrees  of  guilt  between  the  grantor 


730  CASES   AND    ILLUSTRATIONS.  §  4OO 

Selden,  and  Brown  participated,  seems  clearly  to  establish 
the  same  general  principle.  It  was  there  expressly  held 
that  where  an  attorney  procured  from  a  client  a  convey- 
ance of  a  valuable  interest  in  land  for  a  manifestly  inade- 
quate consideration,  the  conveyance  being  advised  by  the 
attorney  with  a  view  to  defeat  a  creditor  of  the  grantor, 
though  the  agreement  was  illegal,  yet  the  rule  prohibiting 
the  attorney  from  obtaining  any  unconscionable  advantage 
in  dealing  with  his  client  must  prevail,  and  the  attorney 
could  be  compelled  to  convey  the  land.1  And  where  the 
parties  to  a  conveyance  are  brothers,  the  grantor  being 
crippled  and  diseased  in  body,  weak  in  mind,  and  easily 
influenced,  and  under  the  control  of  the  grantee,  who  was 
a  person  vigorous  in  both  body  and  mind,  the  conveyance 
was  set  aside  at  the  suit  of  the  grantor,  it  appearing  that 
no  consideration  was  paid,  that  a  reconveyance  was  prom- 
ised, and  that  the  transfer  was  induced  by  operating  upon 
the  grantor's  fears  that  he  was  in  danger  of  losing  the 
property  by  reason  of  a  breach  of  promise  suit  which  had 
no  foundation  in  fact.2 


1  See  Boyd  v.  De  La  Montagnie,  4  to  leaving  the  son  gave  the  father 
T.  <fe  C.  (N.  Y.)  153;  Place  v.  Hay-  scant  security  for  the  liability.  W.,  a 
ward,  117  N.  Y.  496,  23  N.  E.  Rep.  25  ;  justice  of  the  peace,  was  employed  to 
Moore  v.  Jordan,  65  Miss.  232,  3  So.  draw  the  papers.  Thereafter  W.,  by 
Rep.  737  ;  Block  v.  Darling,  140  U.  S.  threats  to  the  effect  that  the  convey  - 
239,  11  S.  C.  Rep.  832.  ance  was  fraudulent  and  could  be  set 

2  Holliway  v.  Holliway,  77  Mo.  396,  aside,  persuaded  plaintiff  to  give  de- 
See  Cadwallader  v.  West,  48  Mo.  483  ;  fendants  a  mortgage  to  secure  a  debt 
Bradsbaw  v.  Yates,  67  Mo.  221  ;  Ford  of  the  son  which  the  father  was  under 
v.  Hennessy,  70  Mo.  581  ;  Ranken  v.  no  obligations  to  assume.  Ruger,  Ch. 
Patton,  65  Mo.  378;  Garvin  v.  Wil-  J.,  said:  "The  extent  to  which  the 
Hams.  44  Mo.  465  ;  Watkins  v.  Jones,  plaintiff  confided  in  the  defendant 
78  Hun  (N.  Y.)  496,  29  N.  Y.  Supp.  Wattles  is  clearly  shown  by  the  fact 
557;  Place  v.  Hayward,  117  N.  Y.  that  he  had  frequently  employed  him 
496,  23  N.  E.  Rep.  25.  In  Fisher  v.  in  business  transactions,  and  that  the 
Bishop,  108  N.  Y.  25,  29,  15  N.  E.  conveyances  which  he  then  threat- 
Rep.  331,  it  appeared  that  plaintiff,  ened  to  annul  and  overthrow  were 
ulio  was  much  advanced  in  years,  be-  drawn  by  him,  and  accepted  under 
came  involved  as  indorser  for  his  son,  his  advise  and  co-operation.  It  was 
who  failed  and  absconded.  Just  prior  a  gross  breach    of   good  faith  for  a 


§40i 


THE   CASES   JUST   CONSIDERED    EXCEPTIONAL. 


731 


§  401.  The  cases  just  considered  exceptional —The  practi- 
tioner, however,  must  be  careful  to  remember  that  the 
cases  just  considered  are  exceptions  to  a  well-defined  rule. 
While  it  is  possible  to  deduce  from  them  a  general  prin- 
ciple that  degrees  of  guilt  will  be  recognized  in  such  trans- 
actions, and  that  grantors  may,  in  certain  cases,  reclaim 
the  property  fraudulently  alienated  where  the  transaction 
was  superinduced  by  the  unfair  action  of  a  vendee  who 
occupied  some  relation  of  confidence  which  enabled  him 


person  thus  trusted,  and  who  had  by 
conducting  the  business,  vouched  for 
its  validity  and  lawfulness,  to  turn 
around  for  the  purpose  of  gaining  a 
personal  advantage,  and  assert  that 
he  had  been  engaged  in  an  illegal 
transaction,  which  he  could  at  his 
own  option  annul  and  destroy.  The 
case  shows  that  by  these  means  the 
defendants  have  obtained  security  for 
a  large  amount,  from  an  old  man 
who  was  under  no  legal  or  moral 
obligation  to  give  it,  and  without  any 
consideration  to  support  it  except  the 
nominal  one  of  a  dollar,  and  that 
this  was  extorted  at  a  time  when  he 
was  laboring  under  much  distress  and 
anxiety  of  mind,  on  account  of  the 
trouble  that  encompassed  him.  The 
parties  in  this  case  did  not  meet  on 
equal  terms,  and  the  defendant  took 
an  unfair  advantage  of  the  position  in 
which  the j'  had  been  placed,  and  of 
the  confidence  reposed  in  them  by  the 
plaintiff,  to  procure  from  him  a  val- 
uable security  to  which  they  had  no 
legal  right."  In  Block  v.  Darling,  140 
U.  S.  239,  11SC.  Rep.  832,  the  court 
says:  "Nor  did  the  court  below 
err  in  excluding  evidence  offered 
by  the  defendants  conducing  to 
show  that  the  money  claimed  by 
the  plaintiff  to  have  been  depos- 
ited with  them  to  be  paid  to  him  on 
his  order  was  so  deposited  with  the 
intent  to  cheat  and  defraud  his  cred- 


itors. The  evidence,  if  admitted, 
would  not  have  relieved  the  defend- 
ants from  responsibility  to  account  for 
it.  The  plaintiff's  suit  to  compel  the 
return  of  the  money  may  be  regarded 
as  one  in  disaffirmance  of  the  arrange- 
ment under  which  the  defendants 
claimed  to  have  received  it  ;  and,  if 
successful,  would  tend  to  defeat  the 
alleged  purpose  of  defrauding  his 
creditors  by  having  it  kept  upon  secret 
deposit  with  the  defendants.  It  is 
not  a  suit  to  recover  money  received 
and  paid  out  under  an  illegal  or  im- 
moral contract  which  has  been  fully 
executed.  The  suit  is  necessarily  a 
disavowal  upon  the  part  of  the  plain- 
tiff of  any  purpose  to  hide  this  money 
from  his  creditors.  To  allow  the 
defendants  to  retain  it  upon  the 
ground  that  he  had  originally  the  pur- 
pose to  conceal  it  from  his  creditors, 
would  be  inconsistent  with  the  spirit 
and  policy  of  the  law.  (Spring  Co.  v. 
Knowlton,  103  U.  S.  49,  58,  and 
authorities  there  cited.)  Besides,  the 
deposit  was  good  as  between  the 
parties.  The  defendants  do  not  rep- 
resent the  plaintiff's  creditors,  and  tin' 
latter  are  not  suing."  It  is  submitted 
that  a  tendency  is  reflected  in  this 
opinion  which  is  opposed  to  tin- 
general  current  of  decisions  and  that 
recoveries  upon  the  theory  indicated 
by  the  court  in  the  case  cited  should 
not  be  encouraged. 


732  THE   CASES   JUST   CONSIDERED    EXCEPTIONAL.  §401 

to  unduly  influence  the  vendor,  yet  a  very  clear  case  with 
well-defined  reasons  for  excepting  it  from  the  general 
rule  must  be  presented.  Debtors  contemplating  fraudu- 
lent alienations  should  draw  little  encouragement  from 
these  exceptional  cases,  for,  as  a  general  rule,  after 
passing  through  the  troubled  waters  of  insolvency,  they 
will  find  themselves  stripped  of  the  power  to  reach  or 
recover  the  secreted  property  in  the  hands  of  their 
fraudulent  grantees.  The  ancient  rule,  in  pari  delicto 
melior  est  conditio  possidentis}  is  not  to  be  easily  uprooted, 
and  must  not  be  considered  as  overthrown  or  abrogated 
by  these  cases.2  The  great  effort  has  been,  in  at  least  a 
portion  if  not  all  of  the  cases  just  considered,  to  show 
that  the  parties  were  not  in  pari  delicto  because  of  the 
reliance  and  confidence  placed  in  the  grantee,  especially 
when  he  assumed  to  advise  or  act  in  a  professional 
capacity,  or  occupied  a  position  where  he  could  exercise 
undue  influence  over  the  vendor.  In  Renfrew  v. 
McDonald,3  the  fraudulent  grantor,  seeking  to  set  aside 
a  conveyance  made  to  hinder  creditors,  was  summarily 
dismissed  on  the  opening  oral  statement  of  his  counsel. 
The  plaintiff  alleged  great  intimacy  with  and  confidence 
in  the  defendant,  and  charged  that  it  was  through  his 
influence  and  procurement  that  the  fraudulent  convey- 
ance had  been  made,  and  that  defendant  had  knowingly 
advised  plaintiff  that  he  had  no  defense  to  certain  notes, 
the  collection  of  which  plaintiff  sought  to  hinder  and 
delay  by  the  conveyance  in  question,  when  in  fact  a 
defense  did  exist.  The  court  said  :  "  Nothing  is  alleged 
by  way  of  excuse  for  the  attempted  fraud,  except  what 
might  be  with  more  or  less  truth  alleged  in  every  case. 
The  recipient  of  property  with  intent  to  defraud  creditors, 


1  Kirkpatrick  v.  Clark,  132  111.  347.  a  Cited    in     Pride    v.    Andrew,    51 

24  N.  E.  Rep.  71  :  Smith  v.  Hubbs,  10      Ohio  St.  405,  38  N.  E.  Rep.  84. 
Me.  71.  311  Hun  (N.  Y.)  255. 


§  40-  ENFORCING    FRAUDULENT    DEED. 


/  33 


possesses  the  intimacy  and  confidence  of  the  fraudulent 
debtor,  and  advises  the  attempted  fraud  and  consents  to 
be  made  the  instrument  thereof.  To  allow  the  grantor 
in  such  a  case  to  set  aside  the  grant  and  be  restored  to 
all  he  has  parted  with  for  the  illegal  purpose,  would  be  to 
afford  great  encouragement  to  future  attempts  of  that 
character."  In  Fredericks  v.  Davis,1  the  doctrine  is 
asserted  that  the  grantor  in  an  alleged  fraudulent  con- 
veyance, made  with  full  knowledge  of  the  facts,  is  estopped 
by  his  own  warranty  of  title  from  testifying  that  the  con- 
veyance is  fraudulent.2  This  doctrine  is  supported  by  the 
case  of  Phillips  v.  Wooster,3  wherein  the  court  says  : 
"The  position  which  the  plaintiff  occupies  in  relation  to 
the  transaction  complained  of  as  fraudulent,  excludes  him 
from  alleging  the  fraud,  or  claiming  any  benefit  against 
it.  The  conveyance  against  which  he  now  seeks  to 
derive  advantage  from  the  property,  was  made  by  him- 
self, with  a  full  knowledge  of  all  the  facts  as  they  existed 
at  the  time,  as  we  are  bound  to  presume  since  he  has 
shown  nothing  to  the  contrary.4  So  that  if  the  money 
paid  was  the  debtor's,  as  he  now  insists  it  was,  and  the 
conveyance  to  the  wife  therefore  fraudulent  as  against 
creditors,  it  was  not  fraudulent  as  against  him,  for  he 
was  not  only  consenting  to  the  act,  but  himself  per- 
formed it." 

§  402.  Grantee  enforcing  fraudulent  deed. — The  rule  being 
established  that  the  courts  will  not  interfere  to  set  aside  a 
fraudulent  executed  contract  as  between  the  parties,  it  has 


'3  Mont.  251.   '  751,    42   JN.    W.  Rep.    566;    Rozell    v. 

2  Compare    Dodge    v.    Freedman'e  Vansyckle,  11  Wash.  79,  39  Pat.  Rep. 

Sav.    &  Trust  Co.,  93  U.  S.  383  ;  Pitts  270  ;  Harper  v.  Harper,  85   Ky.  160, 

v.    Wilder,    1    N.    Y.   525  ;    Gates   v.  3  S.  W.  Rep.  5. 

Mowry,  15  Gray  (Mass.)  564  ;  Harvey  3  36  N.  Y.  414. 

v.  Varney,  98  Mass.  118;  Watkins  v.  "Citing  Grant    v.   Morse.   22   N.  Y. 

Jones,  78  Hun  (N.  Y.)  496,  29  N.  Y.  323. 
Supp.  557  ;  Wiley  v.  Carter,  77  Iowa 


734 


ENFORCING    FRAUDULENT   DEED.  §  402 


been  contended  that  the  same  principle  would  preclude 
the  grantee  both  from  enforcing  his  apparent  right  to  the 
possession  of  the  land  under  the  deed,  and  from  collecting 
the  rents  or  damages.1  A  consideration  of  the  reason 
and  policy  of  the  rule,  however,  led  the  courts  to  hold 
otherwise.  It  is  considered  a  mistake  to  suppose  that  the 
parties  being  in  pari  delicto,  the  court  would  refuse  the 
grantee  all  remedy.  The  deed  as  between  the  parties  is 
perfectly  good.  The  grantor,  by  a  stern  but  necessary 
policy  of  the  law,  is  excluded  from  presenting  the  proof 
which  would  show  the  fraud.  He  is  in  this  respect  the 
actor;  his  fraud  silences  and  estops  him  from  averring 
against  his  deed.2  The  rule  operates  only  in  cases  where 
the  refusal  of  the  court  to  aid  either  party  frustrates  the 
object  of  the  transaction,  and  destroys  one  of  the  tempta- 
tions to  enter  into  contracts  violating  the  policy  of  the 
law.3  To  permit  the  grantor,  when  sued  by  the  grantee, 
to  plead  the  mutual  fraud  of  the  parties,  in  order  to 
enable  him  to  avoid  the  effect  of  the  deed  by  being  per- 
mitted to  remain  in  possession  of  the  property  without 
the  payment  of  rent  or  damages,  would  virtually  be  per- 
mitting him  to  reap  the  reward  of  his  own  iniquity  since 
he  was  the  real  actor  in  the  fraud,  and  would  tend  to 
encourage  others  to  violate  the  law,  with  the  hope  of 
profiting  by  committing  frauds  upon  their  creditors.  It 
would  nullify  the  rule.4  There  is  a  distinction  between 
an  executed  and  an  executory  fraudulent  contract.  As 
to  the  latter  the  court,  where  the  parties  are  equally 
participants  in   the  fraud,  in  pari  delicto,  will  leave  them 


1  Peterson    v.  Brown,  17  Nev.  176,  4   Rand.   (Va.)  372.    See  Cushwa  v. 

30  Pac.  Rep.  697.  Cushwa,     5     Md.    52  ;     Murphy     v. 

2Broughton  v.  Broughton.  4  Rich.  Hubert,  16  Pa.  St.  57. 
Law    (S.    C.)    497.     See   Bonesteel  v.  *  Murphy  v.  Hubert,  16  Pa.  St.  57; 

Sullivan,  104  Pa  St,  9.  Peterson   v.   Brown,  17  Nev.  177-179, 

3  Peterson  v.    Brown,    17  Nev.  177,  30  Pac.  Rep.  697. 
30  Pac.  Rep.  697 ;  Starke  v.  Littlepage, 


§  403  FRAUD    UPON   A    DEBTOR.  735 

in  the  predicament  where  they  place  themselves,  refusing 
any  relief  or  interference.  And  where  the  contract  is 
executed,  as  by  a  deed  transferring  the  title,  the  court 
acts  upon  the  same  principle,  declining  either  to  cancel 
the  deed  or  restore  the  title.  But  the  effect  is  very 
different ;  in  one  case  a  specific  performance  will  be 
refused ;  in  the  other  the  fraudulent  grantee  remains 
owner  of  the  estate  as  against  the  grantor,  and  all  the 
world,  except  the  defrauded  creditors.1  In  Stillwell  v. 
Stillwell,2  the  court  said:  "  Whether  the  appellant's  title 
was  fraudulent  or  not,  was  of  no  consequence  in  the 
present  case.  Admitting,  as  has  been  admitted,  that  the 
appellant's  title,  as  derived  from  her  husband,  was  void  at 
the  instance  of  creditors,  that  fact  did  not  prevent  her 
from  setting  up  in  a  court  of  equity,  that  either  her  hus- 
band or  some  one  else  had,  by  fraud,  got  the  title  from 
her.  To  hold  otherwise  would  be  to  lay  down  the 
doctrine  that  the  holder  of  one  of  these  surreptitious 
titles  was,  with  respect  to  it,  put  out  of  the  protection  of 
the   law.      There   is  no  such  principle  of  law  or  equity." 

§  403,  Fraud  upon  a  debtor  as  distinguished  from  fraud 
upon  creditors. —  Fraud  practiced  by  a  third  party  upon  a 
debtor  is  manifestly  a  different  thing  from  fraud  upon 
creditors,  and  it  may  well  be  doubted  whether  a  creditor 
can  seize  property  the  title  to  which  has  passed  to  a  third 
party,  or  attack  such  a  conveyance  where  the  creditor 
proceeds  upon  the  ground  that  the  purchaser  committed 
a  fraud  upon  the  seller  which  entitled  the  latter  to  avoid 
the  sale.  In  Garretson  v.  Kane,3  the  court  used  these 
words  :  "  A  creditor  cannot  redress  all  the  wrongs  done 
to  his  debtor.  He  cannot  claim  damages  for  a  trespass 
or  for  a  deceit.  A  fraud  like  that  offered  to  be  proved  in 
this  case   would  entitle  the  seller  to   relief  in  a  court  of 


1  Walton  v.  Tusten,  49  Miss.  576.  3  27  N.  J.  Law  211 . 

2  47  N.  J.  Eq.  278,  20  Atl.  Rep.  960. 


7 $6  DECLARING    DEED    A    MORTGAGE.  §  404 

equity  upon  proper  terms,  and  possibly  a  creditor  may 
have  relief  there;  but  he  cannot  step  in  and  claim  that 
such  a  sale  was  absolutely  void  at  law.  If  he  can  inter- 
fere at  all  his  rights  will  be  the  same  as  those  of  his  debtor. 
.  .  .  .  A  creditor  who  seeks  to  avoid  a  sale  as  fraudulent 
against  him,  does  not  represent  his  debtor,  but  exercises 
rights  paramount  to  his.  There  is  in  truth,  no  similarity 
between  [the]  two  kinds  of  fraud.  In  the  one  case  it  is, 
either  in  fact  or  in  law,  the  fraud  of  the  debtor  himself, 
while  in  the  other  the  debtor  is  the  victim,  and  guilty  of 
no  wrong.  A  case  may  occur  combining  both  descrip- 
tions of  fraud."1  It  will  be  at  once  apparent  that  this 
element  of  the  law  enters  largely  into  the  cases  in  which 
the  debtor  or  grantor  has  a  standing  to  attack  or  avoid 
his  own  transfer. 

§404.  Declaring  deed  a  mortgage.  — As  is  elsewhere 
stated,  an  absolute  conveyance  may  be  shown  to  be  a 
mortgage.2  The  theory  of  the  decisions  is  that  dealings 
between  the  borrower  and  the  lender  of  money,  or  debtor 
and  creditor,  conducted  by  requiring  an  absolute  deed  for 
security,  and  a  renunciation  of  all  legal  right  of  redemption 
are  so  significant  of  oppression,  and  so  calculated  to  invite 
to  or  result  in  wrong  and  injustice  on  the  part  of  the  stronger 
toward  the  weaker  party  in  the  transaction,  as  in  them- 
selves to  constitute  a  quasi  fraud  against  which  equity 
ought  to  relieve,  as  it  does  against  the  strict  letter  of  an 
express  condition  of  forfeiture.  The  grounds  of  relief 
being  purely  equitable,  it  may  and  should  be  refused  if 
the  equitable  considerations  upon  which  it  rests  are  want- 

1  See  Graham    v.   Railroad  Co.,  102  2  Campbell  v.  Dearborn,    109  Mass. 

U.  S.  148.     Compare  Eaton  v.  Perry,  130:    Carr    v.    Carr,  52   N.    Y.    251; 

29  Mo.  96  ;  Prosserv.  Edmonds.  1  Y.  Stevens  v.  Wiley,  165  Mass.  406,  43  N. 

&    C.    481  ;    French    v.    Shotwell,    5  E.  Rep.  177  ;  Minchin  v.  Minchin,  157 

Johns.    Ch.  (N.   Y.)   555 ;  Crocker  v.  Mass.   265,  32   N.  E.    Rep.    164.     See 

li.-llangee,  6  Wis.  645  ;  Hovey  v.  Hoi-  §  238. 
comb,      11     111.    660  ;      McAlpine    v. 
Sweetzer,  76  Ind.  78. 


§  404^  MORTGAGED  PROPERTY.  737 

ing.  Therefore  an  absolute  deed  made  by  a  debtor  to 
one  creditor,  with  the  intention  to  defraud  other  creditors, 
will  not  be  adjudged  an  equitable  mortgage  at  the  solici- 
tation of  the  debtor.  Fraud  against  creditors  cannot  be 
set  up,  it  is  true,  by  any  one  not  standing  upon  the  rights 
of  a  defrauded  creditor  to  defeat  any  legal  claim  or  inter- 
est which  'the  fraudulent  debtor  may  seek  to  enforce. 
But  such  a  party  is  in  no  condition  to  ask  a  court  of 
equity  to  interfere  actively  in  his  behalf,  to  secure  to  him 
the  fruits  of  his  fraudulent  devices.  One  who  comes  for 
relief  into  a  court  whose  proceedings  are  intended  to 
reach  the  conscience  of  the  parties,  must  first  have  that 
standard  applied  to  his  own  conduct  in  the  transactions 
out  of  which  his  grievance  arises.  If  that  condemns  him 
he  cannot  insist  upon  applying  it  to  the  other  party. * 

§  404a.  Redeeming  mortgaged  property.  —  The  courts 
will  not  seek  to  enlarge  the  scope  or  legal  effect  of  a 
transaction  that  is  tainted  with  a  design  to  defraud 
creditors.  Hence  where  property  is  pledged  or  mort- 
gaged by  a  debtor  the  pledgor  or  mortgagor  will  be  per- 
mitted to  redeem  it  though  the  design  to  defraud 
creditors  may  have  been  present  in  his  mind  when  the 
pledge  was  made  or  the  loan  procured.  Such  a  trans- 
action does  not  in  itself  purport  to  vest  an  absolute  title 
in  the  pledgee  or  mortgagee,  and  the  courts  will  not 
strive  to  enlarge  or  vary  its  operation  merely  to  inflict 
punishment  upon  a  fraudulent  debtor  by  cutting  off  the 
right  to  redeem.2  Another  illustration  may  be  cited.  In 
Gowan  v.  Gowan  3  it  was  expressly  decided  that  where  a 
debtor  deposits  personal  property  with  a  bailee  to  protect 
it  from  creditors,  the  bailee  cannot  defeat  the  debtor's 
action  to  recover  the  property  by  setting  up  the  fraud. 

1  Hassam  v.  Barrett,  115  Mass.  256,  2  See  Smith  v.  Quart/.  Mining  Co., 

258;  Brown  v.  Reilly,  72  Md.  489,  20  14  Cal.,  242  :  Taylor  \.  Weld,  ■">  Mass. 

Atl.    Rep.    239;    but  see  Halloran  v.  109, 116;  Jones  v.  Rahilly,  16 Minn.  320. 

Halloran,  137  111.  100,  27  N.  E.  Rep.  82.  330  Mo.  472. 
47 


CHAPTER  XXVII. 


JURISDICTIONAL  QUESTIONS  —  CONCLUSION. 


§  405.  Jurisdiction  beyond  State  bound- 
aries. 
406.  Outside  county  of  defendant's 
residence. 


§  407.  Appeal   to    United    States  Su- 
preme Court — Uniting  claims. 
407a.  Certificate  of  division. 


§  4°5-  Jurisdiction  beyond  State  boundaries. —  A  few  gen- 
eral observations  will  bring  the  discussion  to  a  close. 

Parties  conducting  litigations  for  creditors  may  be 
reminded  that  the  courts  of  one  State  cannot  entertain 
jurisdiction  of  an  action  to  recover  lands  lying  in  another 
State,  where  the  proceeding  is  in  rem?  for  actions  for  the 
recovery  of  real  property,  or  for  the  determination  of  an 
interest  therein,  are  local  and  must  be  brought  in  the 
State  and  county  where  the  premises  are  situated.2  But 
where  the  court  has  jurisdiction  of  the  proper  parties,  it 
may,  by  its  judgment  or  decree,  as  we  have  seen,  compel 
them  to  do  equity  in  relation  to  lands  located  without  its 
jurisdiction.  The  court  in  such  case  acts  in  personam? 
and  may  compel  a  specific  performance  of  a  contract  for 
the  sale  of  land  beyond  the  borders  of  the  State,4  or  a 
conveyance  of  lands  outside  the  State  jurisdiction  when 


1  Gardner  v.  Ogden,  22  N.  Y.  333. 

'  Sedgwick  &  Wait  on  Trial  of  Title 
to  Land  2d,  ed.,  §  465,  and  cases  cited. 
See  American  Union  Tel.  Co.  v.  Mid- 
dleton,  80  N.  Y.  408  ;  Blake  v.  Free- 
man. 13  Me.  130.  Foreign  statutes 
have  no  force  ex  proprio  vigore,  but 
the  title  of  a  foreign  assignee  may  be 
recognized  by  comity  if  this  can  be 
done  without  injustice  to  home  citi- 
zens.    Matter  of  Waite,  99  N.  Y.  433. 


s  Gardner  v.  Ogden,  22  N.  Y.  333 ; 
Arglasse  v.  Muschamp,  1  Vera.  75  ; 
Penn  v.  Lord  Baltimore,  1  Ves.  Sr. 
444;  Paschal  v.  Acklin,  27  Tex.  173; 
Dale  v.  Roosevelt,  5  Johns.  Ch.  (N.  Y.) 
174;  Newton  v.  Bronson,  13  N.  Y. 
587  ;  Sutphen  v.  Fowler,  9  Paige's  Ch. 
(N.  Y.)  280 ;  Great  Falls  Mfg.  Co.  v. 
Worster,  23  N.  H.  462. 

4  Newton  v.  Bronson,  13  N.  Y.  587. 


§  4°6  defendant's  residence.  739 

the  title  has  been  fraudulently  obtained  by  a  defendant  ; ] 
and  a  debtor  may  be  compelled  to  convey  lands  in 
another  State  for  the  benefit  of  creditors,  so  as  to  vest 
in  the  grantee  the  legal  title.3  So  the  court  has  power 
to  decree  the  cancellation  of  a  void  mortgage  which  is  an 
apparent  lien  and  cloud  upon  property  beyond  the  jur- 
isdiction of  the  court.  "This  power,"  says  Johnson,  J., 
"  has  been  frequently  exercised  to  compel  parties  to  per- 
form their  contracts  specifically,  and  execute  conveyances 
of  lands  in  other  States,  and  also  to  set  aside  fraudulent 
conveyances  of  lands  in  other  States."8  "Where  the 
necessary  parties  are  before  a  court  of  equity,"  said 
Swayne,  J.,  "  it  is  immaterial  that  the  res  of  the  contro- 
versy, whether  it  be  real  or  personal  property,  is  beyond 
the  territorial  jurisdiction  of  the  tribunal.  It  has  the 
power  to  compel  the  defendant  to  do  all  things  necessary, 
according  to  the  lex  loci  rei  sitcz,  which  he  could  do  vol- 
untarily, to  give  full  effect  to  the  decree  against  him."4 
Without  regard  to  the  situation  of  the  subject-matter, 
such  courts  consider  the  equities  between  the  parties, 
and  enforce  obedience  to  their  decrees  by  process  in 
personam? 

The  law  of  the  domicile  of  the  owner  governs  the 
validity  of  a  transfer  of  personal  property. 6 

§  406.  Outside  county  of  defendant's  residence. —  In  a  case 
which  arose  in  Georgia,7  it  appeared  that  the  constitution 
and  laws  of  that  State  required  that  suits  must  be  brought 
in  the  county  in  which  the  defendant  resided,  and  it  was 


1  Gardner  v.  Ogden,  22  N.  Y.  827.  6  Miller    v.    Sherry,    2    Wall.    249  ; 

*  Bailey  v.  Ryder,  10  N.  Y.  363.  Mitchell  v.   Bunch,   2  Paige   (N.  Y.) 
'  Williams  v.  Ayrault,  31  Barb.  (N.  606. 

Y.)  364,  368.  6  Barth    v.  Backus,   140  N.  Y.  230, 

*  Phelps  v.  McDonald,  99  TJ.  S.  308  ;  35  N.  E.  Rep.  425. 

Municipal  Investment  Co.  v.  Gardiner,  7  Taylor  v.  Cloud,  40  Ga.  288.     See 

62  Fed.   Rep.   956 ;  Hart  v.  Sansom,  Johnson  v.  Griffin,  80  Ga.  553,  7  S.  E. 

110  U.  S.  151,  3  S.  C.  Rep.  586.  Rep.  94. 


740  UNITING   CLAIMS.  §  407 

held  that  it  was  good  ground  of  demurrer  to  a  bill  in 
equity  to  set  aside  a  fraudulent  conveyance  of  land  that 
it  was  not  filed  in  the  county  of  the  defendant's  residence. 
The  defect  was  held  not  to  be  cured  by  the  fact  that  the 
bill  was  filed  in  the  county  where  the  land  was  situated, 
or  because  a  lessee  of  the  defendant  in  possession  of  the 
property  was  a  party  to  the  bill,  when  no  substantial 
relief  was  sought  against  such  tenant.1  This  is  exceptional 
practice,  for,  at  least  so  far  as  realty  is  concerned,  the 
action  to  set  aside  a  conveyance  would  be  local,  and  local 
actions  should  be  brought  in  the  county  where  the  land 
lies.2 

In  Missouri  a  judgment-creditor  who  acquires  title  to 
land  situated  in  different  counties,  by  purchase  at  sheriff's 
sale,  may  bring  a  single  action  to  set  aside  conveyances 
made  by  the  debtor  to  a  single  person.  Separate  suits 
in  each  county  need  not  be  brought.3 

$  407,  Appeal  to  United  States  Supreme  Court—  Uniting 
claims. —  When  judgment-creditors  join  in  a  suit  to  set 
aside  a  fraudulent  conveyance  by  their  debtor,  and  the 
amounts  found  due  to  the  creditors  respectively  are  less 
than  the  jurisdictional  limit  of  the  United  States  Supreme 
Court,  the  several  claims  cannot  be  united  to  give  juris- 
diction on  appeal.4  In  Seaver  v.  Bigelows,5  Nelson,  J., 
said  :   "  The  judgment-creditors   who   have  joined  in  this 


1  See  Smith  v.  Bryan,  34  Ga.  53.  U.  S.  42,  12  S.  C.  Rep.  364  ;  Busey  v. 
See  Caswell  v.  Bunch.  77  Ga.  505.  Smith,    67  Fed.    Rep.   13  ;  Putney  v. 

2  Sedgwick  &  Wait  on  Trial  of  Title  Whitmire,  66  Fed.  Rep.  386.  See 
to  Laud,  3ded.,  §465;  Augusta  Sav.  Fourth  National  Bank  v.  Stout,  113 
Bank  v.  Stelling,  31  S.  C.  360,  9  S.  E.  U.  S.  681,  5  S.  C.  Rep.  695  ;  Hawley 
Rep.  1023.  v.   Fairbanks.   108  U.   S.  548,  2  S.  C. 

3  Lindell  Real  Estate  Co.  v.  Lin-  Rep.  846  ;  Ex  parte.  Phoenix  Ins.  Co., 
dell,  133  Mo.  394,  33  S.  W.  Rep.  466.  117  U.  S.  369,  6  S.  C.  Rep.  772  ;  Tup- 

1  Schwed    v.   Smith,  106  U.  S.  188;  per   v.   Wise,    110  U.   S.   398,  4  S.  C. 

Gibson  v.  Shufeldt,  122  U.  S.  27,  7  S.  Rep.  26  :  Stewart  v.  Dunham,  115  U. 

C.  Rep.  1066  ;    Davis  v.  Schwartz,  155  S.  61,  5  S.  C.  Rep.  1163. 
U.    S.   647,  15   S.  C.  Rep.   237;  New  5  Wall.  203:    Hunt  v.  Bender,  154 

Orleans  Pac.  Ry.  Co.  v.   Parker,  143  U.  S.  556,  14  S.  C.  Rep.  1163. 


§  407a  CERTIFICATE   OF   DIVISION.  74 1 

bill  have  separate  and  distinct  interests  depending  upon 
separate  and  distinct  judgments.  In  no  event  could  tin- 
sum  in  dispute  of  either  party  exceed  the  amount  of  their 

judgment The    bill     being    dismissed    each    fails 

in  obtaining  payment  of  his  demands.  If  it  had  been 
sustained,  and  a  decree  rendered  in  their  favor,  it  would 
only  have  been  for  the  amount  of  the  judgment  of  each." 
In  Schwed  v.  Smith  x  the  same  court  held  that  if  the 
decree  was  several  as  to  creditors  it  was  difficult  to  see 
why  it  was  not  also  several  as  to  their  adversaries,  the 
theory  being  that  although  the  proceeding  was  in  form 
but  one  suit,  its  legal  effect  was  the  same  as  though 
separate  suits  had  been  instituted  on  each  of  the  separate 
causes  of  action.3 

§  407a.  Certificate  of  division. — Whether  a  sale  and  deliv- 
ery of  a  debtor's  stock  of  goods,  by  way  of  preference  of 
a  bona  fide  creditor,  is  fraudulent  against  other  creditors, 
involves  a  question  of  fact,  depending  upon  all  the  circum- 
stances and  cannot  be  referred  to  the  United  States 
Supreme  Court  by  certificate  of  division  of  opinion.3 

This  closes  the  discussion.  We  have  traced  the  famous 
statute  of  Elizabeth  from  its  enactment  to  the  present 
time,  and  have  seen  how  important  the  place  it  fills  has 
become  in  our  jurisprudence.  Twyne's  case  is  still  a 
great  land-mark  in  this  branch  of  the  law.  The  volume 
of  litigation  engendered  by  covinous  alienations  is  scarcely 
creditable  to  the  integrity  of  our  people.  The  ability  of 
the  courts  to  successfully  grapple  with  fraudulent  debtors 
and  purchasers  in  bad  faith,  without  the  coercive  aid  of 
imprisonment,  in  view  of  the  growth  of  statutory  exemp- 
tions and  spendthrift  trusts,  frequently  becomes  a  matter 


1  106  U.  S.  188,  1  S.  C.  Rep.  221.  3  Jewell  v.  Knight,    L23  U.  S.  426, 

2  See   Ex  parte  Baltimore  &  O.  R.      8  S.  C.  Rep.  L93.     Compare  Graver  v. 
R.  Co.,  106  U.  S.  5,  1  S.  C.  Rep.  35.  Faurot,  162  U.  S.  435, 16  S.  C.  Rep.  136. 


742  CONCLUSION.  §  407a 

of  grave  doubt.  Hence  it  is  that  the  existence  of  cases 
accomplishing  results  like  those  of  Cutting  v.  Cutting,1 
and  Broadway  Bank  v.  Adams,3  is  to  be  so  deeply 
deplored.  That  the  law  formulating  the  rights  and  regu- 
lating the  remedies  of  creditors  against  covinous  convey- 
ances and  for  the  conversion  of  equitable  assets  is  develop- 
ing in  the  right  direction,  and  becoming  more  effectual 
against  the  debtor  class  is  claimed  in  some  directions.  It 
is  still,  however,  in  an  unsatisfactory  condition.  The 
many  forms  in  which  a  debtor's  assets  can  be  secreted  or 
spirited  away,  and  his  income  protected,  and  the  endless 
varieties  of  fraudulent  devices,  render  the  solution  of  the 
problem  a  matter  of  extreme  difficulty.  Time  and 
experience  alone  can  work  out  a  satisfactory  conclusion. 
The  development  must  of  necessity  be  in  the  courts,  and 
there  is  need  that  the  pendulum  should  swing  to  the 
creditor's  side  ;  we  doubt  the  ability  of  the  legislative 
power  to  further  materially  progress  this  branch  of  our 
law. 

1  See  §  40.  2  See  §  367. 


INDEX. 

\References  are  to  sections^ 


ABANDONED  exemptions,  50. 

creditors  may  seize,  50. 

rule  applies  to  homestead,  50. 
ABOLITION  of  imprisonment,  2. 

cause  of  fraudulent  transfers,  2. 

effect  upon  remedies,  2. 

restricts  creditors'  rights,  2,  407a. 
ABSCONDING  and  non-resident  debtors,  84. 

remedies  against,  84. 

policy  of  the  different  States,  84. 
ABSENCE  of  means  in  vendee,  241,  274. 
effect  of  proof  of,  241,  274. 
general  reputation  as  to  means,  admissible,  274. 

of  presumptions  of  fraud,  5,  6,  224. 
ACCOUNT  BOOKS,  as  evidence,  271a. 
ACCOUNTING,  by  fraudulent  vendee  to  debtor,  176. 

effect  of,  176. 

vendee  need  not  account  second  time,  176. 

for  rents,  26,  176. 

for  improvements,  26. 

judgment  on,  51,  176. 
ACCUSED  person,  may  testify  as  to  intent,  205  ?i. 
ACQUIESCENCE.     See  Ratification. 

by  laches,  148,  287. 

estoppel  by,  91. 
ACTION,  alienation  pending,  157. 
ACTION  AT  LAW.     See  Creditors'  Remedies  —  Complainants. 

creditors  may  proceed  by  execution,  59. 

treat  transfer  as  nullity,  59. 

does  not  interfere  with  remedy  in  equity,  60. 

advantages  of  suit  in  equity  over,  60. 
ACTIONS,  ex  delicto,  bill  of  particulars  allowed  by  grace,  162a. 


744  References]        INDEX.        [are  to  sections. 

ACTS  speak  louder  than  words,  8,  196. 

done  or  omitted,  8,  8  n. 
ACTUAL  motive  or  intent,  when  unimportant,  9,  10,  197,  322,  382. 
ACTUAL  AND  CONSTRUCTIVE  FRAUD,  60,  192. 

distinction  between,  as  regards  reimbursement,  192. 

fraud  in  fact  defeats  reimbursement,  192. 

the  principle  discussed,  192. 

change  of  possession  required,  253. 

intent  not  decisive,  10,  197,  322,  382. 
ACTUAL  NOTICE,  372,  389. 

See  Notice. 
ADJUDICATION,  of  debt,  74,  74  n. 
ADMEASUREMENT,  dower  before,  available  to  creditors,  2,2,. 

reached  in  supplementary  proceedings,  61. 
ADMINISTRATORS,  as  complainants,  112,  113. 

as  defendants,  136,  136  n. 

conveyance  binding  upon,  112,  113,  398. 

rule  in  New  York,  112. 

may  sue  for  cancelled  debt,  42. 
ADMITTED  facts  in  pleading,  285. 

cannot  be  contradicted,  285. 
ADVANCES,  future,  217. 

ADVERSE  POSSESSION,  as  defense  to  suit,  292. 
AFFIRMANCE,  of  common  law,  statute  of  Elizabeth,  16. 
AFFIRMATIVE,  relief,  rule  as  to,  166. 

statute  does  not  repeal  common  law,  16. 

proof  of  deceit,  5. 
AGENT,  husband  as,  for  wife,  303. 

fraud  of,  affects  principal,  198. 

knowledge  and  notice  must  be  clear,  198. 
AGREEMENT  to  prefer,  validity  of,  390,  394. 
AID,  when  extended  to  grantors,  399,  400. 

See  Existing  Creditors,  Subsequent  Creditors. 
AIDING  DESCRIPTION,  by  evidence,  157. 

attachment  by  injunction,  53. 
ALABAMA,  creditor  without  judgment  may  file  bill,  73  ",  y5- 

joinder  of  claims,  85,  108. 

debt  must  be  due,  73  n. 

as  to  change  of  possession,  250. 

spendthrift  trusts,  367a. 

personal  representative  may  file  bill,  113  n. 
ALIENATION,   restraints  upon,    14,  361,  362. 
See  Spendthrift  Trusts. 


References^        INDEX.         [are  to  sections.  745 

ALIENATION  —  continued. 

property  susceptible  of  fraudulent,  23. 

aversion  to  restraints  upon,  360,  362. 

English  and  American  cases  concerning,  361  n. 

claims  prior  and  subsequent  to,  105. 

pending  suit,  157. 

doctrine  of  lis  pendens,  157. 
ALIMONY,  conveyance  to  defeat,  no  n. 

may  be  avoided,  no  ;/. 

receiver  for  collection  of,  188. 

reaching  trust  income,  45. 

no  injunction  to  hold  land  subject  to,  52. 
ALIUNDE  evidence  of  fraud,  236. 
ALLEGING  insolvency,  143. 

fraud,  141. 

conspiracy  generally,  insufficient,  141. 

consideration,  144. 

See  Complaint. 
ALLOWANCE,  for  improvements,  192  n,  193  n. 

for  wife,  may  be  reached  by  her  creditors,  22. 

to  fraudulent  vendee,  176. 
ALTERING  MORTGAGE,  effect  of,  347. 
ALTERNATIVE  RELIEF,  when  extended,  153. 

cumulative  remedies,  65. 
AMENDMENT  OF  COMPLAINT,  83,  156. 

as  to  description,  156. 

as  to  statement  of  value,  156. 

rule  as  to  permitting,   156. 

of  pleading,  discretionary,  156. 
AMERICAN,  devise,  assignments  claimed  to  be,  316. 
AMOUNT,  of  settlement,  306. 

of  consideration,  207,  223. 
ANCESTOR'S  DEED,  not  impeached  by  heir,  121. 
ANCIENT  LAWS,  against  insolvents,  1,  1  n. 
ANCIENT  POWER,  of  creditors,  1,  1  n. 
ANCIENT  PRACTICE,  as  to  necessity  of  judgment,  85. 
ANCILLARY  RELIEF,  by  equity,  60. 

collateral  to  maintain  action,  63. 

discovery  as,  147. 
ANDERSON  v.  BLOOD,  change  in  the  law,  376a. 
"AND  OTHERS,"  meaning  of,  110. 

who  embraced  in,  no. 

claimant  of  alimony,  no  n. 


J '46  References'^        INDEX.         [are  to  sections. 

ANNUITIES  may  be  reached,  24,  45. 
ANOTHER  ACTION,  pending,  2860. 
ANSWER  OR  PLEA,  158-167. 
(1.)   Generally,   158. 

accepted  as  true,  when,  158,  159,  160. 

fraud  not  presumed,  5,  6,  158. 

affirmative  defense,  158. 

inconsistent  defenses,  158. 

facts  attacking  title,  158. 

allegations  of  knowledge  or  notice,  158. 

bill  of  particulars,  162a. 

denying  fraud  or  notice,  163. 

overcoming  denial  in,  159. 

as  evidence,  159,  159  n,  160. 

admission  and  avoidance,  164. 

evidence  of  witness  against,  160. 

receiver  before,  184. 
(2.)  Pleading  to  discovery  and  relief ,  161. 

rules  as  to,  161. 

particularity  of  denial  in,  162. 

avoiding  discovery,  165. 
(3.)   Affirmative  relief,  166. 

must  be  claimed  in  answer,  166. 

what  accomplished  by,  166. 
(4.)    Verification,  167. 

pleadings  usually  verified,  167. 

waiver  of  verification,  167. 

sworn  answer  taken  as  true,  160. 
ANTECEDENT  agreement  to  prefer,  342a,  394. 

creditors,  sharing  with  subsequent,  104. 
ANTEDATING  instrument,  badge  of  fraud,  229. 
ANTE-NUPTIAL    SETTLEMENT,    marriage    as    consideration, 
212,  306. 

fraud  in,  302. 
ANTICIPATING  income  by  assignment,  367. 
APPARENT  FAIRNESS,  will  not  save  transaction,  241. 
APPARENT  LACHES,  excusing,  148. 
APPARENT  OWNERSHIP,  rights  acquired,  287. 
APPELLATE  TRIBUNAL,   objection   to  jurisdiction  in,  88,  88  ;/. 
APPOINTMENT  of  receiver,  in  judgment,  170. 

in  supplementary  proceedings,  61,  116. 

of  corporation,  117. 

contests  over  realty,  187. 


References].        INDEX.         [are  to  sections.  74-7 

APPOINTMENT  —  continued. 
to  collect  alimony,  188. 
of  various  interests,  188. 
when  matter  of  course,  184. 
in  foreclosure,  187  n. 

See  Receiver. 
ARKANSAS,  change  of  possession,  250. 

trust  income,  367a. 
ARREST   OF   DEFENDANT,  191. 
rule  in  New  York,  191. 

actual  intent  to  defraud  must  be  shown,  191. 
constructive  fraud  insufficient,  191. 
of  partner,  191. 

lex  fori  governs  right  to,  64,  191. 
ARTICLES  OF  SEPARATION,  310. 

become  voluntary  settlement  upon  reconciliation,  310. 
ASSAULT,  claims  for,  cannot  be  reached,  34. 
claims  do  not  pass  to  assignee,  316a. 
alienations  to  avoid  demands  for,  22. 
ASSENT,  of  assignee,  316^. 
ASSERTIONS  OF  GOOD  FAITH,  inconclusive,  8. 

See  Bona  Fide  Purchasers. 
ASSETS,  available  to  creditors,  23-42. 

membership  of  stock  exchange  constitutes,  35. 

tangible  property  may  be  reached,  24. 

expectant  estate,  24,  29. 

products  of  land,  24. 

promissory  notes,  24. 

bank  bills,  24. 

money,  24. 

improvements,  rents,  and  profits  are,  26. 

crops  constitute,  27. 

exceeding  liabilities  in  assignments,  340. 

property  substituted  or  mingled,  28. 

estates  in  remainder  or  reversion,  29. 

equitable  interests,  30. 

equity  of  redemption,  31. 

reservations,  32,  272. 

of  corporation,  trust  fund,  117,  119,  139. 

chosss  in  action,  33. 

trade-marks,  36. 

book  royalties,  37. 

patent  rights,  24,  38. 


748  References]        INDEX.         \_are  to  sections. 

ASSETS  —  continued. 

powers,  39,  40. 

promises  of  third  parties,  43. 

income  of  trust  estate,  45,  360,  364,  366. 

intentional  omission  of,  345. 

pursuit  of,  when  corporation  changes  name,  119. 

squandering,  by  directors,  119. 
What  are  not  assets. 

exempt  property,  46-50,  365. 

gifts  of  small  value,  41. 

powers,  in  New  York,  40,  368a. 

powers,  in  Pennsylvania,  368a. 

claims  for  torts,  34. 

income  of  trust  estate,  360-368. 

talents  or  industry,  50^. 

payments  made  to  a  debtor,  50^. 
ASSIGNED  PROPERTY,  value  as  affecting,  23. 
ASSIGNEE.     See  Fraudulent  General  Assignments. 

gets  title  to  trade-marks,  36. 

property  transferred  to,  316a. 

may  sue  in  replevin,  316a. 

not  an  officer  of  the  court,  316. 

control  of  courts  over,  316. 

general,  rights  of,  as  complainant,  92,  115. 

attacks  fraudulent  conveyances  in  New  York,  115. 

in  bankruptcy,  as  complainant,  114. 

title  of,  35,  36,  114,  115,  364. 

may  sue  carrier,  316a. 

exempting  from  liability,  334. 

authority  of,  to  compromise,  336. 

fraud  of,  337. 

innocent,  rights  of,  319. 

ignorance  or  incompetency  of,  as  badge  of  fraud,  338. 

as  defendant,  133. 

assignor  cannot  substitute  successor  for  assignee,  316. 

rights  and  duties  of,  319a. 

not  personally  liable,  319^. 

must  exercise  ordinary  prudence,  319^. 

in  bankruptcy,  as  complainant,   114. 

represents  creditors,  114,  115. 

property  reverts  after  discharge,  114. 

discharge  of,  114. 

reaching  fund  in  hands  of,  44. 


References^        INDEX.         \ are  to  sections.  7 AQ 

ASSIGNEE  —continued. 

no  attachment  of  funds  in  hands  of,  77  n. 

estoppel  of  creditor  by  accepting  benefits,  115. 

effect  of  neglect  to  sue,  115  n. 
ASSIGNMENT,    316-346. 

See  Fraudulent    General    Assignments. 

what  constitutes,  316. 

construed  like  other  contracts,  20  n,  343. 

action  in  aid  of,  109. 

creditors  may  overturn,  108. 

bill  of  particulars  as  to  fraud  in,  162a. 

creditors,  when  estopped  to  attack,  115. 

assailing  and  claiming  under,  316  n. 

debtor  defendant  in  suit  to  cancel,  128. 

takes  effect  from  delivery,  316a. 
ASSIGNOR,  must  not  withhold  assets,  3i6tf. 

See  Fraudulent  General  Assignments. 
ASSUMPSIT,  remedy  by,  62. 

will  not  lie  against  fraudulent  vendee,  62. 

damages  in,  62. 
ASSUMPTION,  of  liability  as  consideration,  209. 

by  surety  of  principal's  debt,  209. 
ATROCIOUS  frauds,  under  forms  of  law,  5  //. 
ATTACHMENT,  against  property  in  name  of  third  party,  57. 

specific  lien  by,  81. 

New  York  rule,  81,  81  n. 

not  usually  sufficient  to  support  creditors'  bill,  81. 

judgment  in  suit  by,  77. 

conveyance  to  defeat, void,  11. 

injunction  in  aid  of,  53,  73,  185. 

not  good  against  assignee,  77  //. 

rights  of  creditors,  394a. 

simple  contract  creditors  may  have,  73  n. 
ATTACKING  CREDITORS,  status  of,  73-88. 

See  Status  of  Attacking  Creditors. 
ATTACKING,  different  conveyances,  154. 

title  on  ground  of  fraud,  158. 

judgments,  286^. 

consideration,  297^. 
ATTORNEY,  authorized  to  take  supplementary  proceedings,  61  //. 

provision  for  fees  of,  335. 

renders  assignment  fraudulent,  335. 


7  CO  References}        INDEX.         [are  to  sections. 

ATTORNEY  —  continued. 

as  fraudulent  vendee,  62. 

conspiring  with  debtor,  62. 
AUTHORITY,  to  compromise  debts,  336. 

effect  of,  in  assignment,  336. 
AVAILABLE  assets  for  creditors,  23-50,  50(7. 

what  interests  may  be  reached,  23-45. 

not  exempt  property,  46-50,  365. 

what  cannot  be  reached,  50a. 
AVERMENTS  of  complaint,  140-157. 

of  delivery  of  deed,  140  ;/. 

of  answer,  158-167. 

of  fraud,  141. 
AVERSION  to  exemptions  not  statutory,  360. 
AVOIDING,  denial  in  answer,  159. 

must  be  overcome  by  competent  proof,  159. 

discovery,  165. 
AWAKENING  SUSPICION,  is  notice,  379. 
BADGES  OF  FRAUD,  224-244. 

(1.)   Indicia  or  badges  of  fraud,  6,  224,  225. 

what  constitute,  224,  225. 

suspicious  circumstances,  225. 

in  Twyne's  case,  22. 

theory  of  the  law,  224. 

"  a  fact  calculated  to  throw  suspicion  on  the  transaction, 
225. 

not  conclusive  evidence,  225. 

strong  and  slight  badges,  225. 

burden  of  proof  changed  by,  225. 

must  be  passed  upon  by  jury,  226. 
(2.)   Recital  of  fictitious  consideration,  228. 

how  considered,  228. 

important  badge  of  fraud,  228. 

exaggerated  indebtedness,  228. 

misleading  statement,  228. 

excessive  mortgage,  228. 

must  be  intentional,  not  accidental,  228. 
(3.)   Antedating  instrument,  229. 

is  an  indicium  of  fraud,  229. 

date  not  essential  part  of  instrument,  229. 
(4.)    Vague  description  as  badge  of  fraud,  230. 

submitted  to  jury  as  a  circumstance,  230. 

how  explained,  230. 


References^        INDEX.         [are  to  sections.  75' 

BADGES  OF  FRAUD  —  continued. 

(5.)   Generality  of  the  conveyance,  22,  231. 
raises  presumption  of  fraud,  231. 
different  views  of  the  courts,  231. 
regarded  as  unusual,  231. 

was  one  of  the  badges  in  Twyne's  case,  22,  231. 
various  illustrations,  231. 
continued  possession,  231^,  245-267. 
(6.)  Inadequacy  of  purchase  price,  232. 
effect  of,  as  evidence,  232. 
does  not  prove  fraud,  232. 
unless  extremely  gross,  6,  232. 
only  a  circumstance,  232. 
(7.)    Transfer  pending  suit,  22,  157,  233. 
how  regarded,  233. 
scanned  with  much  suspicion,  233. 
(8.)  Secrecy,  evidence  of,  234,  272. 

is  fact  from  which  fraud  may  be  inferred,  234. 
is  not  fraud  by  itself,  234  //. 
secret  trust,  234a:. 
(9.)   Suppression  or  concealment,  235,  236. 

subsequent  acts  of  fraud  avoiding  transfer,  235. 
failure  to  record  instrument,  234  n,  235. 
excusing  failure  to  record,  235,  235  ;/. 
(10.)   Concealment  ifi  fraud  of  bankrupt  act,  237. 

the  test  applied,  237. 
(11.)  Absolute  conveyance  by  way  of  security,  238. 

proving  absolute  conveyance  a  mortgage,  238. 
valid  if  no  fraud  intended,  238. 
effect  of  secret  reservation,  238. 
convenient  cover  for  fraud,  238. 
excess  of  property  mortgaged,  2380. 
(12.)   Sales  upon  credit,  240,  332,  333. 
not  necessarily  fraudulent,  240. 
is  a  circumstance,  240. 
when  considered  fraudulent,  240. 
(13.)    Unusual  acts  and  transactions,  241. 
many  illustrations,  241. 
partial  explanations,  241. 
neglect  to  offer  explanations,  241. 
non-attendance  of  defendant,  241  n. 
unusual  particularity,  241. 
absence  of  memoranda,  241. 


HC2  References^        INDEX.         [are  to  sections. 

BADGES   OF    FRAUD  —  unusual  acts  and  transaction*  —  continued . 

false  receipt,  241. 

exceptional  and  peculiar  conduct,  241. 

absence  of  means  in  the  vendee,  241,  274. 

painstaking  legal  formalities,  241. 
(14.)   Effect  of  relationship,  242. 

calculated  to  awaken  suspicion,  242. 

transaction  will  be  closely  scrutinized,  242. 

not  necessarily  evidence  of  fraud,  242. 

when  coupled  with  other  badge,  242. 

mother  and  son,  242. 
(15.)   Prima  facie  cases  of  fraud,  243, 

comments,  244. 
BAILEE,  cannot  set  up  fraudulent  title,  107  n. 
BANK  BILLS.,  may  be  reached,  24. 
BANKRUPT  ACT,  concealment  in  fraud  of,  237. 

purpose  of,  to  defeat  preference,  390  n. 

assignee  under,  114. 
BANKRUPTCY,  bond  payable  on,  when  void,  364  n. 

assignee  in,  as  complainant,  114. 

discharges  as  a  defense,  294. 

and  insolvency  discharges,  294. 

property  reverts  after,  114. 

dower  not  barred  by,  315. 
BEGIN  AND  REPLY,  right  to,  271  n. 
BENEFICIARIES,  as  defendants,  128. 
BENEFITS,  estoppel  by  accepting,  115. 
BILL  IN  EQUITY,  68. 

See  Creditors'  Bills  —  Complaint. 

merits  of  relief  by,  discussed,  51,  60,  68. 

forms  of  relief,  4,  51-72. 

offer  to  repay  purchase  price,  192. 
BILL  OF  PARTICULARS,  discretionary,  162a,  341^. 

actions,  ex  delicto,  allowed  by  grace,  162^. 

when  granted  or  refused,  162^. 
BISPHAM,  definition  of  creditors'  bills  by,  68. 
BLACK,  J.,  views  as  to  presumptions,  7. 
BLATCHFORD,  J.,  views  of,  291. 

as  to  ignorance  of  fraud,  291. 

limitations  in  equity,  291. 
BLINDNESS  of  assignee,  badge  of  fraud,  338. 
BONA  FIDE  purchasers,  21,  369-384. 

See  Notice. 


References]       INDEX.        \are  to  sections.  7CJ 

BONA  FIDE—  continued. 

rights  of,  superior  to  creditors,  369. 

theory  of  the  law,  369. 

payment  of  consideration  constitutes  substitution  of   prop 
erty,  369. 

statute  27  Eliz.,  21. 

plea  of,  163. 
(1.)    Title  of  purchaser,  how  protected,  369. 

three  things  must  concur,  369. 

must  buy  without  notice,  369. 

must  be  purchaser  for  value,  369. 

burden  of  proof,  158. 
(2.)   Generality  of  the  rule,  370. 

when  equities  are  equal  the  law  prevails,  370. 
(3 . )  Mortgagee  as  bona  fide  purchaser,  371. 

rule  in  New  York,  371. 

pre-existing  indebtedness  as  consideration,  371. 
( 4 . )    Withou  t  notice,  372. 

kinds  of  notice,  373. 

constructive  notice  of  fraud,  374-382. 

rule  in  Stearns  v.  Gage,  375,  376. 

Parker  v.  Connor,  378. 

facts  sufficient  to  excite  inquiry,  378,  380,  381. 

actual  belief,  382. 

purchaser  with  notice,  383,  384. 
BONA,    sed  impossibilia  non  cogit  lex,  83. 
BOND  OF  GUARDIAN,  surety  on,  90  n. 
BOOK  ENTRIES,  proof  of  against  debtor,27i#. 
BOOK  ROYALTIES,  may  be  recovered,  24,  37. 

remedy  to  recover,  37. 
BOOKS  OF  ACCOUNT,  as  evidence,  271^. 
BOTH  PARTIES,  must  be  implicated  in  fraud,  183. 
BRANDING  CATTLE,  sufficient  delivery,  262 
BRETT  v.  CARTER,  rule  embraced  in,  353. 
BROADWAY  NATIONAL  BANK  v.  ADAMS,  367. 

the  case  criticised,  367. 
BROTHER,  conveyance  by  sister  to,  not  fraudulent,  5. 
BURDEN  OF  PROOF,  158,  208,  271. 

conveyances  by  husband  to  wife,  301. 

rests  on  party  asserting  affirmative  of  the  issue,  271. 

generally  rests  on  creditor,  271. 

shifting,  by  showing  fraudulent  intent,  271. 

as  to  explanations,  271. 
48 


yCA  References]        INDEX.         [are  to  sections. 

BURDEN  OF  PROOF  —  continued. 

as  to  consideration,  201. 

to  repel  presumption,  225. 

right  to  begin  and  reply,  271  n. 

as  to  trust  income,  45. 

to  secure  parties,  on  plaintiff,  128. 
BUSINESS,  authorizing  trustee  to  continue,  330. 

continuance  by  insolvent,  143  n. 
BUSINESS  TRANSACTIONS,  presumed  to  be  honest,  5. 

CALIFORNIA,  fraudulent  sale  absolutely  void,  16  ;/. 

proceedings  against  debtor's  estate,  112. 

voluntary  conveyance  not  presumptively  fraudulent,  20c 
CAMPBELL  v.  FOSTER,  relied  on  in  Nichols  v.  Eaton,  365. 

discarded  in  Williams  v.  Thorn,  45,  365. 

not  the  law  of  New  York,  45,  365. 
CANCELLING  worthless  debt,  not  a  fraudulent  alienation,  23. 

debts,  when  fraudulent,  42. 

by  testator,  not  good  against  creditors,  42. 
CAPITAL  STOCK,  a  trust  fund,  117,  119,  68  n. 

See  Corporation. 
CARELESS  EXPRESSIONS,  not  poof  of  fraud,  5. 
CARELESSNESS,  not  proof  of  fraud,  5. 
CASE,  action  on  the,  62. 

not  appropriate  against  vendee,  62. 

damages  too  remote,  62. 
CASE  v.  BEAUREGARD,  discussed,  83. 
CATTLE  roaming  over  plains,  delivery  of,  262. 

requisites  of  the  change  of  possession,  262. 

branding  cattle,  sufficient  delivery,  262. 
CAUFFMAN  v.  VAN  BUREN,  explained,  81. 

re-explained,  86  n. 
CAUSE,  of  fraudulent  transfers,  2. 
CAUSES  OF  ACTION,  misjoinder  of,  135. 

uniting,  55,  154. 
CERTIFICATE  of  division,  407a. 
CESTUI  QUE  TRUST,  and  trustee,  137. 

need  not  have  judgment,  127^. 

decree,  when  binding  on,  137. 

suits  in  furtherance  of,  and  opposition  to  trust,  137. 

when  to  be  joined,  137. 

may  trace  insurance  money,  44. 
CHAIN  of  evidence,  224. 


References^        INDEX.         \are  to  sections.  755 

CHANGE  IN  ASSIGNMENT,  parties  cannot  make,  3x6 
CHANGING  SECURITIES,  existing  creditor,  89. 
CHANGE  OF  POSSESSION,  delivery,  245,  246-267. 

concerning  possession,  245. 

defined,   245,  253,  257,  259. 

feature  of  Twyne's  case,  22,  245. 

changes  in  the  law,  245. 

undue  prominence  of  the  subject,  245. 

cases  of  bailments,  245. 

excusing  want  of  change  of  possession,  263. 

on  judicial  sale,  265. 

of  growing  crops,  266. 

under  general  assignment,  316. 

as  regards  chattel  mortgage,  356^. 
(1.)  Possession  as  proof  of  fraud,  247. 

prima  facie  evidence,  247,  248. 

criticisms  of  the  doctrine,  247. 

statutory  policy,  247. 

New  England  cases,  249. 

rule  in  New  York  and  various  other  States,  250,  251. 

repelling  inference  of  fraud,  250. 

rule  in  Federal  tribunals,  250. 

between  husband  and  wife,  253. 
(2.)   Conclusive  evidence,  when,  251. 

theory  of  the  cases,  251. 

results  of  the  conflicting  policies,  252. 

the  principle  discussed,   252. 
(3.)   Actual  change  of  possession  required,  253. 

change  cannot  be  effected  by  words,  253. 

must  be  by  outward  and  visible  signs,  253. 

assumption  of  ownership  by  vendee,  253. 

questions  for  the  jury,  254. 

overcoming  the  presumption,  255. 
(4.)  Requisites  of  the  change,  253,  256,  257,  258,  259. 

possession  within  a  reasonable  time,  256. 

change  must  be  continuous,  257. 

separating  stock,  253. 

temporary  resumption  of  possession,  258. 

concurrent  possession  insufficient,  259. 

possession  of  bailee,  260. 

no  delivery  where  purchaser  has  possession,  261. 

overcoming  presumption,  255. 


7t6  References}        INDEX.        [are  to  sections. 

CHANGE  OF  POSSESSION  —  continued. 

(5.)    When  technical  delivery  is  not  essential,  262. 

cattle  roaming  over  plains,  262. 

delivery  of  logs,  262. 

vessel  at  sea,  262. 

squared  timber,  262. 
(6.)   Change  of  possession  of  realty,  264. 

rules  as  to,  stated,  264. 
CHANGE    OF  VENUE,  territorial  jurisdiction,  157a. 
CHARACTERISTICS  of  fraudulent  conveyances,  15. 

made  to  avoid  a  debt  or  duty,  15. 

mutual  fraud  and  injury,  15. 
CHARITY,  gifts  to,  '2170. 
CHATTEL  MORTGAGES,  questions  affecting,  347. 

rights  of  purchaser  of,  168. 

when  fraudulent,  347-359. 

can  be  used  only  as  security,  347. 

fraud  in  vitiates,  357  //. 

of  perishable  property,  359. 

higher  security  than  land  mortgage,  347. 

in  excess  of  debt,  347. 

overstatement  of  debt,  347. 

altering  mortgage,  347. 

creditor  at  large  cannot  assail,  347. 
(1.)   Questions  affecting,  regulated  by  statute,  347. 

effect  of  record  of,  347. 

repels  presumption  of  fraud,  347. 
(2.)   Mortgage  with  power  of  sale,  267,  348-355. 

rule  in  Robinson  v.  Elliott,  348-351,  354. 

the  case  stated,  348. 

similar  cases,  349. 

proof  extrinsic  to  the  instrument,  350. 

comments  in  the  cases,  351. 
(3.)   Rule  opposed  to  Robinson  v.  Elliott,  352. 

Brett  v.  Carter,  and  similar  cases,  353. 

recent  opinion  of  Supreme  Court,  353. 

discussion  of  the  principle  involved,  354. 
(4.)   Sales  for  mortgagee' s  benefit,  355. 

considered  legal,  355. 

New  York  cases,  355. 

mortgagor  acts  as  agent,  355. 
(5.)   Sales  upon  credit,  240,  332,  7,2,2,,  356- 

not  tolerated,  356. 


References]        INDEX.         [are  to  sections.  J  CJ 

CHATTEL   MORTGAGES—  sales  upon  credit— continued. 

tend  to  hinder  and  delay  creditors,  356. 
(6.)  Possession,  independent  valid  transaction,  357. 

void  mortgage  cannot  be  transmuted  into  valid  pledge,  357. 

pledge,  independent  of  fraudulent  mortgage,  sustained,  357. 
(7.)   Right  of  revocation:  reservations,  358. 

when  inconsistent  with  transfer  may  be  avoided,  358. 
(8.)   Rule  as  to  consumable  property,  359. 

mortgage  upon,  fraudulent,  359. 

when  valid,  359. 

intent  in  such  cases,  359. 
(9.)   Generally,  356a,  356/;. 

secret  trust,  356^. 

change  of  possession,  356^. 

distinct  claims,  3590. 
CHOSES    IN   ACTION,  covinous  transfers  of,  voidable,  17,  22,  35. 

conflict  in  the  cases,  33. 

true  rule  applicable  to,  ^7,. 

what  included  in,  7,7,  u. 
CIRCUMSTANCES,  proof  of  fraud  from,  5,  13,  224,  225,  227,  281. 

evidence  of,  281. 

must  be  persuasive,  5,  6. 

intent  inferred  from,  8,  206. 

great  latitude  in  admission  of  evidence  of,  281. 

suspicious,  as  proof  of  fraud,  225. 

evidence  of,  wide  range  given,  281. 

proof  of  fraud  from,  must  be  strong,  281. 

test  as  to  admission  of,  281. 

direct  proof    of  fraud  not  attainable,  13. 
CIRCUMSTANTIAL  and  direct  evidence,  5,  5  //,  6,  227. 
CLAIMS,  for  pure  torts  not  assignable,  34,  316a. 

injury  to  property  may  be  reached,  34. 

joinder  of,  54,  55. 

prior  and  subsequent  to  alienation,  105. 
CLASSES  of  fraudulent  conveyances,  15. 

three  elements  must  concur,  15. 

of  creditors,  existing  and  subsequent,  89. 

of  creditors'  suits,  68,  68  //. 
CLASSIFIED  demand,  sustains  bill,  76. 
CO-CONSPIRATORS,  declarations  of,  280. 

when  admissible,  280. 

must  relate  to  transaction  under  investigation,  280. 

purpose  ofvthe  rule,  280. 


7C8  References]        INDEX.         I are  to  sections. 

COLLATERAL  ATTACK  of  transfers,  rule  as  to,  69. 

exceptional  practice  in  Louisiana,  69. 
COLLATERAL,  relief  to  main  action,  63. 

facts  as  evidence  of  fraud,  281,  282. 

attack  on  judgment,  270. 
COLLATERALS,  not  considered  in  proving  claim,  51  n. 
COMBINATIONS,  in  equity,  allowed,  108  n. 
COMITY,  between  States,  64,  346. 

the  principle  applied,  64,  346. 

yields  in  favor  of  residents,  64,  46. 

recognition  of  receivers  by,  118. 
COMMON   FUND,  when  liable  for  expenses,  109. 
COMMON   LAW,  suspension  of  alienation  void  at,  362. 

statute  of  Elizabeth  declaratory  of,  16. 

enjoins  integrity,  16. 

rule  as  to  presumption  of  its  existence,  64  //. 

rule  as  to  competency  of  party,  269. 

maxims  of,  20  n. 

fraudulent  conveyances  at,  16. 

affirmative  statute  does  not  repeal,  16. 

how  far  statute  abrogates,  20  n. 
COMPETENCY,  of  party  as  witness,  269. 

defendant  may  be  compelled  to  testify,  269. 

rule  of  the  common  law,  269. 

of  wife  as  witness,  313. 
COMPLAINANTS,  who  may  be,  107-127,  127*7,  89-106. 
(1.)    Who  may  assail  fraudulent  conveyances,  73,  107. 

status  of  complainants,  73-88,  107. 

conveyances  voidable  only  as  to  creditors,  107,  395-404. 

question  of  parties  difficult,  107. 

interested  parties  in  esse  must  be  joined,  107. 

sequestrator  as,  116. 
(2.)    'Joinder  of  complainants,  108,  108  //. 

creditors  by  several  judgments,  108. 

judgment-creditors  cannot  unite  at  law,  108//. 

creditors  by  judgment  and  decree,  108. 

theory  as  to  joinder,  108. 

motion  to  intervene  discretionary,  108  n. 

laches  in  application,  109. 

combinations  allowed,  108,  108  //. 

hostile  claimants  cannot  join,  108. 
(3.)     Suing  for  others,  109,  no. 

rules  regulating,  109. 


References  ]        INDEX.        [are  to  sections.  7  Cg 

COMPLAINANTS  —  suing  for  others  —  continued. 

"  and  others  "  interpreted,  no. 

equity  of  a  creditor,  no. 

in  aid  of  assignment,  109. 

stockholders  suing  for  corporation,  109. 

wife  as  creditor,  no  n. 
(4.)   Surety,  subrogation  of,  111. 

entitled  to  stand  in  place  of  principal,  in. 
(5 . )   Executors  and  administrators,  112,  113. 

ordinarily  bound  by  decedent's  act,  112,  398. 

statutory  changes,  112. 

rule  in  New  York,  112. 

may  now  impeach  fraudulent  transfers,  112,  113. 

importance  of  the  change,  113. 

liability  of  representative,  113,  113//. 
(6.)  Assignees,  114,  115. 

assignee  in  bankruptcy,  114. 

title  of,  114. 

title  of  general  assignee,  115. 

when  creditor  may  sue,  115. 
(7.)  Receivers,  116. 

rights  of,  as  complainants,  116. 

disaffirm  fraudulent  dealings,  116. 

of  corporations,  117. 

who  represented  by,  117. 

foreign  receivers,  118. 

rule  of  comity,  118. 

creditors  of  corporations,  119. 
(8.)   Rights  of  various  complainants,  120-127. 

sheriff,  81,  120. 

heirs,  121. 

legatee,  121//. 

when  heirs  cannot  sue  ,121. 

husband  and  wife,  122,  298-315. 

widow,  when  not  proper  complainant,  121. 

tort  creditor,  123. 

conveyance  to  avoid  fine,  123//. 

overseer  of  the  poor,  124. 

creditors  having  liens,  125. 

purchasers  removing  incumbrances,  126. 

cestui  que  trust,  127  a. 

creditors  opposing  will,  127. 

wife,  when  creditor,  122. 


76o  References']        INDEX.         \jire  to  sections. 

COMPLAINT,  requisites  of,  140-157^. 
(1.)  Recitals  of  the  complaint,  140. 

complainants  must  be  creditors,  140. 

indebtedness  must  be  shown,  140. 

alternative  relief,  153. 

in  double  aspect,  155. 

remedy  at  law  exhausted,  140. 

alleging  insolvency,  143. 

concerning  consideration,  144. 

general  averments,  140,  140  «,  141. 
(2.)   Pleading  fraud,  141,  141  //. 

fraud  defined,  13,  141. 

alleging  fraud,  141,  \^\n. 

word  "  fraud  "  need  not  be  used,  141. 

material  facts  must  be  alleged,  141. 

charging  knowledge,  141. 

fraud  in  subsequent  creditors,  141. 

complaint  by  executor,  143. 
(3.)   Evidence  not  to  be  pleaded,  142. 

general  certainty  sufficient,  142. 

circumstances  not  to  be  minutely  charged,  142. 

circumstances  applied  in  law,  142. 
(4.)   Pleading  in  equity,  60,  146. 

more  liberal  than  at  law,  146. 

seeking  discovery,  147. 

excusing  laches,  148. 

New  York  rule,  149. 

explaining  delay;  discovery  of  fraud,  149,  149  //. 

allegations  concerning  consideration,  144. 

concerning  intent,  145. 
(5.)   Multifariousness,  150,  151,  152. 

complaints  bad  for,  150. 

pleadings  held  not  to  be,  151,  152. 
(6.)  Details  of  complaint,  155-157. 

prayer  and  verification,  155. 

amendment  of,  156. 

description  in,  157. 

variance,  155. 

seeking  discovery,  147. 

attacking  different  conveyances,  154. 

lis  pendens,  157. 
COMPOSITION  WITH  CREDITORS,  must  be  fair,  393. 

illegal  preference,  393a. 


References^        INDEX.        far*  to  sections.  ~C)\ 

COPMROMISE,  power  in  assignee  to,  336. 

how  construed,  336. 

with  creditors,  must  be  honest,  393. 

effect  of  secret  preferential  agreement,  393. 

when  a  fraud  upon  other  creditors,  393. 

antecedent  agreement  to  prefer,  394. 
CONCEALMENT  OF  FRAUD,  148,  234,  235. 

pleading  concerning,  148. 

in  fraud  of  bankrupt  act,  237. 
CONCLUSIVENESS  of  judgments,  74,  168,  270. 

of  transfers  between  parties,  395-401. 
CONCURRENT  remedies,  legal  and  equitable,  51,  60. 

cumulative  remedies,  65. 

possession  insufficient,  259. 
CONDITIONS  treated  as  void,  361. 

repugnant,  are  void,  362. 

what  are,  363  //. 
CONDONATION  of  fraud,  perfects  title,  370. 
CONDUCT  that  is  fraudulent,  13. 
CONFESSIONS,  of  different  judgments,  54. 

may  be  attacked  in  one  suit,  54. 

set  aside  in  equity,  60. 

collusive  confessions  avoided,  74  //,  174. 

by  administrator,  74  u. 

sufficient  to  uphold  creditors'  bill,  76. 

transfer  by  confessed  judgment,  174. 

ratification  of,  by  creditor,  174. 
CONFORMING  testimony  to  pleadings,  285. 
CONFUSION,  of  goods,  does  not  destroy  equity,  44,  44  //. 
CONNECTICUT,  change  of  possession,  251. 

spendthrift  trusts  in,  367c?. 
CONSIDERATION,  inadequacy  of  as  evidence  of  fraud,  6. 

disparity  must  be  great,  6,  232. 

allegations  of  complaint  concerning,  144. 

general  subject,  207-223. 

need  not  be  in  money,  207,  209. 

promise  to  pay,  209. 

pre-existing  debt,  2. 

assumption  of  liability,  209. 

assumption  by  surety,  209. 

paid  by  debtor  for  third  party,  57,  57  //. 

burden  of  proof,  208. 

rule  in  New  York,  208. 


762  References]        INDEX.         [are  to  sections. 

CONSIDERATION  —continued. 
in  California,  208. 

insignificant,  209. 
(1.)   Concerning  consideration  and  good  faith,  207-223. 

defined,  207,  209. 

moral  obligations,  215. 

individual  and  firm  debts,  216. 

when  important  as  affecting  alienations,  207. 

what  is  valuable  consideration,  209. 

services  by  member  of  family,  218. 

husband  and  wife,  210,  218. 

sufficient  consideration,  222. 

insufficient  consideration,  223. 

exchange  of  property,  211a. 

future  services,  223. 

alleging,  144. 
(2.)    Voluntary  conveyance,  208. 

implies  total  want  of  substantial  consideration,  208. 
(3.)   Good  and  valuable  consideration,  210/1. 

Judge  Story's  views,  210  n. 
(4.)   Marriage  as  consideration,  212,  306. 

the  cases  reviewed,  212. 

when  part  of  fraudulent  scheme,  306. 

no  other  consideration  so  highly  respected,  212. 
(5.)  Illegal  consideration,  214. 

illicit  intercourse,  213. 
( 6 . )   Proofs  of  consideration,  219. 

future  advances,  217. 

gifts  to  charity,  217^. 

means  of  vendee,  219. 

recitals  as  evidence,  220. 

explaining  recitals,  221. 

attacking,  297^. 

may  be  varied  by  parol,  221. 
CONSPIRACY,  remedy  by  action  of,  62. 

damages  in  action  for,  62. 

when  not  cause  of  action,  62  n. 
CONSPIRATORS,  declarations  of,  280. 

why  admitted,  280. 

statement  of  one  witness,  280. 
<  '<  INSTRUCTION,  of  instrument,  intent  gathered  from,  10,  322. 

rules  of,  same  in  equity  as  at  law,  51. 

of  assignments,  20  n,  343,  316a. 


References]        INDEX.         [are  to  sections.  763 

CONSTRUCTION  —  continued. 

assignments  construed -like  other  contracts,  20  //. 

of  bill,  54,  146. 

statutes  as  to  frauds,  liberal,  19,  20. 

rule  in  Twyne's  case,  20,  22. 

principle  applying  to  construction,  20. 

innocent,  to  be  preferred,  20  //. 
CONSTRUCTIVE  FRAUD,  does  not  justify  arrest,  191. 

reimbursement  allowed  in  cases  of,  192. 

defined  by  Story,  323. 

is  a  conclusion  of  law,  163. 
CONSTRUCTIVE  NOTICE  OF  FRAUD,  374,  382. 

not  applicable  to  creditor,  106. 
See  Notice. 
CONTEMPLATION,  of  future  indebtedness,  96,  97,  100,  202. 

subsequent  creditors  must  show,  96,  202. 

of  marriage,  fraud  in,  314. 
CONTEMPORANEOUS  TRANSACTIONS,  evidence  of,  276. 
CONTEMPT,  depends  upon  act  done,  196  n. 
CONTINGENT  CREDITORS,  entitled  to  protection,  90,  346/'. 
CONTINGENT  REVERSIONARY  INTEREST,  recoverable,  29. 

remainder  not  liable  to  execution,  29  n. 
CONTINUED,  indebtedness,   103. 

possession  as  evidence  of  hidden  interest,  231a,  245-267. 
CONTINUOUS,  change  of  possession  must  be,  257. 
CONTRACT  CREDITORS,  rights  of,  73,  73  n. 
CONTRACTS,  how  interpreted,  268. 
CONTRAVENING  STATUTES,  assignments,  324. 
CONTRIVANCE,  to  cover  up  fraud,  149. 

evidence  of,  235. 
CONTROVERSY,  all  parties  interested  should  be  joined,  128. 
CONVERSION,  claim  passes  to  assignee,  316a. 
CONVEYANCE,  hindering  creditors  by  its  terms,  voidable,  9. 

fraudulent  at  common  law,  16. 

of  whole  estate,  presumption  of  fraud,  22,  231. 

valid  between  parties,  395-399. 

the  theory,  396. 

fraudulent,  defined,  15. 

meaning  of  word,  14  n. 

of  choses  in  action,  fraudulent,  17,  33. 

avoided  by  subsequent  creditors,  101. 

to  defeat  attachment,  void,  11. 

avoided  in  ejectment,  69,  69  n. 


70A  References^        INDEX.         [are  to  sections. 

COPARTNERS,  and  fraudulent  alienees  as  defendants,  54. 

may  sue  copartner  and  fraudulent  alienee,  54. 

special,  cannnot  be  preferred,  329. 

arrest  of,  191. 

debts  of,  216. 

preferring  claims,  329. 

rights  of,  limited,  329. 

assignment  by,  319/;. 

corporators,  when  liable  as,  139. 

limited  partnership  assets,  trust  fund,  329. 

power  to  assign,  319^. 

various  forms  of  partnership,  319/'. 
CORPORATION,  creditors  of,  may  file  bill,  33,  119. 

may  be  joined  in  bill  as  defendant,  128. 

receiver  of,  rights  to  bring  suit,  117. 

and  individuals  on  same  footing,  119. 

no  damages  for  procuring  judgment  against,  62  ;/. 

organized  for  fraudulent  design,  15. 

assets  a  trust  fund,  117,  119,  139. 

like  natural  person,  117. 

continuing  business  when  insolvent,  143  n. 

stockholders,  suing  in  right  of,  109. 

stockholders  of,  suit  against,  139. 

when  corporators  liable  as  partners,  139. 

unpaid  subscriptions  of,  117. 

change  of  name  to  evade  liability,  119. 

rules  relating  to  subsequent  creditors,  applied  to,  100. 

when  insolvency  not  ground  for  receiver,  239  n. 

no  discharge  granted  to  in  bankruptcy,  294  n. 

rules  as  to  fraudulent  conveyances  apply  to,  199  n. 

assignments  by,  346a. 
COSTS,  judgment  for,  rights  of  creditors,  90  n. 
COUNSEL  FEES,  providing  for  in  assignment,  335. 
COUNTY,  creditor's  bill  against,  139  n. 

jurisdiction  outside  of,  406. 

execution  issued  to,  68. 
COUPONS,  suit  for  judgment  on  and  mandamus  united,  85  ;/. 
COVINOUS  alienations  of  exemptions,  48. 
COVINOUS  TRANSFERS,  16-17. 

of  choses  in  action,  17,  33. 

valid  between  the  parties,  395-400. 
CREDIT,  sales  upon,  11,  240,  332,  333. 

sale  on,  to  son,  11. 


References  j        INDEX.        [are  to  sections.  7^S 

CREDIT  —  continued. 

effect  of,  332,  m. 
CREDITORS,  ancient,  power  of,  1,  1  n. 

rights  of  in  life  insurance,  23,  23a. 

rights  to  proceeds  of  power,  39. 

lien  on  trust  income,  45. 

must  prove  trust  income  excessive,  45. 

burden  of  proof,  158,  271. 

when  judgment  unnecessary,  83. 

must  have  clean  hands,  91. 

suing  in  place  of  assignee,  115. 

status  of.     See  Status  of  Attacking  Creditors. 

of  attacking  creditors,  73-88. 

who  are  not,  91. 

when  estopped,  91. 

no  right  of,  to  oppose  probate  of  will,  127. 

when  they  may  sue  stockholders,  119. 

when  wife  is  creditor,  no  //,  122. 

policy  of  the  law  to  protect  assets  available  to,  23-50. 

existing  and  subsequent,  89-106. 

must  invoke  process  against  debtor,  52. 

recitals  not  binding  on,  221. 

See  Existing  Creditors;  Subsequent  Creditors. 
CREDITORS'  ACTIONS,  purpose  of,  4. 

bill  to  reach  surplus  income,  360. 

of  corporations,  relief  to,  119. 

who  may  be  complainants,  107-127. 
CREDITORS  AT  LARGE,  rights  of,  52,  73. 

cannot  assail  debtors'  transfers,  73. 

cannot  assail  chattel  mortgage,  347. 

not  entitled  to  injunction,  52,  73. 

rights  of,  not  favored  in  equity,  73. 

of  a  decedent,  79. 
CREDITORS'   BILLS,  68. 

See  Creditors'  Remedies;  Supplementary  Proceedings. 

why  preferable,  60. 

merits  of  relief  in  equity  discussed,  60. 

object  of,  in  New  York,  68. 

to  reach  equitable  assets,  68. 

execution  must  precede,  68. 

when  execution  excused,  75. 

filing  of,  creates  lien,  61,  68,  392. 

fraudulent  conveyances  annulled  by,  68. 


766  References]        INDEX.         \  are  to  sections. 

CREDITORS'   BILLS  —  continued. 

usually  regulated  by  statute,  68. 

distinguished  from  bill  in  equity,  68. 

is  in  nature  of  a  discovery,  68. 

supplementary  proceedings,  substitute  for,  6i. 

simple  creditor  cannot  maintain,  71,  73. 

two  kinds  of,  68,  68  //. 

complainants  in,  107-127. 

defendants  in,  128-139. 

of  fraudulent  grantee,  387. 
CREDITORS'   PROCEEDINGS,  assignment  cases,  316^ 
CREDITORS'  REMEDIES,  51-72. 

See  Remedies  of  Creditors. 

legal  and  equitable,  51,  51  n. 

injunction  against  debtor  before  judgment  disallowed,  52. 

exceptions  to  the  rule,  53. 

joinder  of  claims,  54,  55. 

land  in  name  of  third  party,  57. 

relief  before  and  after  sale,  58. 

at  law  and  in  equity,  59,  60. 

aiding  attachment,  53. 

supplementary  proceedings,  61,  61  ;/. 

assumpsit,  case,  conspiracy, 62,  62  n. 

reference  not  ordered,  62^. 

relief  collateral  to  main  action,  63. 

framing  issues,  51  n. 

action  against  rescuers,  62  n. 

remedy  governed  by  lex  fori,  64. 

cumulative  remedies,  65. 

various  illustrations,  65. 

imprisonment  of  debtor,  66. 

election  of  remedies,  67. 

creditors'  bills,  68. 

equity  jurisdiction  in  personam,  60. 

direct  and  collateral  attack,  69. 

in  federal  courts,  71. 

recapitulation  of,  72. 
CRIME,  fraud  in  light  of,  not  considered,  3. 

indictment  changing  fraud,  65  n. 
CRIMINATING  disclosure,  party  need  not  make,  165. 
CROPS,  rule  as  to,  27. 

liable  to  creditors'  remedies,  27. 

on  exempt  land,  27. 


References^        INDEX.         [art  to  sections.  J<  >J 

CROPS  —  continued. 

delivery  of,  266. 
CROSS-BILL,  affirmative  relief,  166. 

homestead  protected  by,  166. 
CROSS-EXAMINATION  OF  PARTY,  281. 

great  latitude  allowed,  281. 
CROSS-PETITION,  relief  by,  166. 
CUMULATIVE  REMEDIES,  allowed  and  disallowed,  65. 

civil  and  criminal  jurisdiction,  65. 

election  of  remedies,  67. 
CURTESY,  right  of,  available  to  creditors,  30. 

reached  by  creditors'  bill,  30. 

initiate,  cannot  be  reached,  50(7. 

DAMAGES,  judgment  for,  not  allowed  in  equity,  51. 

decree  must  be  for  an  accounting,  51. 

too  remote  in  action  of  case,  62. 

exceptional  cases,  62. 

in  action  for  conspiracy,  allowed,  62. 

in  assumpsit,  62. 
DATE  OF  AGREEMENT,  governs  creditors'  rights,  90. 

antedating  instrument,  229. 
DAUGHTER,  claim  for  services,  218. 

no  promise  to  pay  implied,  218. 
DE  MINIMUS  NON  CURAT  LEX,  281. 
DEATH,  of  receiver,  title  on,  189. 

punishment  of  insolvent  under  Roman  law,  1. 

rule  as  to  in  England,  1  n. 

of  debtor,  effect  on  lien  in  supplementary  proceedings,  61  //. 
DEBT,  worthless,  cancellation  of,  not  fraudulent,  23. 

foundation  of  the  principle,  23. 

forgiven  or  cancelled,  when  fraudulent,  42. 

administrator  may  sue  for,  42. 

must  be  in  judgment  before  filing  bill,  73. 

equity  not  forum  to  collect,  73. 

property  of  debtor  must  be  devoted  to  payment  of,  14. 

judgment  conclusive  as  to,  74,  270. 

must  be  adjudicated,  74,  74  n. 
DEBTOR,  reservation  by,  avoids  conveyance,  10,  32,  272. 

declarations  by,  277,  278. 

as  defendant  in  creditors'  suit,  128,  129. 

absconding  and  non-resident,  84. 

rule  as  to,  128. 


768  References}        INDEX.         [are  to  sections. 

DEBTOR  —  continued. 

insolvency  of,  273. 

embarrassed,  conveyance  by,  99. 

injunction  against,  before  judgment,  disallowed,  52. 

theory  of  the  law,  52. 

exceptions  to  the  rule,  53. 

trust  income  for,  45,  360,  364. 

may  assign  accrued  income,  45  n. 

payments  made  to,  50^. 

effect  of  imprisonment  of,  66. 

secret  trust  for  benefit  of,  272. 

punishment  of,  in  early  times.  1  n. 

cannot  secure  delay,  11. 

sale  to  son,  1 1. 
DECEDENT,  creditors  of,  79. 

when  must  have  judgment,  79. 

confusion  in  the  cases,  79. 

theory  of  the  law,  79. 

judgment  necessary  in  New  York,  79. 

personal  transactions  with,  121. 
DECEIT,  action  for,  innocence  presumed,  5. 
DECEPTIVE  ASSERTIONS,  and  incidents,  proving  fraud.  7. 
DECLARATIONS  before  and  after  sale,  277. 

as  to  realty  and  personalty,  277. 

declarations  after  sale,  278. 

in  presence  of  vendee,  278. 

of  co-conspirators,  280. 

must  relate  to  act  characterized,  276. 

of  past  transactions,  276. 

as  to  acts  sui  'generis  with  those  committed,  280. 

not  received  to  prove  the  conspiracy,  280. 

admitted  to  show  its  scope  and  extent,  280. 

of  one  witness  as  to  the  conspiracy,  280. 

the  test,  276. 
DECLARATORY,  of  common  law,  statutes  are,  16. 
"  DECLARE,"  word  commented  upon,  16. 
DECREE,  168-1830. 

See  Judgment. 

when  conclusive,  168. 

appointing  receiver,  170. 

transferring  title,  172. 

against  fraudulent  vendee,  177. 

against  wife,  180. 


References^        INDEX.         [are  to  sections.  7&Q 

DECREE  —  continued. 

affecting  foreign  land,  157*7. 

must  accord  with  relief  demanded,  181. 

conform  to  complaint,  182. 

personal  against  vendee,  177,  178. 
DEDUCTION  OF  FRAUD  from  facts  and  incidents,  224,  281,  282. 
DEED,  fraudulent,  mistake  in  not  corrected,  396  . 

evidence  sufficient  to  overturn,  6. 

fraud  shown  by  separate  instrument,  6. 

not  avoided  by  loose  evidence,  6. 

delivery  of  should  be  averred,  140. 

recitals  in,  2840. 
DEFECTIVE,  complaint,  140. 
DEFENDANT,  parties,  128-139. 

(1.)  Debtor  as  defendant  in  creditors'  actions,  128,  129,  132. 

general  rule  stated,  128. 

finality  to  litigation  the  object,  128. 

conflict  in  the  cases,  128,  129. 

when  debtor  not  necessary  defendant,  129. 

result  of  the  cases,  129. 

defendants  need  not  be  equally  guilty,  130. 

plaintiffs'  duty  to  secure  parties,  128. 
(2.)   Fraudulent  grantee  must  be  joined,  131. 

the  reason,  131. 

New  York  cases,  131. 

parties  to  intermediate  conveyances,  131. 
(3.)  Assignee  and  receiver,  133. 

assignee  of  a  firm  a  defendant,  133. 

raising  objection  to  non-joinder,  133,  134. 
(4.)   Executors,  administrators,  heirs,  and  legatees,  136. 

rule  as  to  joinder  of,  as  defendants,  136. 

Cornell  v.  Radway,  136  n. 

result  of  the  cases,  136. 
(5.)    Trustee  and  cestui  que  trust,  137. 

distinction  in  the  cases,  137. 

affirmance  and  disaffirmance  of  the  trust,  137. 
(6.)   Generally,  132,  136,  138,  139. 

stockholders,  139. 

corporation  as  party  with  stockholders,  128. 

beneficiaries  as  defendants,  128. 

conveyance  pending  suit,  132a. 

bringing  in  representatives,  132^. 

suing  directors,  132a. 
49 


770  References}        INDEX.         [are  to  sections. 

f )  K  1''  K  \  I  >  A  N  T  —  generally  —  continued. 

cestui  que  trust,  137. 

parties  having  liens,  138. 

arrest  of,  191. 
DEFENSES,  as  to,  286-297. 
See  Evidence  —  Intention  — Consideration  —  Badges  of  Fraud. 

"  forms  "  no  protection,  286. 

transaction  judged  by  real  character,  286. 

principal  defenses,  286,  369-371. 

rebutting  fraud,  158. 

of  discharge  in  bankruptcy,  294  ;/. 

imprisonment  of  debtor,  66. 

against  attachment,  81. 

another  action  pending,  286a. 

attacking  judgment,  286^. 

set  off,  297a. 

attacking  consideration,  297^. 

controversies  not  separable,  297*-. 

statute  of  frauds,  293*7. 
(1.)  Laches  as  a  defense,  287. 

excusing  apparent,  148,  149. 

equity  will  not  aid  party  guilty  of,  287. 

stale  demands  disallowed,  287,  289. 
(2.)  Lapse  of  time,  109,  288,  289. 

constitutes  a  defense,  288. 

various  illustrations,  288,  289. 
(3.)  Discovery  of  the  fraud,  290. 

statute  does  not  begin  to  run  until,  290. 

effect  of  a  different  rule,  290. 

Judge  Blatchford's  views,  291. 
(4.)  Statute  of  limitations,  292,  293. 

runs  from  notice  of  fraud,  292. 

must  be  pleaded  as  defense,  292. 

limitations  in  equity,  293. 
(5.)   Insolvency  or  bankruptcy  discharges,  294. 

have  no  extra-territorial  force,  294. 

not  conclusive  on  non-residents,  294. 

the  reasons  stated,  294. 

pleading  discharge,  294  ;/. 
(6.)    Generally,  295. 

existing  and  subsequent  creditors,  96-101,  295. 

fraud  upon  subsequent  creditors,  100,  295. 

what  sheriff  must  show  against  stranger,  297. 


References]        INDEX.         \ arc  to  sections.  77  I 

DEFENSES  —generally  —  continued. 

by  bailee,  107  //. 
DEFINITION  of  fraud,  none  possible,  13. 

judgment  of  law  on  facts  and  intents,  13. 

undue  influence,  13  //. 

of  insolvency,  273. 

of  badge  of  fraud,  225. 

of  general  assignment,  316. 

of  fraudulent  conveyances,  15. 

of  creditors'  bill,  68. 
DEFRAUDED  VENDOR,  tracing  fund,  44. 

relief  to,  399. 
DEGREES  of  guilt,  399,  400. 
DELAWARE,  spendthrift  trusts,  367a. 

change  of  possession,  251. 
DELAY,  sales  upon  credit,  240,  332,  ^t,t,. 

exceptional  rule,  2>Z2>a- 

and  hindrance,  11,  318. 

applied  to  general  assignments,  318,  2,2>Z- 

defraud,  and  hinder,  n. 

refers  to  time,  318. 

hindrance  to  obstacles,  318. 

debtor  cannot  secure,  318. 
DELAY  OF  CREDITORS,  11,  318. 

and  hinder,  11. 

explaining,  in  pleading,  149. 

refers  to  time,  318. 

hindrance  to  obstacles,  318. 

debtor  cannot  secure,  11. 
DELIVERY,   245-267. 

See  Change  of  Possession. 

essential  to  validity  of  sale  as  against  creditors,  245-267. 

failure  to  effect,  presumption  of  fraud,  248. 

conflicting  policies  as  to,  252. 

must  be  actual,  253. 

must  be  continuous,  257,  258. 

of  growing  crops,  266. 

of  possession  of  realty,  264. 

when  not  essential,  261,  262. 

symbolical,  262. 

of  deed  should  be  averred,  140  //. 

assignment  takes  effect  from,  316a. 
DENIAL  IN  ANSWER,  158-162. 


772  References^        INDEX.        [are  to  sections. 

DENIAL  IN  A N S \Y E R  —  continued. 

particularity  of,  162. 

of  fraud  or  notice,,  163. 
DENYING  FRAUD  or  notice,  163. 
DESCRIPTION  in  complaint,  157. 

assets  need  not  be  specifically  disclosed,  157. 

sufficient  to  operate  as  lis  pendens,  157. 

discovery  may  be  called  for,  157. 

in  marriage  settlement,  157  n. 

vague,  as  badge  of  fraud,  230. 

amendment  of  complaint,  156. 
DEVICES,  ineffectual"  against  creditors,  15. 
DEVISE  OF  PROFITS  is  devise  of  land,  362. 
DIRECTORS,  suits  against,  1330. 

rule  of  liability,  i33<?. 
DIRECT  AND  COLLATERAL  ATTACK,  69. 

necessity  for,  69. 

exceptional  doctrine  in  Louisiana,  69. 

merits  of  rule,  discussed,  69. 
DISBURSEMENTS,  of  assignee,  319a. 
DISCHARGE,  in  insolvency  or  bankruptcy,  294. 
DISCOVERY,  seeking,  147. 

of  fraud,  statute  begins  to  run,  290,  291. 

New  York  rule,  149. 

creditors'  bill  is  in  nature  of,  68,  68  n. 

advantages  of,  68  ;/. 

pleading  to  the  discovery  and  the  relief,  161. 

avoiding  discovery,  159,  165. 

of  lands,  inherited  or  devised,  157. 

and  knowledge,  not  convertible,  148  n. 
DISCRETION,  granting  bill  of  particulars  rests  in,  162*7. 

removal  of  receiver  is  matter  of,  190. 
DISHONEST  PURPOSE  not  presumed,  5. 

not  necessary  to  defeat  conveyance,  8,  9,  10,  382. 

secret  removal  of  property,  234. 
DISJUNCTIVE,  words  hinder,  delay  or  defraud  used  in,  11. 
DISMISSAL  of  receiver,  190. 

of  assignee,  337. 
DISPARITY,  as  to  consideration,  6,  232. 

must  be  glaring,  6,  232. 
DISPOSED,  word  construed,  12. 
DISSOLUTE  man,  conveyance  by,  213  //. 
DISSOLUTION,  appointment  of  receiver  does  not  effect,  134. 


References]        INDEX.         \are  to  sections.  JJ^ 

DISSOLUTION  —continued. 

of  firm,  exemptions,  48. 
DISTINCT,  claims  united,  54. 

defenses,   158. 

claims  under  chattel  mortgage,  359^. 
DISTINCTION,  existing  and  subsequent  creditors,  89. 

fraud  in  fact  and  fraud  in  law,  9,  10,  322,  382. 
DISTRIBUTEES,  reaching  money  of,  33. 
DISTRICT  OF  COLUMBIA,  statute  of  Elizabeth  in,  19  //. 

change  of  possession,  250. 
DIVIDEND,  to  defeated  creditor,  345/'. 

collaterals  not  considered,  51  n. 
DIVISION,  certificate  of,  review,  407^. 
DIVORCE,  after,  when  wife  cannot  overturn  conveyance,  395  //. 

conveyance  to  defeat  alimony,  no  //. 

right  of  wife  against  trust  income,  45. 
DOMICIL,  law  of,  governs,  64. 

when  law  of,  yields,  65. 
DOWER  RIGHT,  creditors  may  reach,  30. 

before  admeasurement,  33. 

in  supplementary  proceedings,  61. 

relief  in  cases  of  fraud  on,  70. 

relinquishment  as  consideration  for  settlement,  299. 
DURESS,  obtaining  instrument  under,  347. 
DUTIES,  of  assignee,  319^. 

EARLY  STATUTES  avoiding  fraudulent  conveyances,  18. 

declaratory  of  common  law,  16. 

object  of  statutes,  18. 

13  Eliz.,c.  5,  and  its  object,  19. 

its  interpretation  and  construction,  20. 

27  Eliz.,  c.  4,  and  its  object,  21. 
EARNINGS,  not  liable  in  supplementary  proceedings,  61  n. 

exempt  for  sixty  days,  61  n. 

of  daughter,  218. 

of  wife,  218. 

of  members  of  family,  ,218. 
EDUCATION  of  debtor,  as  regards  income,  45- 
EJECTMENT  and  equitable  relief  united,  51,  51  n,  54- 

conflict  in  the  cases,  54. 

no  receiver  in,  187. 

theory  of  the  law,  187. 

rule  as  to  receiver  in  New  York,  187. 


774  References^        INDEX.         [are  to  sections. 

EJECTMENT  —  continued. 

conveyance  avoided  in,  51. 

by  execution  purchaser,  57. 

when  purchaser  may  defend  in,  69. 

what  may  be  shown,  69  n. 

question  of  fraud  tested  by  jury  in,  123. 
ELDON,  LORD,  views  of,  as  to  restrictions  on  life  estate,  364. 
ELECTION  OF  REMEDIES,  67,  316  n. 

debtor  or  alienee  cannot  compel,  67. 

creditor  bound  by,  67. 
ELIZABETH,  statutes  of,  19-21. 

object  of,  11,  19. 

to  prevent  deeds  fraudulent  in  their  concoction,  19. 

interpretation  and  construction  of,  20. 

interpretation  refers  to  legal  intent,  8. 

bottomed  on  immoral  intention,  9  //. 

merely  declaratory  of  common  law,  16. 

universally  adopted,  19,  22. 

Mr.  Reeves'  comments  upon,  19. 

preamble  to,  25. 

subsequent  creditors  not  mentioned,  98. 
EMBARRASSED  DEBTOR,  conveyance  by,  99,  273. 

conveyance  to  defeat  attachment,  n. 

when  considered  valid,  99. 

the  cases  criticised,  99. 

the  conclusion  drawn  from  them,  99. 
EMOTION,  intent  is,  8,  196,  196  n. 

not  conclusive,  197,  322,  382. 

fraud  without  evil  emotion,  8,  382. 
EMPLOYMENT,  of  husband  by  wife,  303. 

of  assignors,  345,  390  n. 
ENFORCING  promises  of  third  parties,  43. 

judgment  at  law,  170a. 
ENGLAND,  Twyne's  case  in,  22. 

statute  of  Elizabeth,  19,  21. 

statute  of  Victoria,  93. 
ENGLISH  STATUTES  as  to  property  recoverable,  25. 

concerning  fraudulent  conveyances,  16,  18,  19-22. 
ENTIRETY,  estate  in,  husband's  interest  liable,  29. 
EQUALLY  GUILTY,  defendants  need  not  be,  130. 
EQUILIBRIUM,  of  evidence,  does  not  prove  fraud,  5 
EQUITABLE  fraud,  meaning  of,  51. 

subrogation,  when  not  applied,  195  n. 


References^        INDEX.         |  a  re  to  sections.  JJC 

EQUITABLE  —  continued. 

estoppel,  287. 
EQUITABLE  INTERESTS,  30. 

frequent  subject-matter  of  creditors'  suits,  30. 

action,  judgment  in,  80. 

suit,  60. 

jurisdiction,  4,  51,  56,  60. 

levy,  68,  392- 

in  real  property,  situs  governs,  24. 
EQUITABLE,  lis  pendens,  392. 
EQUITIES  are  equal,  law  prevails,  370. 

applied  to  bona  fide  purchasers,  370. 
EQUITY,  invoked  in  two  cases,  51. 

See  Creditors'  Remedies. 

in  furtherance  of  remedy  at  law,  51. 

to  reach  equitable  rights,  51,  60. 

jurisdiction  more  extensive  than  at  law,  51,  51  n. 

reasons  for  resort  to,  51,  60,  176  n. 

purchase  at  law  either  valid  or  void,  51. 

different  rule  in  equity,  51. 

when  jurisdiction  exclusive,  56. 

relief  before  and  after  sale,  58. 

the  jurisdiction  explained,  58,  60. 

jurisdiction,  its  great  importance,  60. 

proceeds  without  regard  to  forms,  60,  60  n. 

jurisdiction  once  acquired  holds  throughout,  63. 

jurisdiction  of  trusts,  56. 

will  restrain  fictitious  demand,  74  n. 

objection  to  jurisdiction,  88,  88  n. 

power  of,  to  protect  right  of  dower,  70. 

not  remedy  to  collect  debts,  73. 

of  a  creditor,  1 10. 

pleadings  in,  rules  of,  146. 

limitations  in,  293. 

procedure  in  federal  courts,  71. 

cannot  create  a  title,  60  //. 
EQUITY  OF  REDEMPTION,  available  to  creditors,  31. 

transaction  to  conceal,  31. 
ERRONEOUS,  judgment,  correction  of,  172. 
ESTATES,  in  remainder  and  reversion,  29,  30. 

vested  remainder  liable  for  debts,  29. 

attempted  exemption  of,  29,  360-368. 

contingent  reversionary  interest,  29. 


776  References^        INDEX.         \art  to  sections. 

ESTATES  —  continued. 

creditors'  bills  against,  68. 

no  preference  to  vigilant  creditors,  392. 

expectant,  may  be  reached,  24. 
ESTOPPEL,  equitable,  287. 

to  attack,  316  //. 

notice  of  alienation,  106. 

judgment  is,  168. 
EVIDENCE,  268-285. 
See  Badges  of  Fraud  —  Consideration  —  Defenses  —  Inten- 
tion. 

to  prove  fraud,  5,  6. 

of  solvency,  95. 

creating  equilibrium  insufficient,  5. 

to  annual  instrument  in  writing,  6. 

not  to  be  pleaded,  142. 

to  vary  recital  of  consideration,  221. 

recitals  in  deed,  284a. 
(1.)   Concerning  evidence,  268. 

burden  of  proof,  268,  271. 

how  changed,  271. 

answer  as,  160. 

personal  transactions  with  decedent,  121. 

omnia  prozsumunter  contra  spoliator  em,  281. 

books  of  account,  27 1</. 

professions  of  good  faith,  279a. 

intention,  knowledge,  279^. 

takes  a  wide  range,  268. 

secret  trust,  272. 

interpretation  of  contracts,  268. 

acts  and  statements  of  debtor,  268. 

objections  must  be  specified,  269. 

schedules  as  evidence,  274. 
(2.)   Proof  and  conclusiveness  of  judgment,  270. 

judgment  essential  to  creditor's  proceeding,  74-77,  270 

evidence  until  impeached,  270. 

attacking  for  collusion,  270,  74  n. 
(3.)  Insolvency  of  debtor,  273. 

application  of  the  term,  273 

who  considered  solvent,  273. 

evidence  of  insolvency,  87,  87  n,  273. 

illustrations,  273. 

general  repute  as  to,  273. 


References^        INDEX.        [a re  to  sections.  JJJ 

EVIDENCE  —  insolvency  of  debtor  —  continued. 

opinion  as  to,  273,  273  n. 
(4.)  Insolvency  of  vendee,  274. 

effect  of  proof  of,  274. 

shown  by  general  repute,  274. 

insolvency  of  corporation,  273,  273  n. 
(5 . )    General  reputation,  275. 

evidence  of,  admitted,  275. 

tendency  and  effect  of  proof  of,  275. 
( 6 . )   Concerning  res  gestoz,  276. 

declarations  admissible,  276. 

duty  of  jury  to  weigh,  276. 

importance  of  the  doctrine,  276. 
(7.)   Declarations,  rule  as  to,  277,  278. 

before  sale,  admissible,  277. 

theory  governing  their  admission,  277. 

concerning  personality,  excluded,  277. 

declarations  after  sale,  277. 

excluded  as  mere  hearsay,  278. 

illustrations,  278. 
(8.)  Possession  after  conveyance,  279. 

effect  of  proof  of,  279. 

declarations  characterizing,  279. 

constitute  part  of  res  gestce,  279. 
(9.)  Declarations  of  co-conspirators,  280. 

in  execution  of  common  purpose,  280. 

proposed  acts  must  be  sui  juris  with  those  committed,  280. 

foundation  for,  280. 

prima  facie  case  must  be  shown,  280. 

admissions  of  declarations,  280. 

as  to  past  transactions,  incompetent,  280. 

not  admissible  to  prove  the  conspiracy,  280. 

received  to  show  its  scope,  280. 
(10.)  Proof  of  circumstances,  281.  * 

must  be  persuasive,  5,  6. 

great  latitude  permitted,  281. 
,  objections  for  irrelevancy,  not  favored,  281. 

wide  range  of  inquiry,  281. 

must  be  strong  and  cogent,  281. 

the  test  given,  281. 

latitude  of  the  inquiry,  281  n. 

collateral  facts,  proof  of,  281. 
(11.)   Other  frauds,  282. 


778  References']        INDEX.         [_are  to  sections. 

E  V I D  E  N  C  E  —  other  frauds  —  continued. 

proof  of  commission  of,  282. 

intent  the  object  of  inquiry,  282. 

other  similar  acts  show  it,  282. 

independent  acts  and  declarations,  282. 

scope  of  the  inquiry,  282. 

exception  to  the  rule,  282. 
(12.)   Suspicions  insufficient,  3,  5,  6,  283. 

tangible  facts  must  be  shown,  283. 

of  fraud,  not  notice  of  it,  283. 
(13.)   Generally,  284,  285. 

proving  value  by  experts,  284. 

testimony  must  conform  to  pleading,  285. 

consideration,  279^,  207-223. 
EVIDENCE  OF  FRAUD,   generally  circumstantial,  13. 

proof  of  circumstances  as,  281. 

great  latitude  allowed,  281. 

direct  proof  not  attainable,  13. 

the  test,  281. 

proof  of  collateral  facts,  281. 

other  frauds,  282. 

declarations,  280. 
EVIDENCE  OF  INTENTION,  when  cannot  change  presumption, 

9,  322,  382. 

when  not  necessary  to  establish  frauds,  8-10,  382. 

of  solvency,  95. 

not  to  be  pleaded,  142. 

answer  as,  160. 

of  secrecy,  234. 

of  wife,  313. 

See  Intention. 
EXAGGERATED,  indebtedness  badge  of  fraud,  228. 
EXCEPTIONS  to  rule  concerning  injunction  against  debtor,  53. 

receivership,  when  allowed  before  judgment,  53. 
EXCESS,  of  property  mortgaged,  238^. 

of  debt,  taking  mortgage  in,  347. 
EXCHANGE,  of  property,  211a. 
EXCLUSIVE  jurisdiction  in  equity,  56. 

property  not  subject  to  legal  process,  56. 

as  to  choses  in  action,  22,  ^1,  56. 

supplementary  proceedings  not,  61. 

suits  by  personal  representatives  not,  112. 
EXCUSING  want  of  change  of  possession,  263. 


References^        INDEX.        [are  to  sections.  77Q 

EXCUSING  —  continued. 

rebutting  presumptions  of  fraud,  263. 

laches,  148. 
EXECUTION,  contingent  remainder  not  liable  to,  29  n. 

seat  in  stock  exchange  not  liable  to,  35  //. 

property  purchased  in  name  of  third  party,  57. 

remedy  by,  59. 

to  county  of  debtor's  residence,  68. 

must  precede  creditor's  bill,  68. 

return  of,  unsatisfied,  74,  68,  86,  86  n. 

return  of  officer  conclusive,  74. 

when  execution  excused,  75. 

New  York  rule  explained,  86  //. 

conflict  in  New  York,  86. 

Supreme  Court  rule,  86  n. 

distinction  between  realty  and  personalty  as  to,  87. 

raising  the  objection,  88. 

what  bill  should  allege  as  to,   88. 

where  jurisdiction  is  concurrent,  51. 

selling  land  under,  72. 

in  State  where  land  lies,  83. 

what  bill  should  show  as  to,  88. 

not  reach  proceeds  of  power,  40  n. 

return  of,  evidence  of  insolvency,  273. 

purchaser,  may  bring  suit  to  set  aside  deed,  371a. 
EXECUTORS  AND  ADMINISTRATORS,  as  complainants,  112, 

"3- 

New  York  legislation,  112. 

as  defendants,  136. 

as  fraudulent  grantees,  77. 

conveyance  binding  upon,  112,  113,  398. 

may  sue  for  canceled  debt,  42. 

complaint  by,  143. 

judgment  against,  77. 
EXEMPTING  assignee  from  liability,  334. 

renders  assignment  void,  334. 

theory  of  the  law,  334. 
EXEMPTIONS,  rule  as  to,  46-50,  50a. 

policy  of  the  law,  365. 

no  restriction  on  legislation,  46  n. 

reservation  of,  in  assignments,  326. 

does  not  render  assignment  void,  326. 

do  not  pass  by  assignment,  316a. 


ySO  References^        INDEX.         [are  to  sections. 

EXEMPTIONS  —  continued. 

receiver  gets  no  title  to,  46. 

endure  for  life-time,  46. 

aversion  to  exemptions  not  statutory,  360. 

fraudulent  purchase  of,  47. 

purchase  on  eve  of  insolvency,  47. 

covinous  alienations  of,  48. 

conflicting  cases,  49. 

forfeited  by  fraud,  49. 

equivocation  as  to,  49,  49  n. 

what  cannot  be  reached,  50a. 

crops  on  exempt  lands,  reached,  27. 

pension  money  in  lands,  46. 

must  exist  at  date  of  transfer,  46. 

partnership  property  not  exempt,  48. 

on  dissolution  of  firm,  48. 
EXHAUSTING  LEGAL  REMEDY,  73,  86. 

object  of,  73. 

establishes  claim,  73. 

saves  debtor  from  interference,  52,  73. 
EXISTING  CREDITORS,  89-95. 

See  Subsequent  Creditors. 
(1.)   Classes  of  creditors,  existing  and  subsequent,  8c 

who  are  existing  creditors,  89. 

renewal  creditor,  89. 

change  of  securities,  89. 

subsequent  creditors,  89,  96,  97. 
their  respective  rights,  89,  96. 

may  join  in  Alabama,  108  ;/. 

decree  when  not  binding,  on,  168. 
(2.)   Contingent  creditors,  90. 

wife  and  surety  as  creditors,  90. 

indorser  and  warrantor,  90. 

municipal  corporation, 90. 

date  of  agreement  governs,  90. 

tort  claimant,  90. 

remainderman,  90. 

who  are  not  creditors,  91. 

acquiescence,  91. 

transfer  of  right  to  sue,  92. 
(3.)    Voluntary  alienations  as  to,  93,  94. 

presumptively  fraudulent,  94. 

New  York  rule,  93. 


References^        INDF.X.         f  arc  to  sections.  "Si 

EXISTING  CREDITORS  —  voluntary  alienations  —  continued. 

modern  English  rule,  93. 

early  conflict  as  to,  93. 

recent  cases,  94. 
EXPECTANT  ESTATE,  may  be  reached,  24. 

assignment  of,  vacated,  29. 
EXPENSES,  when  chargeable  to  common  fund,  109. 

of  rescuing  property,  109. 
EXPERTS,  proving  value  by,  284. 

illustrations,  284. 
EXPLAINING  delay,  discovery  of  fraud,  149. 

judgment,   270. 

recitals  of  consideration,  221. 

contradicting  allegations  of  deed,  221. 

substituting  valuable  for  good  consideration,  221. 
EXPLICIT  PROOF,  not  exacted,  5. 
EXTENDING  UNUSUAL  CREDIT,  as  evidence  of  fraud,  241. 

FACTS,  sufficient  to  excite  inquiry,  379,  380,  381. 

as  notice  of  fraud,  379-381. 

may  be  implied,  142. 

means  of  knowledge,  381. 

the  test,  380,  381. 

admitted  in  pleading,  285. 

equity  deals  with,  60. 

to  establish  fraud,  5. 

must  be  substantial,  5. 
FAILURE,  to  record,  ioi,  235,  236,  237. 
FAIR  PREPONDERANCE,  fraud  must  be  shown  by,  271. 
FAMILY,  services  by  members  of,  218. 

by  daughter  to  debtor,  218. 

no  promise  to  pay  implied,  218. 

wife  to  husband,  218. 

when  claim  of  cannot  be  collected,  218. 

insurance  for,  23. 
FATHER,  gift  by,  improvements,  296. 

to  son,  sale  by,  242. 
FEDERAL  COURTS,  rules  of  procedure  in,  61  «,  71. 

supplementary  proceedings  in,  61  ;/. 

not  allowed  in  State  court  on  federal  judgment,  61  «,  78, 
78  n. 

rules  of  property  in,  20,  71. 

local  rules  govern  in,  20. 


782  References']        INDEX.         [are  to  sections. 

FEDERAL  COURTS—  continued. 

State  decisions  followed,  71. 

as  to  fraudulent  and  voluntary  assignments,  71. 

pauper  litigants  in,  71. 

chancery  practice  prevads,  51,  71. 

suit  against  stockholder  in,  139. 

judgment  in,  78,  78  ;/. 

bill  in  equity  in,  68  ;/. 

no  bill  by  simple  contract  creditor,  71. 

not  interefere  with  State  receiver,  117. 

as  to  change  of  possession,  250. 
FEDERAL  TRIBUNALS,  procedure  in,  71,  407,  4°7<*- 

heirs  and  devisees  as  parties,  136. 

local  rule  governs  in,  20. 
FICTITIOUS  CONSIDERATION,  recital  of,  badge  of  fraud,  228. 

either  in  mortgage  or  conveyance,  228. 

to  be  considered  by  jury,  228. 

not  fraud  per  se,  228. 

immaterial  mis-recital,  228. 

to  be  fraudulent  must  be  intentional,  228. 
FICTITIOUS,  grantee,  setting  aside  deed,  131. 

claim  may  avoid  assignment,  320. 

debt,  avoids  assignment,  345. 
FIELD  OF  INQUIRY,  must  be  broad,  6. 
FILING  chattel  mortgage,  347  n. 

FINES,  conveyance  to  defeat,  attached  by  State,  123  n. 
FIRM,  judgment  creditor  of,  suit  by,  108. 

exemptions  of,  48. 

assignments  by,  319^. 

fraud  in  firm  creditors,  216. 

assets  of,  how  distributed,  216. 
FLEXIBLE  JURISDICTION  OF  EQUITY,  60,  193  n. 
FORECLOSURE,  proceedings  attacking  fraudulent  conveyance,  63. 

in  surplus-money  proceedings,  63. 

receiver  in  foreclosure,  187  n. 
FOREIGN  JUDGMENT,    does    not    have    the    force  of  domestic 
judgment,  78. 

rule  as  to,  stated,  78. 

federal  court  judgment,  78,  78  n. 

government,  claims  against,  pass  to  asignee,  114. 

assignments,  346. 

statutes,  no  force  ex  proprio  vigore,  405  /;. 

receiver  as  complainant,  118. 


References]        INDEX.         [are  to  sections.  "X  ^ 

FOREIGN  RECEIVERS,  recognized  by  comity,  m 

FORMS,  equity  looks  beyond,  60. 

FORMS  OF  LAW,  observance  of,  will  not  save  transaction,  5,  5  //. 

FORMS  OF  RELIEF,  4,  51-72. 

See  (  'kkditoks'  Rkmi  di  i 

not  regarded  in  equity,  60. 

in  cases  of  fraud  on  wife,  70. 
FRAMING  ISSUES,  for  jury,  51,  5.  n. 
FRAUD,  divisions  of,  10. 

never  presumed,  5,  5  ;/,  6. 

under  forms  of  law,  5  n. 

not  proved  positively,  7. 

tested  by  human  nature,  7. 

more  extensive  signification  in  equity  than  at  law,  60. 

compounded  of  law  and  fact,  13  n. 

equitable,  51. 

rule  as  to  pleading,  141. 

fraud  in  law  and  fraud  in  fact,  10. 

no  definition  of,  13. 

proof  of,  5,  6. 

evidence  must  be  persuasive,  5. 

loves  darkness,  6. 

under  bankrupt  act,  13  ;/. 

as  to  existing  creditors,  89-95. 

as  to  subsequent  creditors,  96-106. 

lies  in  intent  to  deceive,  141. 

general  charge  of,  insufficient,  141. 

indicia  or  badges  of,  224-244. 
FRAUD  INFERRED  FROM  TRUST,  an  inference  of  law,  10  //. 
FRAUD  IN  LAW  and  fraud  in  fact,  9,  9  //,  10,  382. 

distinction  discussed,  9,  9  /z,  10,  382. 

different  intent  cannot  be  shown,  9. 

cases  explained,  9,  9  n,  10. 
FRAUD,  MUST  BE  PROVED,  5,  5  «,  283. 

one  of  recognized  heads  of  equity  jurisdiction,  60. 

is  intention  carried  out  by   hurtful  acts,  13,  196. 

as  a  legal  deduction,  10. 

to  annul  written  instrument,  6. 

possession  as  proof  of,  247. 

character  of,  6. 

perpetrated  in  secret,  6. 

may  be  unintentionally  committed,  8. 

pleading  fraud,  141. 


784  References'}        INDEX.        \are  to  sections. 

FRAUD,  MUST  BE  PROVED  —  continued. 

word  need  not  be  used,  141. 

cannot  be  denned,  13. 

nature  and  effect  of,  considered,  13. 

constructive,  323. 

suspicions  as  to,  insufficient,  5,  283. 

shown  from  circumstances,  281. 

the  test,  281. 

equilibrium  will  not  establish,  5. 

disconnected  acts  as  evidence,  280,  282. 

in  conveyances,  characteristics,  15. 

badges  of,  224-244. 

in  fact  and  in  law,  8,  9,  10,  322,  382. 

as  to  existing  creditors,  82-95. 

as  to  subsequent  creditors,  96-106. 

irregularities  and  carelessness,  5. 
FRAUDS,  statute  of,  agreement  out  of,  296. 
FRAUDULENT,  conveyance  of  equity  of  redemption,  31. 

purpose,  when  harmless,  107. 
FRAUDULENT  CHATTEL  MORTGAGES,  347-359^- 

See  Chattel  Mortgages. 
FRAUDULENT  CONVEYANCES,  defined,  15. 

classes  of,  15. 

necessary  elements  of,  15. 

at  common  law,  16. 

statutes  declaratory,  16. 

early  statutes  avoiding,  18. 

property  that  may  be  reached;  23-50. 

grantee,  creditors  of,  387. 

liability  between,  388. 

grantees  sharing  in  recovery,  389. 

valid  between  the  parties,  395-400. 
FRAUDULENT  GENERAL  ASSIGNMENTS,  316-346. 
(1.)    Voluntary  assignments,  316. 

general  comments,  316. 

claimed  to  be  American  devise,  316. 

defined,  316. 

made  in  absence  of  statute,  316. 

right  exists  at  common  law,  316. 

change  of  possession,  316. 

property  transferred,  3160. 

property  that  does  not  pass,  316a. 


References  |        INDEX.         [are  to  sections.  785 

FRAUDULENT  GENERAL  ASSIGNMENTS— voluntary— cont'd. 

delivery  of  assignment  essential,  316a,  316a,  ;/. 

assent  of  assignee,  316/;. 

rights  of  assignee,  319a. 

trust  fund  in  assignee's  hands,  319a. 

antecedent  agreement  to  prefer,  342^. 

property  not  in  custodia  legis,  316. 

assignee  quasi-public  officer,  316. 

assignee  not  officer  of  court,  316. 

must  obey  provisions  of  assignment,  316. 

derives  authority  from  instrument,  316. 

control  of  court  over,  316. 

parties  cannot  change  character  of,  316. 

assignor  cannot  substitute  successor  to  assignee,  316. 

assent  of  assignee,  316^. 

creditors'  proceedings,  316c 

word  void  construed,  317. 
(2.)  Delay  and  hindrance,  31 8. 

meaning  of  delay,  318. 

of  hindrance,  318. 

instances,  31S. 
(3.)  Intent  affecting  assignment,  319. 

actual  intent  not  exclusive  test,  319. 

of  assignor  generally  governs,  319. 

conflict  in  the  cases,  319. 

drift  of  the  cases,  319. 

suggestions  as  to  correct  procedure,  319. 
(4.)  Partnership  assignments,  319^. 

courts  protect  from  creditors,  319^. 

all  partners  must  join,  319^. 

special  partner  need  not  join,  319^. 

limited  partnership,  cannot  prefer,  319^. 

acknowledgment  of  instrument,  319^. 

preferring  a  partner,  329. 
(5.)   Fraud  must  relate  to  instrument  itself,  320. 

subequent  illegal  acts  immaterial,  320. 

independent  acts  not  considered,  320. 

preferring  fictitious  claim,  320. 

effect  of  omission  from  schedules,  320. 
(6.)   Good  faith,  321. 

means  "  sincerity  or  honesty  of  purpose,"  321. 

presumption  of,  appertains  to  asignments,  321. 

mistake  not  fatal,  321. 
50 


786  References]        INDEX.         \are  to  sections. 

FRAUDULENT  GENERAL  ASSIGNMENTS—  continued. 

(7.)    Void  on  its  face,  9,  10,  322. 

instances  given,  322. 

actual  motive  or  belief  immaterial,  322. 

power  to  reform,  322a. 

purchaser  under  void  assignment,  322a. 
(8.)   Contravening  statutes,  324. 

burden  on  creditor,  324. 

may  be  avoided,  324. 

an  illustration,  324. 
(9.)    Transfers  to  prevent  sacrifice,  325. 

will  be  set  aside,  325. 
(10.)  Reservations,  326. 

when  fatal  to  instrument,  272,  326. 

for  debtor's  benefit,  326. 

of  exempt  property  not  fraudulent,  326. 

reserving  surplus,  327. 

apparent  conflict  in  the  cases,  327. 

preferring  claims  in  which  assignor  is  partner,  329. 
(11.)   Releases  exacted  in  assignments,  328. 

looked  upon  with  disfavor,  328. 

render  assignments  fraudulent,  when,  328. 

different  cases  considered,  328. 
(12.)    Authorizing  trustee  to  continue  business,  330,  331. 

when  such  provisions  permissible,  331. 

power  to  continue  a  school  illegal,  331. 
(13.)   Delay  sales  upon  credit,  332,  333. 

creditors'  right  of  immediate  payment,  332. 

holding  realty  two  years  void,  332. 

the  cases  reviewed,  332,  333. 

exceptional  rule,  333a. 
(14.)  Exempting  assignee  from  liability,  334. 

renders  assignment  void,  334. 
(15.)   Other  features,  335,  337. 

authority  to  compromise,  336. 

fraud  of  assignee,  337. 

providing  for  counsel  fees,  335. 

assets  exceeding  liabilities,  340. 

excessive  preferences,  341a. 

preferences  to  laborers,  341b. 

notice  to  preferred  creditors,  341^. 

bill  of  particulars,  34id. 

assignments  to  prevent  preference,  341. 

threatening  to  make  assignment,  342. 


References]        INDEX.         [art  i      ■ 

FRAUDULENT  GENERAL  ASSIGNMENTS  —  continued. 

(16.)    Transfers  inuring  as  assignments,  339. 

White  v.  Cotzhausen,  339a. 

conflict  in  the  cases,  339a. 
(17.)   Incompetency  ami  removal  of  assignee,  337, 

badge  of  fraud,  338. 

word  "  incompetency  "  construed,  3 

conflicting  interests,  337. 

selection  of  blind  assignee,  3 
(18.)   Construction  of  assignment,  20  ;/,  343. 

rules  applicable  to,  20  n,  343. 

explaining  obnoxious  provisions,  344. 

assignments  held  void,  345. 

insufficient  grounds  of  attack,  345a  . 
(19.)  Foreign  assignments,  346. 

operate  as  matter  of  comity,  346. 
(20.)   Generally,  defeated   creditor  entitled  to  dividend,  345^. 

assignments  by  corporations,  346a. 

contingent  creditors,  346^. 

preference  on  eve  of,  391^. 
FRAUDULENT  GRANTEES,  valid  title  from,  386. 

as  defendants,  131. 

proceedings  futile,  if  omitted,  131. 

intermediate  grantees,  131. 

as  trustees,  385. 

creditors  of,  387. 

liability  between,  388. 

sharing  in  recovery,  389. 
FRAUDULENT  INTENT,  fact  for  jury,  9,  204. 

allegations  concerning,  145. 

when  res  adjudicata,  203. 

where  consideration  is  adequate,  201. 

proving  intent,  206. 

of  agent  binding  on  principal,  198. 

actual,  not  decisive,  197,  382. 

mutuality  of  participation  in,  199,  302.  319. 
See  Intention. 
FRAUDULENT  JUDGMENTS,  removed,  51  n 

set  aside  in  equity,  60. 
FRAUDULENT  PARTY,  not  protected  from  loss,  195. 
FRAUDULENT  PURCHASES  OF  EXEMPTIONS,  47- 

legality  of,  47. 

conflicting  cases  as  to,  49,  50. 
FRAUDULENT  transferee,  judgment  against,  3  n,  176-1S0. 


788  References^        INDEX.         [are  to  sections. 

FRAUDULENT  TRANSFERS,  prevalence  of,  2. 

cause  of,  2. 

of  choses  in  action,  17,  33. 

of  exemptions,  47. 

early  statutes  avoiding,  18. 

characteristics  and  classes  of,  15. 
FRAUDULENT  vendee,  liability  of,  176,  178,  195. 
FUND  may  be  traced  by  creditors,  44. 

followed,  in  new  investment,  44. 

the  rule  illustrated,  44. 

lien  on  the  mass,  44  //. 
FUTURE  ADVANCES,  rule  as  to,  217. 

judgment  or  mortgage  for,  217. 

should  be  shown  on  face  of  lien,  217. 
FUTURE  INCOME,  creditor  may  reach,  45. 
FUTURE,  schemes  of  fraud,  96,  202. 

creditors,  intent  to  defraud,  98,  202. 
FUTURE  SERVICES,  as  consideration,  223. 

GENERAL  ALLEGATIONS  of  fraud  of  no  value,  141. 
GENERAL  ASSIGNMENT,  316-346. 

See  Fraudulent  General  Assignment. 

will  supplant  suit,  when,  23. 

character  of,  316. 

property  transferred  by,  316^. 

surviving  partner  may  make,  319/',  329. 

all  partners  must  join,  319^. 

when  void,  345. 

by  corporation,  3460. 

specific  assignment  is  not,  339. 

threatening  to  make,  342,  342  /;. 

construction  of,  343. 

assignee  under,  as  complainant,  115. 
GENERAL  DENIAL,  evidence  under,  158. 

valid  title  may  be  shown  under,  158. 
GENERAL  REPUTATION,   evidence  of,  allowed,  275. 

as  to  absence  of  means  in  vendee,  274. 

as  to  want  of  credit,  275. 

is  competent,  275. 
GENERALITY  of  gift  or  conveyance,  22,  231. 

evidence  or  badge  of  fraud,  231. 

commented  on  in  Twyne's  case,  22. 

views  of  Lowell,  J.,  231. 

creating  violent  presumption  of  fraud,  231. 


References^        INDEX.         [are  to  sections.  789 

GENERALITY  -  continued. 

considered  unusual  and  extraordinary,  231. 

various  comments,  231. 
GENEROSITY,  when  not  evidence  of  fraud,  5. 
GEORGIA,  spendthrift  trusts  in,  367a. 
GIFT,  condition  repugnant  to,  void,  362. 

oral,  title  by,  296. 

of  small  value  not  fraudulent,  41. 

from   husband  to  wife,  309. 

of  labor,  valid,  50^. 

as  badge  of  fraud,  309. 

generality  of,  as  evidence  of  fraud,  22,  231. 

to  charity,  217^. 
GOOD  and  valuable  consideration,  210. 

defined  by  Story,  210  n. 

See  Bona  Fide  Purchaser. 
GOOD  CHARACTER,  evidence  of,  275. 
GOOD  FAITH,  settled  presumption  of  law,  6. 

the  vital  question  in  these  suits,  196. 

and  consideration,  207. 

defined,  321. 

relating  to  fraudulent  assignments,  321. 

protecting  purchasers,  369,  372. 

professions  of,  279^. 
GRANT,  conditions  repugnant  to  void,  362,  363,  367. 

of  entire  estate,  evidence  of  fraud,  231. 
GRANTEE,  fraudulent,  as  trustee,  385. 

creditors  of,  387. 

when  they  may  seize  the  property,  387. 

doctrine  of  apparent  ownership,  387. 

liability  between,  388. 

sharing  in  recovery,  389. 

enforcing  fraudulent  deed,  402. 
GRANTING  AMENDMENTS,  discretionary,  156. 
GRANTOR'S  BENEFIT,  transfer  invalid,  211. 

secret  trust  for,  272. 

conveyances  fraudulent,  272. 
GRANTORS,  defrauded  of  property,  399,  4°°- 

aid  extended  to,  399,  400. 

degrees  of  guilt,  399. 
GRATUITY,  cannot  be  transformed  into  a  debt,  209. 
GRAY,  PROFESSOR,  views  as  to  spendthrift  trusts,  364  n,  366. 
GROSSLY  inadequate  consideration,  207,  232. 

will  overturn  transfer,  6,  232. 


INDEX. 

GROWING  CROPS,  change  of  p  :-  :66. 

unposs  *66. 

cc:  .  -     ::6. 

available  to  :::  _  it     -    :  - 

:  ■    ;  :      i  ■  -  -  I  -  :  - .   : " 
GUILTY  KNOWLEDGE,  of  debtor's 

ARSAY.     -  sale  " 

••  hearty       eviction 

BE  IRS      -  s,  121. 

■  :per  parties,  121. 
t  impeach  a 

121. 
testim    .      _    .  f2i. 
rea         g  53- 

i  •  - 
HINDEJ  -         stmed,  ii,  ii  *. 

5,    II. 

-:.t  to  do  either    -    B&c       "    n. 

ect  of  the  statute,  n. 

t,  24  556. 

dela;  -  to  time,  318. 

hindrance.-  obstacles 

HINDRANCE  AND  DELA.         -  :i. 

1  between,  1 1  n. 
I  tei     -     '  :  • 
es  upon  ere     t,  24c     $32  - 

HOMESTEAD,  abandcr. 
%< 

exemp- 

rill,  166. 
HONEST   PURPOS  :.  -.  6. 

HONESTY,  presumption  of,  pr e 
:  D 
es  to  be  impu:-: 

.  by  deb:   r    — 
HOSTI1 

HUMAN  NATURE,  know!-    g 


HUSBAND   AN1 


f 


confidence 

frauds  in  tl 

hush 

husband  m 

when  conv< 

:  i.  ~  : :  r  f 

- : :  z  :  u  r.  i 

'.     v. . ..  .  :.-... 

Transactumk 


K,  122,  a 

. ..-  - 

" 

l:;:r  ;:    v;:e     ;  .  . 

-• 

-: ;••  ::'    ■ .:-     : ;_ 

in  her  sepa  ite 

- 

: 

aero,  299. 

: : : 


4      - 


-mption  of  ownership 

: 

:.  rer.ier  ?r::le~e~:  zziziz  -:  .:    ;c: 


(6.)  Husband 


1  -    .        - 

wife  may      se  title  t    ere 

r. ;:    v.\r:r  ..;;:::::;::  ;.    .  ..;    rx;s:s.    ;c; 

3  . 

amour..  $06. 


7Q2  References']        INDEX.         [are  to  sections. 

HUSBAND  AND  WIFE  —  marriage  settlements  —  continued. 

when  avoided,  306. 

post-nuptial  settlements,  307. 

purchase  after  marriage,  308. 

gift  from  husband  to  wife,  309. 
(9.)   Fraudulent  conveyances  in  contemplation  of  marriage,  314. 

illustrations  of  the  enforcement  of  the  rule,  314. 

applies  to  both  husband  and  wife,  314. 

fraudulent  transfers  affecting  dower,  315. 
(10.)   Life  insurance,  23,  23  n,  312. 

creditors'  rights  in,  23,  23  n. 
(11.)  Estate  in  entirety,  29. 

husband's  interest  liable,  29. 

ILLEGAL,  consideration  is  no  consideration,  214. 

claim,  insufficient,  77. 

composition  preference,  393a. 
ILLICIT  INTERCOURSE,  illegal  consideration,  213. 
ILLINOIS,  return  of  execution,  86  ;/. 

trust  income  cases,  3670. 
IMPEACHING,  judgment,  78  n. 

burden  as  to,  74. 
IMPOSSIBLE,  to  secure  judgment,  84. 
IMPOUNDING,  proceeds  of  fraudulent  sale,  175. 
IMPRISONMENT,  of  debtor,  effect  of,  66. 

constitutes  satisfaction  of  claim  during  its  continuance,  66, 

termination  of  revives  remedy,  66. 
IMPROVEMENTS,  recovering,  26,  26  //,  192  n,  193  n. 

on  another's  land,  26. 

the  law  follows  them,  26. 

temporary  or  perishable,  26. 

by  husband  on  wife's  land,  26. 

to  support  gift,  296. 
INADEQUACY  of  purchase  price,  232. 

as  evidence  of  fraud,  6,  232. 

not  per  se  fraudulent,  232. 

illustrations,  232. 

does  not  per  se  prove  fraud,  232. 

unless  extremely  gross,  6,  232. 

the  test,  232. 

is  fact  calling  for  explanation,  232. 
INCEPTION  OF  TRANSACTION,  fraud  must  be  in,  227. 
INCHOATE  INTEREST  may  be  reached,  30. 


References^        INDEX.         [are  to  sections .  7g ■} 

INCHOATE  INTEREST  —continued. 

curtesy  and  dower,  30. 

unassigned  dower,  61. 
INCOME,  surplus  may  be  reached,  45,  360. 

See  Spendthrift  Trusts. 

the  rule  applied,  45,  360. 

exempt  earnings  for  sixty  days,  61  n. 

creditors'   lien  on,  45. 

burden  of  showing,  45. 

interest  of  wife  in,  45. 

station  in  life  of  debtor,  45. 
INCOMPETENCY  of  assignee,  338. 

badge  of  fraud,  338. 

ground  of  removal,  337. 
INCONSISTENT  DEFENSES,  may  be  set  up,  158. 
INCORPOREAL  RIGHT,  membership  of  stock  exchange  is,  35. 
INCUMBRANCES,  purchaser  removing,  126. 
INDEFINITE  TRUST,  fraudulent,  n. 
INDIAN  TERRITORY,  statute  of  Elizabeth  in,  16  n. 
INDIANA,  creditor's  bill  against  absconding  debtor,  84. 

exceptional  practice  in,  as  to  joinder  of  claims,  85. 

its  features  considered,  85. 

suit  by  general  creditor,  73  ;/. 

as  to  change  of  possession,  250. 

as  to  spendthrift  trusts,  3670. 
INDICIA  OF  FRAUD,  224-244. 

See  Badges  of  Fraud. 

are  circumstances  or  elments  of  fraud,  224. 

defined,  225,  225  //. 
INDICTMENT,   alleging  fraudulent   conveyance,    when   sufficient, 

65  n. 
INDIVIDUAL  and  copartnership  debts,  216. 

consideration  as  affecting,  216. 
INDORSER  as  creditor,  90. 

INDUSTRY  AND  TALENTS,  cannot  be  reached,  50*7. 
INFANT,  fraudulent  intent  applied  to,  199  n. 

no  participation  in  fraudulent  intent,  199  n. 

interest  in  parents'  trust  income,  45. 
INFERENCE,  of  fraud  from  circumstances,  7. 

of  fraud,  despite  honest  intent,  197. 

how  justified,  281. 
INJUNCTION  against  debtor  before  judgment,  not  allowed,  52,  185. 

theory  of  the  rule,  52. 


7Q4  References^        INDEX.         [are  to  sections. 

INJUNCTION  —  continued. 

exceptions  to  the  rule,  53,  185. 

vexation  and  hardship  incident  to  any  other  rule,  52. 

creditor  must  have  certain  claim,  52. 

against  debtor,  185,  186. 

against  sale,  185. 

against  encumbrancing  stock,  185. 

when  allowed,  185. 

when  disallowed,  186. 

not  allowed  to  wife,  when,  52. 

in  aid  of  attachement,  53,  185. 

in  cases  of  false  credit  and  disaffirmance,  53. 
INJURED  PARTIES,  only  can  assail  fraudulent  conveyances,  107. 
INNOCENCE,  presumed  in  actions  for  deceit,  5. 

of  assignee,  does  not  save  assignment,  319. 
INNOCENT  CONSTRUCTION,  to  be  preferred,  20,  20  n. 
INQUIRY,  facts  sufficient  to  excite,  379,  380. 

facts  that  constitute  notice  of  fraud,  380. 

scope  of,  in  this  work,  3. 

field  of,  broad,  6. 
INSIGNIFICANT  GIFTS,  not  avoided,  41. 
INSOLVENCY,  evidence  of,  239,  273. 

importance  of  proof  of,  239. 

as  proof  of  fraud,  239. 

considered  a  circumstance,  239. 

seeking  provisional  relief,  184. 

meaning  of  the  term,  273. 

opinions  as  to,  273. 

of  vendee,  274. 

proof  of,  271. 

continuing  business  after,  143  n. 

of  debtor,  evidence  of,  273. 

discharges  as  defense,  294. 

rule  as  to,  294. 

alleging  in  pleading,  143. 

when  must  exist,  143. 

defined,  143. 
INSOLVENT,  punished  under  early  law,  1,  1  n. 

proof  that  person  is,  239. 

station  in  life  as  regards  income,  45. 
INSOLVENT  CORPORATION,  capital  stock  of,  68  n,  117 

evidence  of  insolvency,  273,  273  n. 
See  Corporation. 
INSTRUMENT,  fraud  shown  by  separate,  6. 


References^        INDEX.         [are  to  sections.  7QC 

INSUFFICIENT  CONSIDERATION,  223. 

illustrations,  223,  232. 

judgments,  77. 

statement  of  confession,  174. 
INSUFFICIENT,  judgments,  77. 

grounds  to  attack  assignment,  345a. 
INSURANCE,  when  not  assignable,  23. 

policies,  rights  of  creditors,  23,  23  n,  312. 

by  married  man,  23. 

murder  to  secure,  20  //. 

when  not  in  fraud  of  creditors,  23  n. 

annual  premium  limited,  23. 

insurance  money  may  be  traced,  44. 
IN  PERSONAM,  judgment  to  sustain  supplementary  proceedings, 61. 

to  uphold  creditor's  suit,  77. 

primary  jurisdiction  of  equity  is,  60. 
INTANGIBLE  interests  may  be  reached,  17,  27. 

choses  in  action  recoverable,  17,  24,  t,^. 

stocks,  patent  rights,  legacies,  24,  37,  38. 
INTEGRITY,  paramount  to  generosity,  16. 
INTENT,  is  an  emotion,  8. 

See  Intention. 

essential  element,  196. 

inferred  from  circumstances,  8. 

fraudulent  pleading,  145. 

as  a  conclusion  of  law,  9,  10,  197,  322. 

cases  considered,  10. 

evil,  not  evidence  by  gifts  of  small  value,  41. 

not  conclusive,  197,  382. 

determined  by  act  done,  8  «,  196. 

seldom  disclosed  on  face  of  transaction,  196. 
INTENTION,  may  oppose  legal  conclusion,  8,  382. 

when  cannot  change  presumption,  9. 

seldom  disclosed  on  face  of  transaction,  196. 

reached  by  construction  of  instrument,  10,  322. 

as  affecting  subsequent  creditors,  98,  202. 

generally,  8,  9,  10,  41,  196-206,  279^. 

must  be  found  as  a  fact,  196. 

discrimination  in  decree,  196. 
(1.)  Defined  or  outlined,  196. 

is  an  emotion  or  operation  of  the  mind,  196. 

shown  by  acts  or  declarations,  196. 

fraud  as  affected  by,  8,  9,  10,  196. 


yg6  References^        INDEX.         [are  to  sections. 

INTENTION  —  defined  or  outlined  —  continued. 

debtor's  statements  not  conclusive,  196,  197. 

insolvent's  standard  of  morality  not  the  test,  196. 

hinder,  delay  or  defraud,  sufficient,   11,  196. 

when  question  of  res  adjudicata,  203. 

question  for  the  jury,  204. 

testifying  to,  205. 

as  to  another  person's  intent,  205. 

proving  it,  206. 

intent  of  debtor  the  test,  196,  196  n. 

gathered  from  circumstances,  206. 
(2.)  Actual  intent  not  decisive,  197. 

fraudulent  purpose  may  be  implied,  8,  9,  10,  197. 

debtor's  belief  immaterial,  8,  9,  10,  196,  197,  322,  382. 

professions  of  good  faith,  279^. 
(3.)   Fraud  of  agent  binding  on.  principal,   198. 

intent  established  by  implication  or  substitution,  198. 
(4.)   Mutualitx  of  participation  in  fraudulent  intent,  199,  207. 

the  general  rule,  199. 

vendor's  intent  insufficient,  199. 

fraudulent  intent  as  applied  to  infant,  199  n. 
(5.)  As  affecting  voluntary  alienations,  200,  319. 

the  cases  reviewed,  200  //. 

differs  from  cases  where  consideration  is  present,  200. 

not  essential  to  show  mutual  evil  intent,  200. 

relating  to  general  assignments,  319. 
(6.)    Where  consideration  is  adequate,  201. 

the  rule  considered,  201. 
(7.)    To  defraud  subsequent  creditors,  96,  97,  98,  100,  202. 

applications  of  the  rule,  96,  97,  98,  100,  202. 

creditor  must  show,  98. 

future  schemes  of  fraud,  202. 
INTENTIONAL  FRAUD,  under  bankrupt  act,  13  n. 
INTENTIONAL  OMISSION  of  assets,  avoids  assignment,  345. 
INTERESTED  parties,  in  esse,  must  be  joined,  107. 
INTERESTS  that  may  be  reached,  23-50. 

tangible  interests,  24. 

intangible  rights,  17,  24,  n,  37,  38. 

rule  in  England,  25. 

profits  and  inprovements,  26. 

crops,  27. 

choses  in  action,  33. 

powers,  39,  40. 


References^        INDEX.        [are  to  sections.  7Q7 

INTERESTS  —  continued. 

trust  income,  45,  360. 
INTERPRETATION  and  construction,  20,  20  n. 

maxims  of  common  law,  20  n. 

of  contracts,  268. 
INTERVENTION,  motion  for  in  New  York,  10S  n. 

creditor  must  not  be  guilty  of  laches,  109. 
INTRODUCTORY  observations,  1-22. 
IRREGULARITIES,  not  proof  of  fraud,  5. 
IRRESISTIBLE,  evidence  to  establish  fraud  need  not  be,  7. 
ISSUE  OF  FACT,  referred  to  jury  in  equity,  51. 

See  Jury. 
ITEMS,  of  evidence,  jury  to  weigh,  281. 

JOINDER  OF  CLAIMS,  54,  108. 

rule  in  Ohio,  54. 

uniting  causes  of  action,  55,  108. 

several  grantees  may  be  joined,  54. 

although  separate  defenses  exist,  54. 

ejectment  and  equitable  relief  in  one  bill,  54. 

conflict  in  the  cases,  54. 

exceptional  practice  in  Indiana  and  North  Carolina,  85. 

for  judgment  on  coupons  and  mandamus,  85  //. 
JOINDER  OF  COMPLAINANTS,  108,  108  n. 

creditors  by  distinct  judgments,  108. 

various  illustrations,  108. 

by  judgment  and  decree,  108. 

general  theory,  108. 

of  hostile  claimants,  108. 
JOINING  DEFENDANTS,  the  rule,  128,  132,  150,  151,  152. 

the  theory,  132. 

objections  to  non-joinder,  134. 

debtors,  128,  129. 

stockholders,  128. 
JUDGMENT-CREDITORS,  may  follow  corporate  assets,  119. 

may  attack  fraudulent  conveyance,  73-88. 

See  Status  of  Attacking  Creditors. 

may  attack  other  judgments,  74. 

when  execution  excused,  75. 
JUDGMENT  OR  DECREE,  rules  as  to,  168-183,  183^. 

status  of  attacking  creditors,  73-88. 

lien  and  order  of  payment,  170,  170  ;/,  171. 

collateral  attack  on,  270. 


7Q8  References']        INDEX.         [are  to  sections. 

JUDGMENT  OR  DECREE  —  continued. 

confession,  270  n. 

when  judgment  unnecessary,  83. 

receiver  before,  184. 

on  offer,  valid,  76. 

judgments  sufficient,  76. 

judgments  insufficient,  77. 

foreign  judgment,  78. 

when  judgment  unnecessary,  83,  83  ;/. 
(1.)   Judgment  conclusive,  168,  169,  270,  286^. 

attributes  of  the  judgment,  168. 

operates  as  an  estoppel,  168. 

conclusive,  though  form  of  action  be  changed,  169. 

judgment  transferring  title,  172. 

when  not  conclusive,  168. 
(2.)   Judgment  appointing  receiver,  170. 

the  pratice  explained,  170. 

appointing  referee  irregular,  170. 

effect  of,  170. 
(3.)   Judgment  avoids  sale  only  as  to  creditor,  171,  395-402. 

the  principle,  171,  395. 
effect  of  action  of  chancery,  171. 
(4. )   Impounding  proceeds  of  fraudulent  sale,  175. 

accounting  by  fraudulent  vendee  to  debtor,  176. 
(5.)   Relief  at  law  and  in  equity,  176  n. 
equity  more  flexible,  176  n. 
enforcing  judgment  at  law,  170^7. 
(6.)   Personal  judgment  against  fraudulent  vendee,  3  //,  177,  178. 
the  subject  discussed,  177. 
rule  in  various  States,  3  n,  177,  178,  178  n. 
allowances  to  vendee,  176. 
money  in  place  of  land,  178  //. 
money  judgment,  when  disallowed,  179. 
personal  judgment  against  wife,  180. 
( 7 . )  Must  conform  to  relief  sought,  181,  182. 
illustrations,  181,  182. 
fraud  must  be  found  as  stated,  168. 
form  in  Louisiana,  171. 
(8. )    Generally. 

no  judgment  in  favor  of  unrepresented  parties,  173. 
enforcing  judgment  at  law,  170a. 
confession  of  judgment,  174. 
contradictory  verdicts,  183. 


References^        INDEX.        \ are  to  sections .  799 

JUDGMENT  OR  DECREE—  generally  — continued. 

status  of  attacking  creditors,  73-88. 

attaches  to  proceeds  of  power,  40  //. 

as  to  trust,  when  binding  on  creditors,  45  n. 

when  fraudulent,  removed,  5  1  n. 

equity  will  restrain  when  demand  fictitious,  74  //. 

creditor  attacking,  burden  as  to,  74. 

in  supplementary  proceedings,  77. 

cestui  que  trust  need  not  have,  127a. 

statutory  new  trial,  1830. 

case  retained  till  disposed  of,  168. 
JUDGMENT,  FOR  DAMAGES,  improper  in  equity,  51. 

must  be  for  accounting  by  fraudulent  vendee,  51. 

fraudulent  confessions  of,  attacked  in  one  suit,  54. 

creditor  must  have,  before  filing  bill,  71-88. 

conclusive  as  to  indebtedness,  74,  270. 

proof  of,  270. 

attacking  for  collusion,  74  //. 

sufficient  to  sustain  a  bill,  76,  So. 

insufficient  for  that  purpose,  77. 

foreign,  effect  of,  78. 

foreign,  not  sufficient,  78. 

object  of,  73. 

establishes  debt,  73. 

exhausts  legal  remedy,  73. 

lien  by  statute,  87. 
JUDICIAL  SALE,  change  of  possession  on,  265. 

not  necessary  in  Pennsylvania,  265. 

considered  essential  in  New  York,  265. 
JURISDICTION  IN  EQUITY,  when  exclusive,  56. 

when  property  not  subject  to  execution,  36. 

limited  in  Massachusetts  to  property  not  subject  to  execu- 
tion or  attachment,  59  n. 

united  jurisdictions,  effect  of,  51. 
JURISDICTIONAL  QUESTIONS,  405-407- 

beyond  State  boundaries,  405. 

outside  county,  406. 

appeal  to  Supreme  Court,  407. 
JURY,  issues  of  fact  referred  to  in  equity,  51. 

framing  issues,  51,  51  //. 

to  weigh  items  of  testimony,  281. 

to  weigh  declarations,  276. 


800  References]        INDEX.         yare  to  sections. 

JURY  —  continued. 

consider  badges  of  fraud,  228. 

intent,  questions  for,  9,  204. 

fraud  on  subsequent  creditors,  question  for,  97,  97  //. 

court  cannot  interfere,  204. 

in  conclusive  cases  verdict  ordered,  204. 

rule  in  New  York  as  to,  204. 

effect  of  badges  of  fraud  submitted  to,  226. 

continued  possession  as  evidence  of  fraud,  question  for,  254. 

error  by,  how  corrected,  254. 

KANSAS,  change  of  possession,  250. 
KENTUCKY,  rule  as  to  absconding  debtors,  84. 

as  to  land  bought  with  pension  money,  46. 

rule  as  to  trust  income,  367^. 

as  to  change  of  possession,  251. 
KNOWLEDGE,  of  facts  sufficient  to  excite  inquiry,  379,  380,  381. 

See  Notice. 

of  facts,  as  notice  of  fraud,  379-381. 

buying  with  guilty  knowledge,  380. 

LABOR,  debtor  may  give  away,  50^. 

debtor  may  bestow  on  wife,  50^. 

preference  for  claim  for,  341^. 
LACHES,  excusing  apparent,  148. 

not  imputed  by  iron  rule,  287. 

circumstances  govern  each  case,  287. 

pleading  as  to,  148,  149. 

as  a  defense,  287. 

stale  demands  discouraged,  287. 

lapse  of  time,  288,  289. 

effect  of,  287-289. 

creditor  applying  to  intervene,  109. 
LAND,  change  of  possession  of,  264. 

as  distinguished  from  personalty,  264,  264  n. 

possession  evidence  of  ownership,  264. 

purchased  in  name  of  third  party,  57. 

in  name  of  third  party,  trust  as  to,  57  ;/. 
LAPSE  OF  TIME,  as  a  defense,  288,  289. 

rests  not  alone  on  laches,  288. 

peace  of  society,  288. 

loss  of  witnesses,  288,  289. 
LATITUDE  ALLOWED,  in  proving  circumstances,  281. 


References^        INDEX.         [are  to  sections.  $0  I 

LATITUDE  ALLOWED  —  continued. 

in  cross-examination,  281. 
LAW,  purchase  either  valid  or  void  at,  51. 

no  reimbursement  at  law,  193. 

remedy  at,  59. 

creditor  may  proceed  by  execution  at,  59. 

attempted  transfer  treated  as  nullity,  59. 

and  equity,  distintion  observed  between,  51. 
LAWRENCE  v.  FOX,  rule  in,  applied,  43. 
LEASE,  liability  on,  creditor,  90. 
LEGACIES,  recovered  by  creditors,  24. 
LEGAL  AND  EQUITABLE  JURISDICTION,  4,  51,  59,  60. 

changes  in  modern  procedure,  51. 

who  responsible  for  decision  in  equity,  51. 

judgment  for  damages  not  allowed  in  equity,  51. 

reimbursement  in  equity,  192. 

equity  more  flexible  than  law,  60. 
LEGAL  FRAUD,  meaning  of,  51. 
LEGAL  PRESUMPTIONS,  7. 

Judge  Black's  views,  7. 
LEGATEE,  cannot  avoid  testator's  transfer,  121  //. 
LEGISLATION,  tendency  of,  to  protect  honest  debtors  from  pun- 
ishment, 1  //. 

to  enlarge  remedies  against  property,  3. 

may  exempt  all  property,  46  n. 

as  to  creditors  of  decedent,  79. 
LEVY,  when  excused,  75,  83. 

cannot  be  made  against  receiver,  83. 
LEX  FORI,  governs  remedy,  64. 

cases  and  illustrations,  64. 

governs  right  to  arrest,  64,  191. 

matters  of  procedure,  regulated  by,  64. 
LEX    NEMINEM    COGIT    AD   VANA  SEU  INUTILIA  PERA- 
GENDA,  73. 

struggle  for  application  of  maxim,  73. 
LIBEL,  claimant  for  damages  from,  is  creditor,  90. 
LIEN,  in  supplementary  proceedings,  61. 

See  Status  of  Attacking  Creditors. 

creditors  must  have,  to  file  bill,  73,  75,  76,  88. 

created  by  creditor's  bill,  68,  75,  392. 

by  attachment,  not  sufficient  to  support  bill,  81,  81  n. 

creditors  having  rights  of,"  125. 

parties  having,  as  defendants,  138. 
51 


802  References]        INDEX.         [are  to  sections. 

LIEN  — continued. 

judgment  sufficient,  76,  80. 

judgment  insufficient,  77,  78,  81. 

when  unnecessary,  83. 

upon  rents  and  profits,  26. 

judgment  by  statute,  87. 

order  of  payment,  170,  171. 
LIFE  INSURANCE,  policies,  may  be  reached,  23,  24. 

when  non-assignable,  23. 

by  married  man,  23. 

murder  to  secure,  20  ;/. 
LIGHTLY  IMPUTED,  fraud  is  not,  5. 
LIMITATIONS  upon  ownership  not  favored,  360-368. 

inconsistent,  are  void,  362. 

statute  of,  292. 

in  equity,  293. 

effects  of  discovery  of  fraud,  290,  291. 

must  be  pleaded  or  raised,  202. 

acknowledgment  of  debt,  215. 

judgment  barred  by,  77. 

rule  in  New  York,  73. 
LIMITED  partnership,  cannot  assign  with  preference,  319^. 
LIS  PENDENS,  rule  as  to,  157. 

to  create,  must  describe  property,  157. 

doctrine  as  to,  very  ancient,  157. 

not  applicable  to  bonds,  157. 

or  to  negotiable  securities,  157. 

or  personal  property,  157. 
LITIGATION  engendered  by  fraudulent  transfers,  2. 

not  creditable,  407. 
LOCAL,  penal  statutes  are,  139. 

territorial  jurisdiction,  1570. 
LOCAL  RULE,  governs  federal  courts,  20. 
LOGS,  delivery  of,  262. 

symbolical  delivery  sufficient,  262. 

illustrations,  262. 
LONG  CREDIT,  sale  on,  240. 
LOUISIANA,  doctrine  as  to  collateral  attacks,  69. 

its  features  discussed,  69. 

derived  from  civil  law,  69. 

not  generally  acknowledged,  69. 

objections  to  rule,  69. 

form  of  judgment,  171. 


References]        INDEX.        [are  to  sections.  80" 

LOUISIANA  —  continued. 

as  to  change  of  possession,  250. 
LOVE  AND  AFFECTION  as  consideration,  210. 

good  between  brother  and  sister,  216. 

not  good  against  existing  creditors,  210. 

explaining  recitals  in  deed  as  to,  221. 

MAINE,  suit  by  general  creditor,  73;;. 

spendthrift  trusts,  367*7. 
MAINE'S  ANCIENT  LAW,  punishment  of  debtors,  1  n. 
MALICIOUS  PROSECUTION,  claims  for,  cannot  be  reached,  34. 

do  not  pass  by  assignment,  34. 
MANIFEST,  fraud  must  be  made,  5. 
MARRIAGE,  as  consideration,  212. 

the  rule  in  the  cases,  212. 

public  policy  as  to,  212. 

relationship,  298. 

settlement,  rule  as  to,  306. 

post-nuptial  settlement,  307. 

fraudulent  conveyances  in  contemplation  of,  314. 

settlement,  description  in,  157  n. 

statute  of  frauds,  311. 
MARRIED  MAN,  may  devote  earnings  to  life  insurance,  23. 

See  Agent. 
MARRIED  WOMEN,  rights  of,  298. 

claiming  life  insurance,  23. 

assignments  of  policies  by,  23. 

See  Husband  and  Wife. 
MARSHALL,  Chief-Justice,  views  of,  as  to  moral  turpitude,  8. 
MARSHALLING  assets,    216. 
MARYLAND,  change  of  possession,  251. 

spendthrift  trusts  in,  367*7. 
MASS,  of  property,  charge  upon  in  equity,  44,  44  ;/. 
MASSACHUSETTS,  rule  as  to  spendthrift  trusts,  367,  367*7. 

rule  as  to  crops  on   lands  fraudulently  conveyed,  27. 

jurisdiction  of  equity  in,  49  //. 

choses  in  action  reached,  64. 

remedies  allowed,  65. 

when  receiver  not  appointed,  188  //. 

no  reconveyance,  397. 

knowledge  of  intent,  196. 

promises  of  third  parties,  43. 
MATERIAL  FACTS,  must  be  alleged  in  complaint,  141. 


SOA  References}        INDEX.        yare  to  sections. 

MAXIMS,  of  common  law,  control  laws  and  contracts,  20  //. 
MEMBER,  suing  in  place  of  receiver,  73. 
MEMBERSHIP  of  stock  exchange  is  assets,  35. 

not  liable  to  execution,  35  ;;. 
MENTAL  OPERATION  and  legal  conclusion  opposed,  8. 

illustrated  in  Coleman  v.  Burr,  382. 

intent  is,  196. 
MESNE  PROFITS  recoverable,  26. 

during  period  of  redemption,  26. 

when  property  is  held  under  trust,  26. 
METHODS  of  obtaining  redress,  72. 

annulling  fraudulent  deed,  72. 

appointing  referee  or  receiver,  72. 

selling  on  execution,  72. 
MICHIGAN,  change  of  possession,  250. 
MINGLED  property,  28. 

rule  as  to,  28. 

of  husband  and  wife,  305. 

wife  may  lose  it,  305. 

conflicting  views,  305. 

rule  in  bankruptcy,  305  //. 
MINNESOTA,  proof  of  existing  debt,  89  n. 

suit  by  receiver  in  insolvency,  115. 

dishonest  design  must  be  shown,  197. 

change  of  possession,  250. 
MISJOINDER  of  causes  of  action,  135. 

hostile  claimants  cannot  join,  108. 
MISSISSIPPI,  general  creditor  may  sue,  73  n. 

debt  must  be  due,  107  n. 

exemptions  in,  365. 

trust  income  cases,  3670. 
MISSOURI,  issuance  of  attachment  in,  12. 

creditor's  bill  against  absconding  debtor,  84. 

trust  income  cases,  367^. 

conveyance  by  embarrassed  debtor,  99. 

change  of  possession,  251. 
MISTAKE,  in  fraudulent  conveyance,  not  corrected,  396. 

in  assignment,  not  fatal,  321. 
MIXED  CLAIMS,  prior  and  subsequent  to  alienation,  105. 
MODERN  CHANGES  in  the  law,  1. 
MONEY  EARNED,  but  not  due,  available,  33. 
MONEY  JUDGMENT,  when  disallowed,  179. 

alllowed  against  vendee,  177,  178. 


References]        INDEX.         [are  to  sections.  805 

MONEY  JUDGMENT  —  continued. 

in  equity,  51. 
MONEY,  may  be  reached,  24. 

consideration  need  not  be  in,  207. 
MONOPOLY,  which  patent  confers,  is  property,  38. 
MORAL  SENSE,  weak  in  some  men,  8,  382. 

of  debtor,  not  binding  on  creditor,  8. 
MORAL  TURPITUDE,  proof  of,  8,  382. 

not  exacted,  8. 

under  bankrupt  act,  13  n. 

obligations  as  to  consideration,  215. 

duty  to  pay  debt  barred  by  statute,  215. 

obligation,  statute  of  frauds,  215. 
MORTGAGEE  as  bona  fide  purchaser,  371. 

rule  in  New  York,  371.  . 
MORTGAGES,  347-359- 

See  Chattel  Mortgages. 

when  fraudulent,  347-359. 

promise  not  to  disclose  existence  of,  281. 

for  just  debt,  may  be  overthrown,  207. 

absolute  conveyance  as  security,  238,  404. 

pre-existing  indebtedness  as  consideration,  371. 

declaring  deeds  to  be,  404. 

future  advances  should  be  shown  on  mortgage,  217. 

redeeming  from,  404a. 

assignee  may  set  aside,  115. 
MOTHER,  and  son,  transactions  between,  242. 
MOTION,  uncertainty  in  pleading  reached  by,  14°  «• 
MOTIVES,  often  unimportant,  8,  382. 

not  controlling,  187. 

of  transactions,  7. 

latitude  on  question  of,  224  n. 

testifying  to,  205,  205  //. 
MULTIFARIOUS  complaints,  150,  151,  152. 

complaints  bad  for,  150. 

pleadings  held  not  to  be,  151,  152. 

rules  applicable  to,  150-152. 
MUNICIPAL  CORPORATION  as  creditor,  90. 

from  date  of  tax  warrant,  90. 
MURDER,  not  presumed,  5  n. 

to  secure  proceeds  of  insurance,  no  recovery,  20  n. 
MUTUALITY  of  participation  in  fraudulent  intent,  199,  302,  319. 

vendor's  intent  alone  sufficient,  199. 


806  References]        INDEX.         [are  to  sections. 

MUTUALITY  —  continued. 

participation  by  infant,  199  n. 

as  to  voluntary  alienations,  200,  200  n. 

Laughton  v.  Harden,  200  ;/. 

NATIONAL  BANK,  receiver  of,  117. 

not  dissolved  by  receivership,  134. 
NATURAL,  presumptions,  7. 

Judge  Black's  views,  7. 

consequence  of  an  act,  presumption  as  to,  9,  10,  382. 

person,  corporation  like,  117  n. 
NEBRASKA,  change  of  possession,  250. 

NEGOTIABLE  INSTRUMENTS,  lis  pendens  doctrine  not  applica- 
ble,  157. 
NEVADA,  change  of  possession,  250. 
NEW  ENGLAND  cases  as  to  change  of  possession,  249. 

transfers  presumptively  fraudulent,  249. 
NEW  APPOINTMENT  of  assignee  made  by  court,  316. 
NEW  JERSEY,  bill  by  creditor  having  lien,  81  n. 

spendthrift  trusts,  367c. 

bill  by  receiver,  116. 

receiver  of  jewelry,  188. 
NEW  TRIAL,  not  a  matter  of  right,  183a. 
NEW  VENTURES,  placing  property  beyond,  100. 
NEW  YORK,  value  as  affecting  right  to  bring  bill,  23  n. 

and  Massachusetts,  choses  in  action  may  be  reached,  64. 

creditor's  bill  and  supplementary  proceedings  at  the  same 
time,  65. 

no  receiver  in  ejectment,  187. 

rule  as  to  change  of  possession,  250. 

declarations  as  to  personalty,  277. 

sales  by  mortgagor  for  mortgagee  valid,  355. 

pension  money  in  land,  exempt,  46. 

judgment  by  creditors  of  decedent,  79. 

statutory  policy,  79. 

supplementary  proceedings  are  special  proceedings,     61. 

assignee  must  attack  fraudulent  conveyance,  115. 

title  of  receiver  to  real  property,  116. 

specific  assignment  not  a  general  assignment,  339. 

rule  as  to  limitations,  73. 

personal  representative  must  sue,  77,  77  n. 

suit  in  aid  of  attachment,  81,  81  n. 

rule  as  to  voluntary  conveyances,  93,  208. 


References]        INDEX.        \jire  to  sections.  §07 

NEW  YORK  —  continued. 

fraud  on  subsequent  creditors,  ioo  u. 

intervention  motion,  108  u. 

executors  may  sue,  112. 

rule  as  to  discovery  of  fraud,  149. 

rule  as  to  lis  pendens,  157. 

spendthrift  trusts,  367a,  367^. 
NICHOLS  v.  EATON,  the  point  actually  decided,  364. 

the  case  stated,  364. 

the  dictum,  365. 

criticised,   365. 

the  true  rule,  366. 

re-stated,  361  //. 
NON-ATTENDANCE,  of  defendant,  241,  241  n. 
NON-FILING  of  deed,  234  n,  235. 
NON-RESIDENT  DEBTOR,  jurisdiction  over,  84. 
NO  REIMBURSEMENT  at  law,  193. 
NO  DEFINITION  of  fraud,  13. 
NORTH  CAROLINA,  exceptional  practice  as  to  joinder  of  claims, 85. 

the  practice  deprecated,  85. 

spendthrift  trusts,  367a. 

inadequacy  of  consideration,  232. 
NOTICE,  actual  and  constructive,  372-389. 
( 1 . )    Wit  ho  u  t  notice,  372. 

Judge  Story's  rule,  372. 

possession  as  notice,  384a. 

creditors  after  notice,  106. 
(  2 . )  Kinds  of  notice,  373. 

two  kinds,  actual  and  constructive,  373. 

both  defined,  373. 
(3.)    Constructive  notice  of  fraud,  374-376,  378-382. 

various  definitions,  374. 

rule  in  Stearns  v.  Gage,  375. 

the  doctrine  discussed,  375,  376. 

rule  in  Anderson  v.  Blood,  376a. 

illustrations,  376. 

actual  belief,  377,  382. 

rule  in  Parker  v.  Conner,  378. 

comments,  382. 
(4.)  Facts  sufficient  to  excite  inquiry,  379-381. 

many  illustrations,  379-381. 

means  of  knowledge  equivalent  to  knowledge,  381. 

notice  to  preferred  creditors,  341^. 


References^        INDEX.         \  are  to  sections. 

NOTICE  — facts  sufficient  to  excite  inquiry  —  continued. 

purchaser  pendente  lite,  389a. 
NOTORIETY  of  change  of  possession,  253. 

symbolical  delivery  insufficient,  253. 
NULLA  BONA,  execution  returned,  86/87,  87  //. 
NULLITIES,  attempted  transfers  treated  as,  59,  69. 

OATH  against  oath,  effect  of,  159. 
OBJECTIONS,  as  to  non-joinder,  how  raised,  134. 

to  jurisdiction  in  equity,  88,  88  n. 
OBSTACLES  to  development  of  the  law,  5. 
OFFER,  judgment  entered  on  valid,  76,  270. 

judgment  on,  270. 

of  reimbursement,  192. 
OHIO,  rule  as  to  change  of  possession,  250. 

as  to  spendthrift  trusts,  367a. 
OMISSION  from  schedules,  when  fraudulent,  320. 
OMNIA  PRAESUMUNTUR  CONTRA  SPOLIATOREM,  281. 
OMNIBUS  BILL,  creditors'  bill  so  called,  68. 
ONUS,  as  to  fraud,  5,  6,  224. 

affecting  marriage  relationship,  300. 
OPEN  AND  CONCLUDE,  right  to,  271,  271  n. 
OPINION,  evidence  as  to  insolvency,  273,  273  n. 

as  to  value,  284. 

of  the  parties,  accorded  little  weight,  8. 
ORDER  OF  ARREST,  when  vacated,  191. 
OTHER  CONVEYANCES,  evidence  of,  382. 
OTHER  FRAUDS,  as  evidence,  282. 
"  OTHERS,"  meaning  of,  no. 

who  included  in,  no. 

suing  on  behalf  of,  no. 

design  of  the  statute  as  to,  no. 
OVERCOMING  presumption  from  failure  to  change  possession,  255. 
OVERSEER  OF  POOR,  as  claimant,  124. 

PAINSTAKING  formalities,  badge  of  fraud,  241. 
PARENT  AND  CHILD,  daughter's  services  to  father,  218 

no  implied  promise  to  pay,  218. 
PAROL  EVIDENCE,  to  vary  consideration,  221. 
PARTICEPS  CRIMINIS,  no  relief  to,  192,  214. 
PARTICULARITY  of  denial  in  answer,  162. 

general  answer  operates  against  defendants,  162. 
PARTICULARS,  bill  of,  ordering,  162a. 


References^        INDEX.         [are  to  sections.  SOO 

PARTIES  COMPLAINANT,  68,  73j  107-127. 
See  Complainants. 

joinder  of  complainants,  108. 

when  heirs  cannot  sue,  121. 

when  widow  not  entitled  to  proceed,  121. 
PARTIES  DEFENDANT,  128,  129. 

See  Defendant. 

joinder  of  defendants,  132,  133. 

in  forfeiture  action,  132^, 

question  of,  perplexing,  107. 

competency  of,  as  witnesses,  269. 

cross-examination  of,  281. 

interested  parties  in  esse  must  be  joined,  107. 
PARTY,  as  witness,  269. 

competency  of,  269. 
PARTITION  SUIT,  mortgage  assailed  as  fraudulent,  63. 

the  theory,  63. 
PARTNERS,  may  sue  copartners  and  fraudulent  alienees,  54. 

object  of  suit  in  such  case,  54. 

arrest  of,  191. 

preferring  claims,  329. 

no  exemptions,  48. 

special,  cannot  be  preferred,  329. 

survivor  may  make  assignment,  329. 

limited,  assets  are  trust  fund,  329. 

corporators,  when  liable  as,  139. 

copartnership  and  individual  debts,  216. 

frauds  on  partnership  creditors,  216. 

partnership  assignments,  319^. 

power  of  to  make  assignments,  319^. 
PAST  TRANSACTIONS,  declarations  as  to,  276. 
PATENT  RIGHTS,  monopoly  secured  by,  is  property,  38. 

may  be  assigned  by  operation  of  law,  ^8. 

can  be  reached  by  creditors,  24,  38. 

inchoate  right  to,  non-assignable,  38. 

receiver  of,  38. 
PAYMENTS,  made  to  debtor,  50^. 
PENALTY  for  non-payment  of  debts,  1. 

inflicted  upon  stockholders,  139. 
PENDENTE  LITE,  purchaser,  389a,  392. 
PENDING  the  writ  or  suit,  conveyance  made,  22,  132a. 

badge  of  fraud,  233. 

purchaser  bound,  1320. 


8  10  References^        INDEX.         [are  to  sections. 

PENNSYLVANIA,  rights  of  administrators,  112. 

change  of  possession,  251. 

spendthrift  trusts,  367^,  368. 

powers  not  assets,  368a. 
PENSION  MONEY,  in  lands,  46. 

PER  SE  FRAUDULENT,  inadequacy  of  price  is  not,  232. 
PERSONAL,  judgment  against  fraudulent  vendee,  177,  178,  178  n. 

money  judgment,  when  disallowed,  179. 

against  wife,  180. 

to  sustain  bill,  77. 

transaction  with  deceased,  testifying  to,  122. 
PERSONAL  liability,  assignee  protected  against,  319a. 
PERSONAL  PROPERTY,  mortgages  upon,  347-359. 

delivery  of  possession  of,  245-267. 

distinction  between,  and  realty,  264. 

as  to  return  of  execution,  87. 

lis  pendens  inapplicable  to,  157. 
PERSONAL  REPRESENTATIVES,  as  complainants,  112,  113. 

rule  in  New  York,  112,  113. 

as  defendants,  136. 

conveyances  binding  upon,  112,  113,  398. 

may  sue  for  cancelled  debt,  42. 

claims  of,  pass  by  assignment,  316^. 
PERSONAL  TRANSACTIONS  with  deceased  person,  121. 

evidence  of,  121,  205  n. 
PERSONALTY,  restraint  upon,  not  allowed,  363  n. 

in  name  of  third  party,  liable  to  seizure,  57. 

admissions  concerning  title  to,  excluded,  277. 
PLAINTIFFS,  in  creditors'  suits,  68,  73,  107-127. 

See  Complainants. 
PERSUASIVE,  proof  of  fraud  must  be,  5. 
PLEA,  or  answer,  158-167. 

See  Answer. 

of  bona  fide  purchaser,  163. 

PLEADING,  141-167. 

See  Complaint. 
testimony  must  conform  to,  285. 
amendment  of,  156. 
bill  of  particulars,  162a. 
charging  fraud,  141. 
general  allegations  insufficient,  141. 


References]        INDEX.         [are  to  sections.  3jj 

PLEADINGS  IN  EQUITY,  not  so  strict  as  at  law,  60,  146. 

held  not  multifarious,  151,  152. 
PLEDGE,  void  mortgage  not  basis  of,  357. 
PLEONASMS,  in  English  statutes,  11  ;/. 
POLICIES  of  insurance  for  wife's  benefit,  23,  312. 

when  not  assignable,  23. 
POSITIVE  TESTIMONY,  not  requisite,  5. 
POSSESSION,  change  of,  245-267. 

See  Change  of  Possession. 

must  be  open  and  visible,  246,  253. 

definition  of,  245. 

evidence  of  title,  245. 

concerning  possession,  245. 

possession  as  proof  of  fraud,  247. 

rebutting  inference,  250. 

transfers  prima  facie  fraudulent,  248. 

as  evidence  of  fraud  per  se,  251. 

rule  in  different  states,  250,  251. 

rule  in  federal  tribunals,  250. 

between  husband  and  wife,  253. 

replenishing  stock,  253. 

separating  stock,  253. 

overcoming  presumption,  255. 

result  of  the  cases,  252. 

change  of,  must  be  continuous,  257. 

temporary  resumption  of,  258. 

concurrent,  259. 

excusing  want  of  change  of  possession,  261,  263. 

change  of  possession  of  realty,  265. 

possession  with  power  of  sale,  267. 

after  conveyance,  279. 

declarations  characterizing,  277-279. 

by  wife,  presumption  of  ownership,  30 r. 
POSSIBILITY  of  judgment  will  not  sustain  bill,  73. 
POST-NUPTIAL  marriage  settlement,  307,  308. 
See  Husband  and  Wife. 

upheld,  if  reasonable,  307. 

presumed  to  be  voluntary,  307. 
POWER  OF  ATTORNEY,  from  wife  to  husband,  198. 
POWER  OF  SALE,  by  mortgagor  in  mortgages,  347-359- 

policy  of  the  law  considered,  347-359- 
POWER,  to  reform  assignment,  322^. 
POWERS,  when  assets  for  creditors,  39,  39  >i,  40. 


8 12  References]        INDEX.        fare  to  sections. 

POWERS  —  continued. 

English  rule  as  to,  39,  39  //. 

rule  in  Supreme  Court,  39  //. 

views  of  Hardwicke  and  Somers,  39. 

rule  the  same  both  as  to  realty  and  personalty,  39. 

cannot  be  transferred,  39  ti.  ' 

statutory  changes  as  to,  40. 

judgment  attaches  to  proceeds  of,  40  n. 

Pennsylvania  rule,  368a. 

New  York  policy  as  to,  deplored,  40,  368^. 

of  alienation,  restraints  upon,  360-368. 
PRACTICE,  71. 

See  Complaint;  Answer;  Complainants;    Defendants. 

in  federal  courts,  71. 

equity  practice  prevails,  71. 

following  State  rules,  71. 
PRAYER  OF  COMPLAINT,  155. 

mistake  as  to,  not  fatal,  155,  181. 

inapt  and  incongruous  prayers,  155. 
PREFERENCE,  IS  LEGAL,  390,  391. 

must  represent  actual  debt,  391. 

excessive,  341a. 

to  laborers,  341^. 

notice  to  preferred  creditors,  341^. 

on  eve  of  general  assignment,  39 1#. 

illegal  composition,  3930. 

attaching  creditor,  "3940. 

of  vigilant  creditors,  392. 

why  rewarded,  392. 

of  claim  in  which  assignor  is  partner,  329. 

of  special  partner,  disallowed,  329. 

assignments  to  prevent,  341. 

purpose  of  bankrupt  act  to  defeat,  390  n. 

theory  of,  390. 

secret,  when  avoided,  393,  394. 

for  wages,  392a. 

by  supplementary  proceedings,  61. 

when  upheld,  11. 

by  agreement  with  corporation,  185. 
PRE-EXISTING  debt,  as  consideration,  209. 
PREMIUMS,  suit  to  recover,  proofs,  23  n. 

PRESUMPTION,    that    natural   consequence   of  an  act  was    con- 
templated,  9,  10,  382. 


References^        INDEX.         [are  to  sections .  Si; 

PRESUMPTION  —  continued. 

does  not  obtain  that  common  law  prevails  in  Russia,  (.4  «. 

against  fraud,  5-7. 

ride  as  to,  7. 

of  good  faith,  5,  6. 

of  innocence,  5. 

of  fraud  in  equity,  60. 

that  assignee  represents  creditors,  1  \$. 
PRESUMPTIONS,  legal  and  natural,  7. 

PRESUMPTIVELY  FRAUDULENT,  conveyances,  94,  248. 
PRETENDED  CREDITOR  has  no  status,  91. 
PREVALENCE  of  fraudulent  transfers,  2. 

the  cause,  2. 
PRIMA  FACIE,  cases  of  fraud,  243. 

numerous  illustrations,  243. 

evidence  of  fraud,  247,  248. 

true,  answer,  159. 

failure  to  change  possession,  248,  250,  252. 
PRIMARY  JURISDICTION,  in  equity,  60. 
PRINCIPAL,  knowledge  sufficient  to  charge,  198. 
PROCEDURE  in  federal  courts,  71. 

at  law  and  in  equity,  51,  59,  60. 
PROCESS,  service  of,  creates  lien,  61,  68,  392. 
PROCRUSTEAN  FORMULA,  statutes  not  limited  by,  22. 
PRODUCTS,  of  land,  may  be  reached,  24. 
PROFESSIONS,  of  good  faith,  279^. 
PROFITS,  devise  of,  is  devise  of  lands,  262. 

debtor  cannot  give  away,  26. 
PROMISES,  of  third  parties  available,  43. 

doctrine  of  Lawrence  v.  Fox,  43. 

the  rule  not  universal,  43. 

not  recognized  in  Massachusetts,  43. 

nor  in  England,  43. 

theory  of  the  rule,  43. 

avoids  circuity  of  action,  43. 
PROMISSORY  NOTES,  may  be  reached,  24. 
PROOF  of  moral  turpitude,  8,  382. 

not  essential  to  avoid  transfer,  8. 

intent  to  defraud  subsequent  creditors,  98. 

judgment  or  lien,  270. 

of  consideration,  209,  222. 

mutuality  of  intent,  199. 

See  Intention  —  Evidence. 


5 1  A  References'}        INDEX.        [are  to  sections . 

PROPER  AND  NECESSARY  PARTIES,  68  n. 

See  Parties. 
PROPERTY,  susceptible  of  fraudulent  alienation,  23-50. 

the  rule,  24,  25. 

in  name  of  third  party,  57,  82. 

of  debtor,  theory  as  to,  n. 

subject  to  immediate  process,  n. 

value  of,  affecting  question  of  fraud,  23,  41. 

proving  value  of,  284. 

substituted  or  mingled,  28. 

of  equitable  character,  68  //. 

stock  exchange  seat  is,  35,  35  //. 

trade  mark,  36. 

book  royalty,  37. 

patent  right,  ^&. 

powers,  39,  40. 

insurance,  23. 

exempt  property,  46,  49. 

property  not  reached,  50^. 
PROTECTION  OF  CREDITORS  is  the  policy  of  the  law,  1. 
PROVING  intent,  206. 

circumstances,  281. 

consideration,  219. 

recitals  as  evidence,  220. 

explaining  recitals,  221. 

value,  284. 
PROVISIONAL  RELIEF,  injunction,  receiver,  arrest,  184-191, 
(1.)   Importance  of  prompt  relief ,  184. 

forms  of  relief,  184. 
(2.)   Injunction  as  form  of,  185,  186. 

when  allowed,  184,  185. 

misconduct  and  insolvency,  184. 

when  disallowed,  186. 

when  issued  against  sale,  185. 

against  incumbrancing  shares,  185. 
(3.)   Receiver  in  contest  over  real  property,  187. 

disinclination  of  the  courts  to  appoint,  187. 

why  provisional  relief  is  discouraged,  187. 

no  receiver  in  ejectment  in  New  York,  187. 
(4.)  Receiver  to  collect  alimony,  188. 

practice  in  Wisconsin,  188. 

may  attack  fraudulent  transfers,  188. 
(5.)   Of  various  interests,  188. 


References]        INDEX.         [are  to  sections.  gjC 

PROVISIONAL   RELIEF  —  of  various  interests  —  continual. 

allowed  only  in  clear  cases,  188. 

to  sell  land,  188. 

of  stock  exchange,  188. 

removal  of,  190. 

title  in  death,  189. 
(6.)  Arrest  of  defendant,  191. 

actual  intent  to  defraud  necessary,  191. 
PUBLIC,  fraud  upon,  not  avoid  conveyance,  107. 
PUNISHMENT,  power  to  inflict,  abrogated,  2,  3,  3  n,  178. 
PURCHASE  PRICE,  inadequacy  of,  232. 

offer  to  restore,  192. 
PURCHASER,  removing  incumbrances,  126. 

recovering  in  ejectment,  57. 

bona  fide,  369. 

notice  to,  369-389*2. 

with  notice  from  bona  fide  purchaser,  384. 

mortgagee  as,  371. 

of  chattel  mortgage,  168. 

subrogation  to  creditor's  lien,  195. 

at  execution  sale  may  attack  deed,  37 ia. 

pending  suit,  389^7,  392. 

See  Notice;  Bona  Fide  Purchaser. 
PURPOSE  of  the  inquiry,  3. 

QUASI,  public  officer,  assignee  is,  316. 
QUESTION   FOR  COURT,  fraud  in  law,  9,  10,  382. 

of  equity,  51. 
QUESTION  FOR  JURY,  intent,  9,  204. 

effect  of  badges  of  fraud,  226. 

to  weigh  declarations,  276. 

as  to  change  of  possession,  254. 
QUI  H^ERET  IN   L1TERA  H^RET  IN  CORTICE,  20  n. 
QUIA  TIMET,  bills,  when  maintainable,  59. 

RATIFICATION,  of  assignment,  3.6  n. 
of  judgment  and  execution,  174. 
REACHED,  property  that  cannot  be,  50,  50^7. 
REAL  PROPERTY,  receiver  of,  187. 

change  of  possession  of,  264. 

possession  evidence  of  title,  264. 

the  cases  considered,  264. 

land  in  foreign  state,  15 ,a. 


3 1 6  References]        INDEX.         [are  to  sections. 

REAL  PROPERTY  —  continued. 

change  of  venue,  157*7. 

receivers,  title  to,  116  //. 

situs  of,  governs,  24. 
REALTY  AND  PERSONALTY,  declarations,  277. 

as  to  issuance  of  execution,  87. 
REASONABLE  TIME,  possession  within,  256. 
RECAPITULATION  of  creditors'  remedies,  72. 
RECEIVER,  has  no  title  to  tort  claims,  34. 

when  cannot  represent  creditor,  117. 

no  claim  to  exemptions,  46. 

in  supplementary  proceedings,  61,  116. 

as  complainant,  116,  188. 

bill  by,  116. 

power  to  appoint  over  national  bank,  117. 

recognition  of,  by  comity,  118. 

appointed  before  answer,  184. 

when  denied,  184. 

directing  transfer  to,  187. 

of  various  interests,  188. 

only  allowed  in  clear  cases,  188. 

of  annuity,  188. 

to  sell  and  convey  land,  188. 

of  a  living,  188. 

of  a  patent,  38. 

of  a  stock  exchange  seat,  188. 

in  action  to  foreclose  contract,  187  /;. 

represents  creditors,  116. 

may  disaffirm  dealings  of  debtor,  116. 

appointed  for  benefit  of  all  parties,  188. 

of  corporation,  rights  of,  117. 

when  insolvency  not  ground  for,  239  //. 

judgment  appointing,  170. 

in  contests  over  real  property,  1S7. 

title  of,  117,  117  //. 

title  to  realty,  116  //. 

to  collect  alimony,  188. 

of  jewelry,  188. 

title  on  death  of,  189. 

removal  of  receiver,  190. 

entitled  to  notice,  190. 

employment  of  debtor  not  ground  of  removal,  190. 


References],        INDEX.        \are  to  sections.  8l7 

RECEIVER  —  continued. 

foreign,  has  no  status,  118. 

summary  process  not  extended  to,  116. 

as  defendant,  133. 

reaching  fund  in  hands  of,  44. 

when  stockholder  may  sue,  73. 

federal  court  not  disturb  State  receiver,  117. 

suing  in  place  of,  73. 
RECITALS,  of  consideration  as  evidence,  220. 

of  fictitious  consideration,  228. 

where  fraud  is  present,  219. 

of  deed,  avoiding  transfer,  10,  322. 

of  complaint,  140-157. 

of  answer,  158-167. 

in  deed,  284a. 

explaining,  221. 

not  binding  on  creditors,  221. 
RECONVEYANCE  cannot  be  enforced,  396. 

theory  of  the  law,  396. 

when  allowed,  399. 
RECORD,  of  chattel  mortgage,  effect  of,  347. 

withholding   instrument   from,    effect  of,    101,    234  //,    235, 

235  «>  236- 

failure  to  record  in  fraud  of  bankrupt  act,  237. 
RECOVERING,  improvements  and  rents,  26. 

assets,  23-50. 
RECOVERY,  must  conform  to  relief  sought,  181. 

must  accord  with  complaint,  182. 
REDEEMING  mortgaged  property,  4040. 
REDEMPTION,  recovering  of  mesne  profits  during  period  of,  26. 

equity  of,  may  be  seized,  31. 
REFEREE,  judgment  appointing  irregular,  170. 

assignee  directed  to  account  before,  316*:. 
REFERENCE,  when  not  ordered,  62a. 

views  of  Gilbert,  J.,  as  to,  620. 
REIMBURSEMENT,  and  subrogation,  192-195. 

actual  and  constructive  fraud,  192. 

actual  fraud  defeats,  192. 

constructive  fraud  does  not  defeat,  192,  194. 

inequitable  transactions  set  aside  upon  terms,  192. 

when  bill  contains  no  offer  of,  192. 

when  husband  and  wife  are  interested,  192. 

outlay  by  creditor,  192. 
I  52 


8 1 8  References]        INDEX.        [are  to  sections . 

REIMBURSEMENT  —  continued. 

policy  of  the  law,  192. 
(1.)  JVo  reimbursement  at  law,  193. 

transaction  at  law  wholly  valid  or  wholly  void,  193. 

constructive  fraud,  194. 

not  so  in  equity,  192,  193. 
(2.)   Subrogation  of  purchaser  to  creditors   lien,  195. 

when  permitted,  195. 
RELATIONSHIP,  effect  of,  93,  242. 

calculated  to  awaken  suspicion,  242. 

transaction  will  be  closely  scrutinized,  242. 

influence  of  Salmon  v.  Bennett,  242. 

not  necessarily  evidence  of  fraud,  242. 

when  coupled  with  other  badges,  242. 

as  regards  preferences,  390. 
RELEASES  exacted  in  assignments,  328. 

regraded  with  disfavor,  328. 

in  what  form  permitted,  328. 
RELIEF  before  and  after  sale,  58. 

at  law  and  in  equity,  59,  60,  176  n. 
RELINQUISHMENT  of  dower,  consideration  for  settlement,  299. 
REMAINDER,  estates  in,  recoverable,  29. 

man,  is  creditor,  90. 
REMEDIES  OF  CREDITORS,  51-72. 

See  Creditors'  Remedies. 

two-fold  object,  360. 

governed  by  lex  fori,  64. 

forms  of  relief,  4,  51. 

reference  not  ordered,  62a. 
REMEDY  at  law,  59. 

by  suit  in  equity,  60. 
REMOVAL,  or  dismissal  of  receiver,  190. 

similar  to  jurisdiction  dissolving  injunction,  190. 

employment  of  debtor  no  ground  of,  190. 

to  federal  courts,  71 
RENEWAL  CREDITOR,  is  existing  creditor,  89. 
RENTS,  and  profits  recoverable,  26. 

debtors  cannot  give  away,  26. 
REPAYMENT,  of  purchase  price,  192. 
REPELLING,  inference  of  fraud,  250. 
REPLEVIN,  assignee  may  bring,  3160. 
REPRESENTATIVES,  as  complainants,  112,  113. 

bringing  in  as  defendants,  132^. 


References^        INDEX        [are  to  sections. 

REPRESENTATIVES  -  continued. 

suits  against,  136. 
REPUGNANT  CONDITIONS,  void,  362,  363. 

denned,  363  n. 

theory  of  the  law,  362. 
REQUISITES  of  a  fraudulent  conveyance,  23. 

characteristics  and  classes,  15. 
RES  ADJUDICATA,  question  of  intent,  when,  203. 

judgment,  when,  168. 

conclusive  in  other  forms  of  procedure,  169. 
RESCUERS,  judgment  creditor's  right  against,  62. 
RESERVATIONS,  by  debtor,  creditors  may  reach,  32. 

secret,  effect  of,  272. 

avoid  assignments,  326. 

of  exempt  property,  not  fraudulent,  326. 

of  surplus,  by  assignor,  327. 
RES  GESTx'E,  concerning,  276,  279. 

importance  of  the  rule,  276. 

illustrations,  276. 

must  be  concomitant  with  principal  act,  279. 

duty  of  the  jury  as  to,  276. 
RESTITUTION,  reimbursement  and  subrogation,  192,  193,  195. 
RESTRAINTS  upon  alienation,  14,  361. 

by  debtor  in  fraud  of  creditors,  14. 

theory  of  the  law,  361. 

English  and  American  cases,  361  n. 

not  favored,  362. 

upon  personalty,  not  allowed,  263  n. 
RETURN  of  execution  unsatisfied,  74,  86. 

See  Status  of  Attacking  Creditors. 

distinction  between  realty  and  personalty,  87. 

raising  the  objection,  88. 

chancery  rule,  75. 

of  officer,  conclusive,  74. 
REVERSION,  estates  in,  may  be  reached,  29. 
REVOCATION,  reserving  power  of,  358. 
RHODE  ISLAND,  practice  as  to  absconding  debtors,  84. 

as  to  change  of  possession,  250. 

as  to  spendthrift  trusts,  367a;. 
RIGHT,  to  sue,  transfer  of,  92. 

of  creditors,  existing  and  subsequent,  89,  97  n. 

of  creditors,  protection  of,  1. 

of  subrogation,  not  founded  on  contract,  195. 


820  References]        INDEX.         [are  to  sections . 

ROBINSON  v.   ELLIOTT,  rule  embraced  in,  348. 

discussed  in  later  case,  348. 

opposing  rule  and  cases,  352,  353. 
ROMANS,  laws  of,  concerning  insolvents,  1. 
ROYALTIES  on  books,  recoverable  by  creditors,  37. 
RULE  as  to  exempt  property,  46. 

fraudulent  purchases  of  exemptions,  47. 

covinous  alienations  of  exemptions,  48. 

conflicting  cases,  49. 

abandoned  exemptions,  50. 

of  construction  of  statute  of  Elizabeth,  20. 

same  at  law  and  in  equity,  29. 

of  procedure  in  federal  courts,  71,  407,  4070. 

judgment  in  personal  actions,  80. 

of  property,  in  federal  courts,  20. 

RUSSIA,  no  presumption  that  common  law  prevails  in,  64  n. 
SACRIFICE,  transfer  to  prevent,  325. 

to  prevent  surplus,  347. 
SALARY,  not  reached  in  supplementary  proceedings,  61  n. 

exempt  sixty  days  before  proceedings,  61  n. 

of  municipal  officer,  exempt,  61  n. 
SALE,  possession  with  power  of,  267. 

doctrine  of  Robinson  v.  Elliott,  348-351. 

relief  before  and  after,  58. 

judgment  avoids,  only  as  to  creditors,  171,  395-401. 

declarations  before  and  after,  277,  278. 
SALES  UPON  CREDIT,  effect  of,  240,  332,  333,  356. 

hinder  and  delay  creditors,  332,  333. 
SCHEDULES,  fraudulent  omissions  from,  320. 

not  evidence,  274. 

unintentional  omission,  320. 
SCHEMES  of  fraud,  future,  96. 
SEATS  in  stock  exchange  are  assets,  35. 

the  cases  discussed, 35. 

not  liable  to  execution,  35  n. 
SECRECY,  evidence  of,  234. 
is  badge  of  fraud,  234. 

and  concealment  to  be  considered  by  jury,  234. 
agreement  to  conceal  not  per  se  fraudulent,  234. 
Mr.  May's  views  as  to,  234  n. 
SECRET  PREFERENCE,  393. 


References^        INDEX.         [are  to  sections.  821 

SECRET  PREFERENCE  —  continued. 

when  avoided,  393,  394. 
SECRET  TRUST,  234a,  272. 

common  form  of  fraudulent  conveyance,  272. 

policy  of  the  law,  272. 

apparent  on  face  of  deed,  272. 

implied  from  extrinsic  circumstances,  272. 

as  regards  chattel  mortgage,  356a. 
SECURITY,  more  than  necessary,  effect,  241. 

permitting  conveyance  to  stand  as,  141. 

corrupted  with  fraud,  no  relief,  238. 
SELECTING  transfers  to  attack,  67. 
SEPARATE  estate  of  wife,  free  from  husband,  304. 
SEQUESTRATOR,  when  entitled  to  sue,  116.' 
SERVICES  by  member  of  family,  218. 

do  not  constitute  valuable  consideration,  218. 
SET  OFF,  illustration  of,  297^. 

assignee  takes  property  subject  to,  319a. 
SETTLEMENT,  payable  on  bankruptcy,  void,  364  ;/. 

release  of  dower  as  basis  of,  299. 

See  Marriage  Settlement. 
SEVERITY  of  Roman  law,   1. 
SHAM  contrivance  a  fraud,  15. 
SHERIFF,  money  in  hands  of,  reached,  t,^. 

promise  made  to,  available  to  creditor,  43  //. 

as  complainant,  81,  120. 

what  he  must  show  against  stranger,  297. 
SHIFTING  of  burden,  271. 
SHIP  at  sea,  possession  of,  256. 

SILENCE,  concealment  of  fraud  by,  not  enough,  148,  148  ;/. 
SIMPLE  CREDITORS,  cannot  sue  alienee  in  case,  62. 

rights  of,  73. 

not  entitled  to  injunction,  52. 

rights  of,  73. 

remedies  of,  73  n. 

no  bill  by,  in  federal  courts,  71. 

cannot  unite  with  judgment-creditors,  108. 
SISTER,  conveyance  by,  to  brother,  not  fraudulent,  5. 

preference  to,  dividend,  390. 
SITUS,  law  of,  governs  in  following  real  estate,  24. 
SLANDER,  claims  for,  cannot  be  reached,  34. 
SLAVE,  debtor  sold  as  under  early  law,  1,  1  ". 
SOLVENCY,  evidence  of,  95. 


822  References^        INDEX.         [are  to  sections. 

SOLVENCY  —  continued. 

the  cases  considered,  95. 
SON,  to  father,  sale  by,  242. 

father  may  work  for,  218. 

sale  to  by  debtor,  11. 

services  by,  218  ;/. 
SMALL  VALUE,  gifts  of,  not  avoided,  41. 
SOUTH  CAROLINA,  creditor's  bill  against  absconding  debtor,  84. 

trust  income,  367^. 

change  of  possession,  250. 
SPECIFIC  LIEN,  by  attachment,  81. 
SPECIFICATION,  of  ground  for  removal  of  receiver,  190. 

of  particulars  of  action,  162^. 
SPECULATION,  placing  property  beyond  risk  of,  100. 

such  conveyances  avoided  by  subsequent  creditors,  100. 
SPECULATIVE  INFERENCE,  not  evidence  of  fraud,  5. 
SPENDTHRIFT  TRUSTS,  360-368. 

policy  of  the  law  concerning,  360. 

protests  against,  360,  365. 

Nichols  v.  Eaton,  reviewed,  364,  365. 

spread  of  the  doctrine,  367a. 
(1.)   Aversion  to  exemptions  not  statutory,  360. 

purpose  of  the  law,  360. 

creditor's  property  a  trust  fund,  360. 

Williams  v.  Thorn,  360. 

wife's  interest  in  trust  income,  '45. 
(2.)  Restraints  upon  alienations,  361,  362. 

theory  of  the  law,  361. 

treated  as  void,  361. 

repugnant  conditions,  362. 

illustrations,  362. 
(3.)  Nichols  v.  Eaton  ;  the  point  actually  decided,  364. 

the  dictum,  365. 

comments  upon  it,  365. 

the  correct  rule,  366. 
(4.)  Broadway  National  Bank  x.  Adams,  367. 

review  of  the  case,  367. 

doctrine  dissented  from,  367. 

trend  of  the  cases,  3670. 
(5.)   Spendthrift  trusts  in  Pennsylvania,  368. 

birth-place  of  the  doctrine,  368. 

dissent  from  it  in  that  State,  368. 
STAND  by,  doctrine  of,  287. 
STATE,  may  attack  conveyance  to  defeat  fines,  123  //. 


References]        INDEX.         \_are  to  sections.  g21 

STATE  COURT,  proceeding  on  judgment  in  Federal  court,  78. 
STATUS  OF  ATTACKING  CREDITORS,  73-78,  106. 
(1.)  Rights  of  creditors  at  large,  52,  73. 

cannot  assail  assignments,  73. 

must  have  a  lien,  73. 

protecting  attachment  lien,  73. 

equity  not  a  remedy  to  collect  debts,  73. 

judgment  and  execution  essential,  73. 

remedy  at  law  must  be  pursued,  73. 

judgment  conclusive  as  to  indebtedness,  74. 

adjudication  of  debt,  74  n. 

rule  as  to  necessity  for  judgment  ancient,  75. 

creditor  must  have  lien,  75. 

existed  in  England,  75. 

recognized  in  chancery,  75. 

statute  of  limitations,  73. 
(2.)    Judgments  sufficient,  76. 

ordinary  money  judgment,  76. 

judgment  in  chancery  sufficient,  76. 

justice's  judgment,  when  docketed,  76. 

confession  of  judgment,  76. 

judgment  on  offer,  76. 

demand  classified  by  probate  court,  76. 

in  equitable  actions,  80. 
(3.)   Judgments  insufficient,  77. 

barred  by  statute,  77. 

judgment  not  personal,  77. 

justice's  judgment,  77. 

foreign  judgment,  78. 

must  bind  all  property,  77. 
(4.)   Creditors  of  a  decedent,  79. 

must  have  judgment  in  New  York,  79. 

statutory  change,  79. 

rule  otherwise  in  other  States,  79. 

reasons  of  the  rule,  79. 
(5.)  Specific  lien  by  attachment,  81. 

the  cases  reviewed,  81. 

New  York  cases,  81,  81  //. 

lien  by  attachment  insufficient,  81. 
(6.)    When  judgment  is  unnecessary,  83. 

no  remedy  at  law,  83. 

creditor  under  an  injunction,  S^. 

controversy  in  the  cases,  83. 

absconding  and  non-resident  debtors,  84. 


824  References^        INDEX.         \are  to  sections. 

STATUS    OF    ATTACKING    CREDITORS  —where  judgment  is 
unnecessary — continued. 

exceptional  practice  in  several  States,  85. 

cestui  que  trust,  need  not  have,  127^. 
(7.)  As  to  execution,  86,  87. 

return  of  execution  unsatisfied,  86. 

property  in  name  of  third  party,  82. 

distinction  between  realty  and  personalty,  87. 

raising  the  objection,  88,  88«. 
STATUTE,  13  Eliz.,  c.  5,  19. 

basis  of  all  legislation,  19. 

its  object,  11,  19. 

to  prevent  fraudulent  deeds,  19. 

universally  adopted,  19,  19  n. 

prevails  in  District  of  Columbia,  19  ;;. 

bottomed  on  immoral  intention,  9  n. 

its  interpretation  and  construction,  20. 

merely  declaratory  of  common  law,  16  n. 

27  Eliz.,  c.  4,  21. 

of  limitations,  begins  to  run  when,  292. 

of  limitations,  in  equity,  293. 

of  frauds,  311. 

controlling  in  Federal  courts,  71. 

2  Rich.  II,  18. 
its  purpose,  18. 

3  Hen.  VII,  c.  4,  18. 
50  Edw.  Ill,  c.  6,  18. 

foreign  statutes,  effect  of,  405  n. 
STATUTE  OF  FRAUDS,  debtor  not  bound  to  plead,  215. 

contract  to  convey  land  within,  293a. 

agreement  outside  of,  296. 
STATUTES  OF  ELIZABETH,  declaratory  of  common  law,  16. 
STATUTES  OF  LIMITATIONS,  292. 

rule  in  New  York,  73. 

in  equity,  293. 
STATUTORY  EXEMPTIONS,  46-50. 

aversion  to    exemptions  not  statutory,  360. 

covinous  alienations  of,  48. 

conflicting  cases,  49. 

abandoned,  50. 
STATUTORY  liability  of  stockholders,  139. 

STATUTORY    PROCEEDINGS,    changes    as    to    executors    and 
administrators,  112. 


References]        INDEX.-      [are  to  sections.  82  5 

STEARNS  v.   GAGE,  rule  in,  375. 
STOCK  EXCHANGES,  seats  in,  are  property,  35. 
may  be  reached  by  creditor,  35. 
seats  not  liable  to  execution,  35  n. 
character  of,  discussed,  35. 
STOCKHOLDERS,  as  defendants,  119,  139. 
when  creditors  may  sue,  119. 
statutory  liability  of,  rests  in  contract,  139. 
may  be  sued  in  foreign  court,  139. 
when  not  entitled  to  sue,  73. 
suit  when  receiver  is  defendant,  73. 
suit  by,  109. 
joining,  128. 
STOCKS  may  be  reached,  24. 

lis  pendens  does  not  apply,  157. 
STORY,  J.,  constructive  fraud  denned  by,  323. 
STUDIED  FORMALITY,  will  not  save  transaction,  241. 
SUBROGATION,  of  surety,  in. 

of  purchaser  to  creditor's  lien,  195. 
the  rule  in  New  York,  195. 
r       and  reimbursement,  192,  193,  195. 
of  subsequent  creditors,  103. 
not  founded  on  contract,  195. 
no  protection  of  fraudulent  party,  195. 

See  Reimbursement  and  Subrogation. 
SUBSEQUENT  ACTS,  to  prove  original  purpose,  227. 
SUBSEQUENT  CREDITORS,  96-106. 

See  Existing  Creditors. 
(1.)   Fraud  upon  subsequent  creditors,  96,  96  n,  97  n,  141. 
the  practical  distinction,  96. 
the  cases  considered,  96-106. 
intent  to  defraud,  96,  97,  202. 
question  for  the  jury,  96  n. 
rights  of,  considered,  97,  97  n. 
statute  of  Elizabeth  did  not  mention,  98. 
(2.)  Intent  as  affecting,  96,  202. 

must  be  directly  shown,  98. 
may  be  inferred,  98. 

no  difference  between  existing  and  subsequent,  98. 
alleging  fraud  on,  141. 
(3.)  Placing  property  beyond  risk  of  ventures  or  speculations,  100,  101. 
theory  of  the  law,  96,  97,  100,  101. 
rule  restated,  100  n. 


826  References]        INDEX.         [are  to  sections. 

SUBSEQUENT    CREDITORS  —placing   property    beyond    risk    of 
ventures  or  speculations.  —  continued. 

conveyances  avoided,  101. 

failure  to  record,  101. 

transfers  sutained,  102. 
(4.)  Mixed  claims,  104,  105. 

subsequent  creditors  sharing  with  antecedent  creditors,  104. 

accruing  prior  and  subsequent,  104. 

subrogation  of  subsequent  creditors,  103. 
(5.)    With  notice,  106. 

constructive  notice  not  sufficient,  106. 

cannot  generally  avoid  alienation,  106. 
SUBSEQUENT    PURCHASERS,    attacking    fraudulent    convey- 
ance, 21,  107. 
SUBSTANTIAL  FACTS,   to  prove  fraud,  5. 
SUBSTITUTED  PROPERTY,  rule  as  to,  28. 

goods,  lien  extended  to,  385. 
SUFFICIENT  CONSIDERATION,  222. 

not  sufficient,  223. 

judgment  to  sustain  bill,  76. 
SUING  on  behalf  of  others,  109.  y 

SUIT  IN  EQUITY,  51,  60. 

advantages  of,  60. 
SUPPLEMENTARY  PROCEEDINGS,  nature  of,  61,  61  n,  64. 

remedy  of,  61,  61  n. 

a  special  proceeding  in  New  York,  61,  116  n. 

substitute  for  creditors'  bills,  61,  61  n. 

commencement  of,  confers  lien,  61. 

lien  of,  how  defeated,  61. 

lien,  effect  of  death,  61  ;;. 

what  can  be  reached,  61,  64. 

not  exclusive,  61. 

judgment  to  sustain,  76. 

judgment  must  bind  all  property,  77. 

creditors  may  abandon,  61. 

claims  of  third  party,  61. 

must  be  based  on  judgment  in  personam,  61,  76. 

receiver  appointed  in,  63,  188. 

receiver  represents  creditors,  61. 

title  of  receiver,  116,  116  n. 

interests  reached  by,  61. 

may  be  brought  in  federal  courts,  61  n. 

when  not  in  State  courts,  61  n. 


References^        INDEX.        \are  to  sections.  X 1 J 

SUPPLEMENTARY  PROCEEDINGS  —  continued. 

salary  and  earnings,  61  n. 
SUPPORT,  of  debtor  in  early  times,  i  ;/. 

as  consideration  for  transfer,  211. 

attacking  transfer  to  defeat,  122. 

claim  of  wife  to,  299a. 
SUPPRESSION  or  concealment,  subsequent  fraud,  235. 

of  deed  or  mortgage,  235,  235  n. 

in  fraud  of  bankrupt  act,  237. 
SUPREME  COURT,  follows  State  rule,  71. 

rule  of  property  in,  20. 

appeals  to,  407,  407^. 

certificate  of  division,  407a. 

opinion  about  chattel  mortgages,  348,  353. 
SURETY,  as  creditor,  90,  in. 

on  guardian's  bond,  90  ;/. 

procedure  by,  111  n. 

assumption  by  as  consideration,  209. 

claim  against  misjoinder,  135. 

on  appeal  bond,  111. 

entitled  to  subrogation,  in. 

as  simple  creditor,  in. 
SURPLUS,  income  may  be  reached,  45,  360. 

theory  of  the  law,  45. 

creditor's  lien  on,  45. 

moneys  reached,  63. 
SURROGATE,   cannot  determine  as  to  fraudulent  transfer,  12  //. 
SUSPICION,  insufficient  to  establish  fraud,  5,  228. 

tangible  facts  must  be  shown,  283. 

evidence  must  convince  the  understanding,  283. 
SWORN  ANSWER,  taken  as  true  when,  160. 
SYMPATHY,  with  fraudulent  debtors,  5. 

TALENTS  of  debtor,  creditor  cannot  command,  500. 
TANGIBLE  FACTS,  to  establish  fraud,  5. 

suspicions  insufficient,  5,  6,  283. 
TANGIBLE  PROPERTY  may  be  reached,  23. 
TEMPORARY  resumption  of  possession,  258. 

when  does  not  render  sale  fraudulent,  258. 

opposing  illustration,  258. 

improvements,  26. 
TEMPTATION  of  debtors  to  commit  fraud,  2. 
TENANT  IN  FEE,   condition  not  to  alien,  void,  362. 


82o  References],        INDEX.         \  are  to  sections. 

TENNESSEE,  spendthrift  trusts,  367^. 
TERRITORIAL  jurisdiction,  change  of  venue,  157a. 
TESTIFYING  as  to  intent,  205. 

as  to  value,  284. 

See  Evidence. 
TESTIMONY  must  conform  to  pleading,  285. 

to  overcome  answer,  160. 

as  to  intent,  205. 

as  to  matters  not  in  issue,  excluded,  285. 
TESTS,  of  fraudulent  conveyances,  15,  15a. 
TEXAS,  joinder  of  claims,  85. 

change  of  possession,  250. 
THIRD  PARTY,  reaching  property  purchased  in  name  of,  57,  82. 

is  it  liable  to  execution,  57. 

may  be  attached,  57. 

consideration  paid  by  debtor  for,  57,  57  n. 

enforcing  promises  of,  43. 

doctrine  of  Lawrence  v.  Fox,  43. 

conflict  in  the  cases,  43. 

promise  to  sheriff  available  to  creditor,  43  n. 

claiming  property  in  supplementary  proceedings,  61. 
THREATENING  to  make  assignment,  342. 

not  considered  a  ground  of  attachment,  342. 

conflict  in  the  cases,  342. 

the  safer  rule,  342. 
TITLE,  on  death  of  receiver,  189. 

possession  as  evidence  of,  245. 

from  fraudulent  vendee,  386. 

of  personal  representatives,  112  ,113. 

of  assignee  in  bankruptcy,  114. 

of  general  assignee,  115. 

of  receiver,  116,  116  //. 

of  receiver  of  corporation,  117,  117  n. 

judgment  transferring,  172. 

equity  cannot  create,  60  n. 
TORT  CLAIMS,  cannot  be  reached,  34. 

creditor,  123. 

not  transferred  by  assignment,  3160. 
TORT,  to  property,  is  assignable,  34. 

claimant  is  a  creditor,  90,  123. 

creditor  as  complainant,  123. 

illustrations  of  rights  of,  123. 


References]        INDEX.         [are  to  sections.  g2Q 

TRACING,  THE  FUND,  44. 

misapplied  money,  44,  44  n. 

following  insurance  money,  44. 

goods  in  hands  of  sheriff,  44. 

may  be  followed  into  any  property,  44. 
TRADE-MARKS,  are  assets,  36. 

pass  to  assignee  as  property,  36. 

under  bankrupt  law,  36. 

personal,  rule  as  to,  36. 
TRANSACTIONS,  palpably  fraudulent,  10. 

presumed  to  be  honest,  5. 

motives  of,  7. 

fraud  must  be  inception  of,  227. 

with  deceased,  testimony  concerning,  121. 

between  husband  and  wife,  300. 

proof  of,  in  separate  instrument,  6. 
TRANSFER  pending  suit,  effect  of,  22,  233. 

is  mark  of  fraud,  233. 

of  right  to  sue,  92. 

to  prevent  sacrifice,  325. 

of  property  by  assignment,  316a. 
TRANSFERS  inuring  as  assignments,  339. 

presumptively  fraudulent,  248. 
TRESPASS,  judgment-creditor  in,  as  complainant,  123. 
TRIAL,  framing  issues  for,  51,  51  /;. 

TRICK  AND  CONTRIVANCE  to  defraud  creditors,  15. 
TRIVIAL  VALUE,  property  which  is  of,  23,  41. 

not  fraudulent  to  assign,  23. 
TRUST,  for  debtor's  benefit  avoids  conveyance,  10. 

spendthrift,  360-368. 

See  Spendthrift  Trusts. 

for  indefinite  period,  fraudulent,  11. 

decree  declaring  binds  creditors,  45  n. 

fraud  apparelled  and  clad  with,  22. 

enforcement  of,  without  judgment,  84. 

property  in  name  of  third  party,  57,  57  n. 

essential  to  create  assignment,  316,  316  n. 

matter  of  equity  jurisdiction,  56. 
TRUST  FUND,  creditor's  property  considered  as,  360. 

capital  of  corporation  is,  117. 
TRUST  INCOME  available  to  creditors,  45,  360. 

above,  what  is  needed  for  support,  45. 

Williams  v.  Thorn  considered,  45. 


8^0  References]        INDEX.         \are  to  sections. 

TRUST   INCOME  —  continued. 

interest  of  wife  in,  45. 
TRUST   PROPERTY,  does  not  pass  by  assignment,  316^. 
TRUSTEE,  and  cestui  que  trust  as  defendants,  137. 

when  may  sell  on  credit,  ^^  "■ 

fraudulent  grantee  as,  385. 

ex  maleficio,  300. 
TURPITUDE,  need  not  be  shown,  8. 

tendency  of  the  cases,  8. 
TWELVE  TABLES,  law  as  to  insolvents,  1  n. 
TWYNE'S  CASE,  stated  and  discussed,  22. 

decided  in  1601,  22. 

its  great  importance,  22. 

restated  in  Supreme  Court,  22  //.  j^ 

1 
badges  of  fraud  in,  22,  231. 

rule  as  to  change  of  possession  in,  245. 

its  limited  scope,  22. 

growth  of  the  law  since,  22. 

effect  of  secrecy  as  shown  by,  22. 

generality  of  gift,  22. 

construed,  use  by  vendor,  22. 

expression  of  honesty  in  deed,  22. 

rule  in  New  York,  93. 

in  England,  93. 

UNCERTAINTY  IN  PLEADING,  reached  by  motion,  140  n, 
UNDISCLOSED  INTENT,  evidence  of  inadmissible,  205  ;/. 
UNDUE  INFLUENCE,  13  ;/. 

not  defined  by  the  courts,  13  ;/. 
UNFINISHED  WORK,  finishing  up  by  assignee,  330,  331,  331  ;/. 
UNILATERAL  evil  intent  will  not  overturn  transaction,  207. 
UNITED  STATES  courts,  practice  in,  71. 

judgment  in,  78,  78  n. 

local  rule  governs  in,  20. 

not  interfere  with  State  receiver,  117. 
UNITED  STATES  SUPREME  COURT,  appeal  to,  407. 

certificate  of  division,  407^. 
UNITING  causes  of  action,  55. 

joinder  of  claims,  54. 

various  illustrations,  55. 

ejectment  and  equitable  relief,  55. 

complainants,  107. 

defendants,  132. 


References^        INDEX.        [are  to  sections.  %"1\ 

UNNECESSARY,  judgment  when,  83. 

UNPAID  SUBSCRIPTIONS,  joinder  of  stockholders,  128. 

trust  fund,  117. 
UNREASONABLE  inadequacy  of  price,  209. 

evidence  of  secret  trust,  209. 
UNRECORDED  DEED  or  mortgage,  235,  235  n. 

concealment  in  fraud  of  bankrupt  act,  237. 
UNREPRESENTED  PARTIES,  no  judgment  in  favor  of,  173. 
UNSATISFIED  EXECUTION,  return  of,  86,  86  //. 

distinction  between  realty  and  personalty,  87. 

when  excused,  75. 
UNUSUAL  ACTS  and  transactions,  241. 

constitute  badges  of  fraud,  241. 

various  illustrations,  241. 
USURY,  claims  not  joined,  132  n. 

debt,  providing  for,  286. 

VALID  or  void  at  law,  51. 

different  rule  in  equity,  51. 

title  from  fraudulent  vendee,  386. 

between  the  parties,  fraudulent  conveyances,  395-400. 
VALUABLE  CONSIDERATION,  207-223. 
See  Consideration. 

what  is,  209. 

what  may  consist  of,  209. 
VALUE,  as  affecting  fraudulent  transfer,  23. 
See  Consideration. 

property  heavily  encumbered,  23. 

an  important  element,  23. 

consideration  anything  of,  207. 

former  rule  in  New  York,  23  //. 

change  of  rule  as  to,  23  //. 

Pennsylvania  cases,  as  to,  23  n. 

gifts  of  small  value  not  fraudulent,  41. 

proving  it  by  experts,  284. 

recovering  judgment  for,  177,  178,  178  n. 

judgment  cannot  exceed,  3  n,  177,  178. 
VARIANCE,  rule  as  to,  155. 

testimony  must  conform,  285. 

judgment  must  be  for  relief  demanded,  181. 

must  accord  with  complaint,  182. 
VENDOR,  recision  for  fraud,  53. 

relief  to,  399. 


832  References^        INDEX.         \ are  to  sections. 

VENDOR  —  continued. 

evidence  of  insolvency  of,  273. 

possession,  245-267. 

change  sufficient,  255-258. 

resumption,  258. 
VENDEE,  insolvency  of,  274. 

fraudulent,  may  create  valid  lien,  195. 

judgment  against,  192,  177,  180. 

evidence  of,  274. 

title  from  fraudulent,  386. 

allowance  to  fraudulent,  176. 

extent  of  protection  to,  207. 

change  of  possession,  253. 

marking  with  vendee's  name,  253. 

declarations  in  presence  of,  278. 

proof  of  ability  to  pay,  219. 

power  to  confer  preferences,  241. 

testifying  as  to  intent,  279^. 
VENTURES,  placing  property  beyond  new,  100. 
VENUE,  change  of,  157a. 

land  in  foreign  country,  157^. 
VERDICTS,  contradictory,  183. 

when  set  aside,  204. 

when  given  under  misapprehension,  304. 
VERIFICATION  of  pleading,  155,  167. 

waiver  of,  167. 

defendant  may  verify,  167. 
VERMONT,  spendthrift  trusts  in,  367*7. 

change  of  possession,  249. 
VESSEL  AT  SEA,  delivery  of,  262. 

VICTORIA,  statute  of  as  to  voluntary  conveyances,  93. 
VIGILANT  CREDITORS,  entitled  to  preference,  392. 

no  preference  in  estate  of  decedent,  392. 
VIRGINIA,  creditor's  bill  against  absconding  debtor,  84. 

trust  income,  367a. 

as  to  change  of  possession,  250. 
VOID,  assignment,  purchase  under,  322^. 

word  construed,  317. 
VOID    AND    VOIDABLE    ACT,    as    to    fraudulent    conveyances, 

73,  317- 
Chief  Justice  Shaw's  view,  317. 
VOIDABLE  ACTS,    "  void  "   means   "voidable,"   in  act  of  Eliza- 
beth, 31.7. 


References^        INDEX.        [are  to  sections.  833 

VOID  CONDITIONS,  361. 
VOID  IN  PART,  void  in  toto,  194. 

when  valid  provisions  upheld,  194. 

illustrations  of  the  rule,  194. 

the  word  construed,  317. 
VOLUNTARY  CONVEYANCES,  as  to  existing  creditors,  92. 

to  relatives,  242. 

confusion  in  the  cases,  93. 

rule  in  New  York,  93,  208. 

in  California,  208. 

statute  56  and  57  Victoria,  93. 

assignment  for  benefit  of  creditors,  316. 

only  presumptively  fraudulent,  94,  208. 

intent  as  affecting,  200,  208,  319. 

the  cases  as  to  intent  affecting,  200. 

need  not  be  mutual,  200. 

assignments,  316. 

See  Fraudulent  General  Assignments. 

defined,  208. 

what  is  consideration,  209. 

by  corporation,  119. 
VOLUNTEER,  from  fraudulent  grantee,  201. 

WAGES,  preference  in  New  York,  392^. 
WAIVER  of  verification,  167. 

amendment  of  41st  rule,  167  n. 

defendant  may  verify  answer,  167. 

of  defect  of  parties,  133. 
WARRANTOR  as  creditor,  89. 
WEST  VIRGINIA,  general  creditor  may  sue,  73  n. 

as  to  change  of  possession,  250. 
WHAT  CANNOT  BE  REACHED,  50a. 
WHITE  v.   COTZHAUSEN,  and  conflicting  cases,  339*7. 
WHOLE   ESTATE,  conveyance  of,  231. 
WIDOW,  as  complainant,  121. 

dower  of,  30,  33,  61,  70,  299. 

when  cannot  sue  in  chancery,  121. 

when  not  entitled  to  annul  transfer,  121. 
WIFE,  assignment  of  policy  by,  23,  298-315. 
See  Husband  and  Wife. 

right  to  life  insurance,  23,  23  n. 

crops  on  land  of,  27. 

fraud  upon,  form  of  procedure,  70. 
53 


834  References^        INDEX.        [are  to  sections. 

WIFE  —  continued. 

as  creditor,  90,  122. 

when  claim  should  be  rejected,  300  ?i. 

services  by,  to  husband,  218. 

husband  may  act  as  agent  for,  303. 

husband  need  not  work  for  in  separate  business,  218. 

proof  of  fraud  against,  212. 

advances  by,  defense,  222. 

separate  property  of,  304. 

transfers  affecting  dower,  315. 

money  judgment  against,  180. 

judgment  where  husband's  interest  is  reached,  192. 

interest  in  trust  income,  45. 

enforcing  alimony,  45. 

status  of,  against  husband,  45. 

surplus  income  of,  45  n. 

when  injunction  not  granted  to,  52. 

wife  as  creditor,  no  n. 

knowledge  imputed  to,  198  n 

claim  to  support,  299^. 
WILL,  no  right  of  creditors  to  oppose,  127. 
WILLIAMS  v.   THORN,  its  doctrine  approved,  46,  360. 
WISCONSIN,  right  of  personal  representatives,  112. 

insufficiency  of  estate,  how  determined,  112. 

change  of  possession,  250. 

trust  income,  367*7. 
WITNESS,  competency  of  party  as,  269. 

competency  of  wife  as,  313. 

party  as,  281. 

cross-examination  of,  281. 

to  overcome  answer,  159. 
WORD  "  disposed  "  construed,  12. 

"  fraud,"  use  of  in  pleading,  141. 
WORDS  "  hinder,  delay,  or  defraud,"  11. 

discussed,  11. 

intent  to  do  either  sufficient,  n. 

not  synonymous,  11. 
WRITTEN  INSTRUMENT,   difficulty  of  proving  fraudulent,  6. 
WRONG,  suspicion  of,  not  sufficient  to  maintain  suit,  5. 
WRONGFUL  EFFECT,   must  accompany  wrongful  purpose,  107. 


Whole  Number  of  Pages,  904. 


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